Pediatric mental health startup Brightline is restructuring its business, shrinking its geographic footprint and laying off a portion of its employees.
The company confirmed the layoffs in an email but declined to disclose how many people or what percentage of its employees were affected. Co-founder and CEO Naomi Allen wrote in a blog post the company is pivoting from a virtual-only care model to a hybrid approach with plans to open in-person clinics.
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As part of this move, Brightline is narrowing its focus from 50 states to five states and scaling back its commercial employer and health plan business, according to two people familiar with the transition. The layoffs include clinicians and clinical managers within the states the company is leaving, as well as administrative staff focused on its commercial business.
The transition will begin in January, Allen said in the blog. She said the company will offer financial incentives to keep clinicians on until the end of the year to ensure continuity of care for patients.
Brightline has raised more than $200 million in funding since its founding in October 2019. Investors include private equity firm KKR and venture capital firms Oak HC/FT, GV (formerly Google Ventures) and Optum Ventures, the venture arm of UnitedHealth Group’s Optum subsidiary. The company is not yet profitable, according to an internal source.
The company will still offer its services through health plans and employers in the remaining states, but Allen said in the blog post it is having a hard time reaching people through these channels. She said Brightline will go further and offer higher-acuity care by opening in-person clinics and partnering with schools, public health organizations and healthcare providers in those states.
Brightline’s challenges mirror other companies selling to employers. In August, industry organization the Business Group on Health surveyed its large employer members and found only 26% were pursuing virtual-first solutions, a decrease from 37% of employers in 2023.
The company’s agreement with the California Department of Health Care Services, which it signed in October 2023, is not affected by this transition. Brightline will continue to offer fully virtual services for those patients, the company said.
