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At just over halfway in the year, it’s already been a dramatic year for the mental health services industry.

We’ve seen it all: bankruptcies, major deals–even a creditor taking over a major player in the sector. Overall, investors remain keen on the space, with 40 deals in the first half of the year, according to the Braff Group.

Even within that turbulence, some clear trends are emerging. For starters, investors and providers are increasingly interested in interventional psychiatry. Industry insiders are also continuing to place bets on the outpatient space, with traditional brick-and-mortar providers looking to expand their resources into that sector.

Every year, we take a look at some of the providers catching the industry’s attention — either because they’re indicative of where the industry is moving, are facing a fork in the road, or are undergoing internal transformation.

Read on for our list of five mental health providers to watch this year.

Discovery Behavioral Health after creditor takeover  

Discovery Behavioral Health has been one of the heavy hitters in the mental health treatment sector for more than three decades. In 2011, the company was acquired by private equity firm Webster Equity Partners and has grown steadily over the last decade.

So when news broke that its creditors, HPS Investment Partners and Capital One, had seized control of the provider at the end of 2025 — following a shift in debt-to-earnings ratio accounting — the industry was stunned. The seizure came after the provider defaulted on $280 million in debt.

Then in June 2026, HPS Investment Partners announced it would take on majority ownership and leadership of the company. At the time, the company named a new board of directors and CEO: Pete Clarke, a veteran of dialysis provider DaVita Inc. (NYSE: DVA), took the reins.

The business structure changes kicked off a game of musical chairs at the top. Longtime CEO John Peloquin stepped down in 2025, and behavioral health veteran Tom Britton took over the role for just a few months before the company’s creditors seized control.

These developments have brought new scrutiny to the practice of over-leveraging a company. Private equity investors are often focused on growing an asset — but there’s real danger in taking on more debt in pursuit of growth than a company can feasibly handle.

I’m watching Discovery to see what comes next for a company that was taken over by a lender. I think the company will face an existential question about its growth strategy and its place in the market. I’m also curious if this story has made investors’ cool on the behavioral health sector, or whether they are looking at this story as a one off.

Salma Health, a pioneer in interventional psychiatry

Investors and providers are beginning to turn their attention to interventional psychiatry, a subspecialty within behavioral that uses neuromodulation and fast-acting medication to treat mental illness. This includes transcranial magnetic stimulation (TMS), ketamine infusions, esketamine nasal spray and other interventions.

While many traditional providers, such as Family Care Centers and LifeStance, have begun adopting more interventional psychiatry techniques like TMS, we’re also seeing some providers build interventional psychiatry into their core from the outset.

One company we’re watching with this premise is Salma Health. In March, the San Mateo, California-based startup emerged with $80 million in a Series A funding round. The provider calls itself a brain health company and integrates coordinated care and interventions with diagnostics.

The hybrid provider offers TMS, neuromodulation for treatment-resistant depression, psychotherapy, clinical counseling and medication management. Salma has also created a proprietary AI platform that brings together clinical insights, data and neurobiological information to help monitor a patient’s journey.

The provider launched with four California locations, and it is looking to expand its footprint across the country.

While behavioral health has often been criticized for having few new treatments and modalities, Salma is offering a suite of interventional psychiatry options paired with AI-driven insights — two modalities at the frontier of the field.

In some ways, Salma’s performance will be an indicator of where the industry is headed. Still, Salma isn’t the only provider working on this type of care. In December, Raidal, an interventional psychiatry practice, landed $50 million in a Series A round led by General Catalyst. Both of these providers raised substantial Series A rounds, with investors placing bets that this is the future of behavioral health.

Talkspace deal could give UHS a virtual edge  

Universal Health Services (NYSE: UHS) is the biggest name on this list and is generally seen as a traditional provider with a full continuum of care. That said, many still associate it primarily with inpatient and residential care, as it’s one of the few major players in that sector.

And while the company has made some inroads expanding its scope of care, there is still a lot of blue sky for the provider when it comes to outpatient care, but it is looking to change that.

At the beginning of the year, it announced its plans to acquire virtual provider Talkspace (Nasdaq: TALK) for a whopping $835 million. Talkspace brings to the table several assets that UHS simply doesn’t have. For starters, the tech-first provider has a large pool of clients receiving care exclusively through telehealth; it also has a purpose-built mental health Large Language Model (LLM) that is trained on real clinical data.

The companies pitch the deal as a way to better enable a continuum of care for patients.

“There is a significant opportunity for us to introduce Talkspace’s team of 6,000 clinicians into our environment to develop higher acuity virtual offerings, such as virtual intensive outpatient programs (IOPs),” Marc Miller, CEO of UHS, said on the company’s Q1 earnings call. “This will improve our ability to manage more patients stepping down from UHS facilities with a preferred virtual option.”

This deal, which is set to close this quarter, will create a new type of provider that mixes traditional care and digital-first care. I will be curious to see how UHS integrates Talkspace into the mix and what it means for the company.

NOCD expands into specialty care with Noto

NOCD was founded more than a decade ago with a narrow focus: treating obsessive-compulsive disorder (OCD). The Chicago-based company has raised more than $84 million in venture funding from some of the biggest firms in the sector, including Cigna Ventures, 7wireVentures and Kaiser Permanente Ventures.

It has also announced large partnerships. For example, it inked a deal with Cigna Corp. (NYSE: CI) to provide virtual services to members.

Still, OCD is a pretty niche part of behavioral health, which makes it difficult to really shake up the industry. However, the company is now looking to lean into its niche and expand by creating a new parent company called Noto that will operate as a specialty behavioral health provider that offers services for complex psychiatric and mental health conditions.

At the beginning of the year the company announced that it acquired trauma care provider Rebound Health.

“We envision a future where multiple specialties—each focused on a complex, underserved condition—are powered by Noto,” Stephen Smith, founder of NOCD and CEO of Noto, told Behavioral Health Business at the time of the acquisition. “Each specialty would leverage shared operational infrastructure for payer partnerships, enrollment, and treatment operations, while maintaining deep clinical focus and evidence-based care.”

This is an interesting company to watch, both for its success in a niche market and for how it plans to expand. Behavioral health has many subspecialties that remain ripe for more targeted services, and this company has already made a name for itself in OCD treatment. I could see it applying that same playbook to move into trauma care and beyond.

Hazel Health experiences turmoil

 Pediatric behavioral health provider Hazel Health has had a lot of changes over the past year. The provider offers school-based virtual care and partners with K-12 school districts.  

Last year, it acquired two new companies BeMe Health and Little Otter, with growth on the agenda.  
But M&A was not the only major change for the company. There have been several leadership changes in the last twelve months. Following the acquisitions, the provider named former Cityblock Health CEO Iyah Romm its next CEO. However, Romm resigned just eight months later, with the company naming Alexandrea Fair, former Iris Telehealth COO,  to the post.  

The company has also experienced some workforce turbulence, announcing two rounds of layoffs within the last year, the first in October, impacting 11% of its workforce, and the second in February, which cut 135 positions.  

Additionally, Axios reported that the company failed to transact after completing a sales process.

Still, it’s important to note that Hazel Health does have some major partnerships under its belt that could help it through this time of turbulence. For example, in 2024, it inked a partnership with UnitedHealthcare (NYSE: UNH) covering as many as 1 million students.  

There is a clear demand for services in the pediatric space, and in schools in particular. However, the company’s shaky last year seems to be showing some signs of turmoil, though a few more major deals could set it on the right course.