TLDR:
- Venture capital investors are starting to show interest in brick-and-mortar behavioral health investments.
- Hybrid business models that include both telehealth and in-person elements are gaining popularity among venture capitalists.
Private equity has traditionally dominated in-person behavioral health investment, but some venture capital investors are now exploring opportunities in brick-and-mortar models. Venture capitalists, who initially focused on backing digital providers, are now moving into hybrid business models that combine telehealth and in-person services.
BBG Ventures, for example, has invested in Millie, a maternity, gynecology, and wellness provider with a clinic-based model complemented by digital tools and virtual visits. This shift towards hybrid models indicates a changing landscape in behavioral health investment, with some investors seeing potential in combining in-person care with technology.
While some venture capitalists believe that brick-and-mortar investment may require higher working capital, others like Claire Biernacki from BBG Ventures see the potential for growth and impact in certain dynamic business segments. However, not all venture capitalists are convinced, with investors like Marissa Moore from OMERS Ventures citing concerns about the intensive up-front capital investment required for brick-and-mortar businesses.
Despite these differences in opinion, there is a growing recognition that hybrid models may be the future of venture capital involvement in behavioral health. These models can provide better care for patients by combining in-person services with virtual platforms. Innovative value-based business models that meet patients “where they are at” may offer attractive opportunities for venture capital investment in the behavioral health space.
