The playbook for VC-backed care delivery businesses in 2026

Keaton Bedell is the Co-Founder and CEO of Bridge, a health insurance infrastructure platform. Rebecca Mitchell, MD, is the Managing Partner and Co-Founder of early-stage venture firm Scrub Capital.

The virtual care junkyard is full of companies that built great care models, but never found a sustainable business model. It’s still such a new category that entrepreneurs are writing the playbooks in real time.

There’s lots of flavors of direct-to-consumer healthcare. One potential playbook we’re seeing these days involves leveraging insurance, versus cash pay. Instead of trying to influence behavior as tech or service vendors, these companies are stepping into the role of care delivery itself. They borrow the acquisition playbooks from cash-pay leaders like Hims & Hers, Ro, and Hone Health, but layer in insurance to expand access and (in some cases) affordability.

At Bridge, we’ve seen hundreds of companies pursuing this model and now power dozens of them. At Scrub Capital and Second Opinion, Chrissy and Rebecca have spent time with many of the category’s defining founders, including Jake Cooper, CEO of Grow Therapy, which recently reached a $3B valuation, and $1B women’s health unicorn Midi Health. 

This model first took shape with companies like Grow Therapy, Headway, and Talkiatry, who benefited from the surge during the pandemic. Dietician-focused platforms like Nourish and Berry Street followed soon after. As barriers to entry have continued to fall, we’re now seeing a Cambrian explosion of companies across specialties: Midi Health (menopause), Found (obesity), Allara (PCOS), Neura Health (neurology), Birches (gambling addiction), Eddii Health (endocrinology), and many more.

In this piece, we break down the four stages of this model to give builders a practical playbook. Not every company will follow this exact path, but many will benefit from thinking in phases like this.

We are calling it:

*because this is also the era of AI 

Most digital health companies that struggle don’t fail because of bad technology or bad clinical operations. They fail because they never figured out if anyone would actually pay for what they built — or they figured it out too late.

Here's the framework we use when thinking about how care delivery companies get built — and where they tend to get stuck.

Before anything else, it’s valid to test willingness to pay out-of-pocket. Not because cash-pay must be the long-term business model, but because it's the fastest and most honest signal you can get.

Insurance won't save a product that no one will pay for directly. If you can't find a cohort of patients willing to pull out a credit card, you might not have market pull for the product yet, which justifies the next three steps. The cash phase is where you test the hypothesis without the noise. 

The TAM here is tiny—that 1% willing to pay cash. But that's exactly the point. You're not trying to scale yet. You're trying to learn.

This stage is also where most founders spend too little time. Experimentation here on both the messaging and the product can be fast and cheap. It’s what experienced operators mean when they say “slow is smooth, smooth is fast.” The temptation is to skip straight to contracting with insurance companies. But skipping Stage 1 is how you end up with a credentialing nightmare and no demand on the other end.

The exception: There are certain conditions that are suited to insurance from day one, or where there’s simply an inability for that subset of patients to pay. One example might be substance use disorder patients who are primarily being served via Medicaid. In these scenarios, Medicaid reimbursement can be the fastest option, though it comes with more regulatory overhead. There’s also companies that are so successful in cash pay that they remain at this stage.

Once a company has validated demand with cash-pay patients, the job is to reach 80% of commercial coverage nationwide. That's the threshold where the unit economics shift meaningfully. Getting insurance coverage is more than just health plan contracts and going live with them. Credentialing and enrollment are the next steps, plus real-time eligibility and revenue cycle management (RCM). As demonstrated by Second Opinion’s recent market map, there are lots of vendors in each of these categories that sell to virtual care companies (Assured, Sohar, Candid, and others).