This is an exclusive BHB+ story
The classic saying “cast a wide net” may be true with fishing, but some behavioral health providers are finding a narrower approach pays dividends.
Providers are finding more ways to stand out in an increasingly competitive industry. Targeting a niche population may be one way to do so – though it may not always be an advantage.
“If we’re talking about trying to book new business, and you’re a company that is doing general behavioral health support, if you are approaching firms that have already figured that out, then being more specialized is going to be to your advantage,” Laura Gomez Cadena, senior venture capital analyst for Healthworx, told Behavioral Health Business.
Baltimore, Maryland-based Healthworx is the innovation and investment arm of CareFirst BlueCross BlueShield. Its portfolio includes autism therapy provider Positive Development and behavioral health provider evolvedMD.
Providers looking to zero in on one specific sector of behavioral health typically do so in one of two ways, Cadena said.
One tactic involves focusing on a specific condition, for example, serious mental illnesses (SMI) or eating disorders. Another strategy is focusing on a particular demographic, such as, age range.
Pediatric-focused behavioral health companies began increasingly cropping up in the wake of the COVID-19 pandemic, Cadena said.
A more specialized focus can lead to more personalized care, Natalie Schneider, CEO of pediatric-focused behavioral health provider Fort Health, told BHB.
“There’s a realization that a one size fits all across ages, geographies, genders, etc, is probably going to meet everyone’s needs sub-optimally,” Schneider said. “I love seeing these specialty new entrants surface that are really zeroing in on the particular needs of a particular population.”
New York City-based Fort Health provides virtual therapy, psychiatry and parent coaching as part of a collaborative care model that includes patients’ pediatricians. The provider has raised a total of $16 million, including a $5.5 million round closed in November 2024.
Adult-focused behavioral health providers cannot simply lower the age range on their websites and be equipped to treat children, Schneider said. Specialty training and technology are necessary when treating kids, so providers looking to branch into a younger demographic must restructure their business.
Offering behavioral health care integrated with a child’s pediatrician is playing “where the puck is going,” Schneider said, as pediatricians increasingly view behavioral health needs as part of their job.
Schneider is not the only health care executive who has identified this demand.
The pediatric behavioral health industry is also becoming increasingly competitive. Providers across sectors often seep into other conditions or demographics, and Schneider has witnessed more adult-focused providers move into pediatric care, and vice versa.
Age-specific care isn’t only targeted towards pediatric patients. Senior-focused behavioral health provider Vitalic launched in December with $4 million in seed funding.
And some providers want to stay purely in the adult space. Virtual health care provider Access TeleCare is an example of a company that is not interested in expanding into treating other demographics.
“We’re staying within our lane so we can be successful and assure that we’re going to achieve what we want to achieve,” Dr. Chris Gallagher, CEO of Access TeleCare, told BHB.
Access TeleCare’s “lane” is treating adult patients across eight different specialties, including behavioral health. The Dallas, Texas-based provider works with hospitals, outpatient clinics and physician practices.
Playing to the company’s strengths will prevent it from becoming overstretched, Gallagher said, and makes it a better partner for health systems. While focusing only on adults, providing care for multiple different health specialties still allows Access TeleCare to take a holistic approach to health, Gallagher said.
Population-specific behavioral health companies have seen investor or buyer interest over the past few months.
Several companies are caring specifically for women and their behavioral health needs. For example, Caraway Health, which narrows in specifically on Gen Z women, sold to pediatric behavioral health startup Summer Health earlier this month.
We’ve also seen some women’s behavioral health startups focus on guiding patients through the pregnancy and parenthood journey. Mental health conditions are the leading cause of maternal mortality in the U.S. Several maternal mental health companies have caught investor attention over the last few years. For example, Mavida Health, which specializes in maternal and paternal mental health care, raised $1.5 million in seed funding and Seven Starling has raised $12.6 million.
“Technology innovation in maternal care and parenting has long been overlooked and underfunded, but that’s starting to change,” Julie Wroblewski, co-founder and managing partner of Magnify Ventures, said in a statement after Seven Starling closed its seed funding round. “Seven Starling is a leader in a growing field of innovation that will address long-standing, costly pain points in the pregnancy, childbirth, and parenting journey that have been exacerbated and highlighted by the pandemic.”
Women are the only population disproportionately impacted by behavioral health conditions. For example, more than half of LGBTQ+ individuals have experienced depression and three in five experienced anxiety in the past year, according to the Stonewall Center.
As a result, several startups have begun to address this need. For example, LGBTQ+ health startup Folx added mental and behavioral health services in 2022, following a $30 million Series B funding round.
“Within the LGBTQIA+ community, factors like discrimination and stigma can exacerbate depression, highlighting the need for compassionate, specialized care,” Folx wrote in a blog post in May. “At FOLX, our clinicians are specifically trained to address the unique factors that impact each person’s mental health experience, providing empathetic support and personalized treatments that respect each individual’s experiences.”
Additionally, New York City-based virtual mental health platform Somethings secured $3.2 million for its platform focused on LGBTQ+ youth.
Specialized care not the only path forward
Still, more general approaches to behavioral health are essential to improve access. Casting a wide net can help people who would otherwise not get care into treatment, according to Cadena.
More general behavioral health companies have also raked in major funding dollars. Slingshot AI, for example, raised $40 million in January. The company operates with a “What if everyone could get help?” approach, but uses AI to tailor its treatment pathways to individual patients.
Time will tell if specialization pays off.
“For the next five or 10 years, given that we’ve seen some of these companies on both sides receive funding for the past few years, what we’re going to see mostly in the market is a reaction from these organizations to assess if the products that they bought have worked or have not,” Cadena said. “It would be a reflection period, of looking back to the data of the past three to five years, and we’re going to make a decision on what has worked, what has not, and then perhaps how we have to pivot.”
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