A big thanks to everyone who has, and is continuing to, support us on this journey to help builders in health tech make sense of all the change happening in the industry. We are immensely grateful for the support!
Pear Therapeutics announces it is being SPACed at a $1.6 billion valuation, the latest in a long line of SPACs that makes me scratch my head a bit. Pear is of course at the forefront of the prescription digital therapeutics (PDT) space, with three FDA-approved products. But despite its leading position in the prescription digital therapeutic space, Pear appears to have hit some challenges with commercialization. Pear is projecting to hit only $4 million of revenue in 2021. If you assume that Pear has an ASP of $900, that means they'll sell their apps to ~4,500 people in 2021. The core thesis here seems to be that as the leader in the PDT market, Pear will take advantage of future growth in PDTs, with over 100 commercialization opportunities on its platform. But, it does seem that there are a number of questions that need to be answered as to the utility of PDTs. This recent Substack post calls out the question very well: are PDTs actually better for patients versus other apps - justifying the massive price point - or merely a way to extract value from the healthcare market by creating a moat leveraging the FDA as a stamp-of-approval? Link (Press Release). Link (Investor Presentation).
If you want a much deeper dive on Pear / the Prescription Digital Therapeutics space, check out Brian Dolan's coverage of this deal at Exits and Outcomes, it is worth checking out for the in in-depth coverage of Pear.
Health Catalyst acquired patient engagement platform Twistle for $104.5 million, plus a earn out payment up to $65 million if Twistle hits revenue milestones. Twistle is projecting $8 million of revenue in 2021 and EBITDA of ($2.5) - ($3.0) million in 2022. Per the Slack Community conversation this week, this deal makes sense as Health Catalyst looks to round out its population health / member engagement capabilities as it competes to win health system RFPs moving forward. Twistle's installed base of 40 customers, mostly health systems, also presents a cross-selling opportunity for Health Catalyst, which only had 74 customers with a data subscription contract as of its last 10-K. Link (Press Release). Link (Investor Presentation).
Centivo appears to have acquired Apostrophe, putting out a rather vague press release that they've acquired certain assets from Apostrophe. Both Centivo and Apostrophe have been playing in the self-insured health insurance start-up market, with similar focuses on simplifying the experience for employers and employees with narrowed networks and technology enabled experiences. Given the nature of the announcement it would appear Apostrophe has been struggling, and Centivo has swooped in to purchase Apostrophe's client base / IP. Link.
Hims & Hers also acquired a startup called Apostrophe this week, this one is a telehealth startup in the dermatology space. Seems like a relatively straight forward move at this point - Hims & Hers is attempting to become the platform play in the space and acquiring a player in the derm space expands its capabilities there. Link.
Lifepoint announced it is acquiring Kindred (not the home health business that Humana acquired, but the long term care business). This will combine Lifepoint's 87 hospitals with Kindred's 62 long term acute care facilities. Link.
Two IPOs priced and began trading this week:
Bright officially priced its IPO at $18 per share. This was below the anticipated range and ended the week down 4% from IPO price. While Bright may have hoped for a better first week, Bright's current market cap of $10.8B is double Oscar's market cap, which is down nearly 40% since its IPO back in March. Link.
Doximity priced its IPO at $26 per share, above its range of $20 - $23. It's price has jumped to nearly $56 over the week, putting Doximity at a market cap of almost $10 billion. Link.
Quanta raised $245 million to commercialize its portable hemodialysis machine. Link.
Home health technology platform AlayaCare raised $225 million. Link.
Fertility benefits startup Kindbody raised $62 million at a $612 million valuation. Kindbody's model reduces the cost of fertility treatment for employers by 20% compared to other fertility benefits managers. Link.
Cleerly, a startup building an AI algorithm to diagnose coronary artery disease, raised $43 million. This will be an interesting use case of AI to keep an eye on - according to this article Cleerly is targeting PCPs to help avoid a specialist referral. Can they navigate workflows to get PCPs to adopt this? Seems like a very cool tech. Link.
Nex Health raised $31 million to build a "Shopify for doctors and dentists". Everyone wants to be that platform these days! Link.
Bicycle raised $27 million to scale its virtual care platform for opioid use disorder. Link.
NuvoAir, a respiratory care platform, raised $12 million. Link.
FIGUR8 raised $12 million for its platform that assesses MSK issues. Link.
TRIPP raised $11 million, for a rather interesting sounding platform to address mental health issues combining psychadelics with a virtual reality platform. Sounds rather trippy. Link.
Ride Health, a medical transport platform, raised $10 million. Link.
Laguna Health, a post-hospital recovery platform, raised $6.6 million. Link.
BEKHealth raised $4 million for its clinical research software platform. Link.
Ro's Co-Founder shared a post on LinkedIn about Ro's approach to DTC marketing principles and how they apply the Jobs To Be Done theory to meet the needs of healthcare consumers. It's a relatively short post but one of the more insightful things I feel like I've read lately, highlighting well why the consumer-centric DTC approach is seeing so much traction lately with models like Ro. If I'm working at an incumbent healthcare organization struggling to communicate with my boss about why these DTC organizations are about to eat our lunch, this is a post I'd send their way. So many incumbent healthcare organizations are focused on things other than the consumer, and they forget to market to people based on what those people want, opening the door for Ro and others to come in and take over those relationships. This is the paradigm shift happening in healthcare that I don't think is fully appreciated by most traditional care delivery organizations - while you're focused on meeting the needs of your provider organization, these DTC orgs are going to steal your patients from you by meeting their needs. I'm not actually sure whether it's a good thing at the end of the day, but it's clearly coming. Link.
As part of Bright's IPO this week, the Bessemer team shared its investment memo in Bright's Series A round back in 2016. It's a worthwhile to read to check out why Bessemer bet on Bright - big market, Bob Sheehy as a leader, and a clear market entry strategy in Colorado via the narrow network strategy with Centura. Quite interesting to read and think through what has remained the same and what has changed - certainly back then Bright was significantly more focused on working with health systems than it is today. Also check out the financials - Bessemer's financial model suggested Bright would get to profitability by 2019, which has been off by just a few hundred million. Link.
Brendan Keeler provides a solid overview of what FHIR is and how it works. My basic takeaway, as with most things in healthcare: its complicated. Link.
Medicaid enrollment jumped 13.9% between February 2020 and January 2021. Over 80 million Americans now have health coverage through the Medicaid and CHIP programs. It shouldn't be surprising to see more and more venture dollars going after this market moving forward. Link.
KFF data shows that in some states two-thirds of ambulance rides risk surprise bills. Link.
Concert Health, a startup building integrated behavioral health services for primary care, is hiring a Controller. Link.
Firefly Health, a virtual first primary care and behavioral health startup, is hiring a Product Manager and a Software Engineer. Link 1. Link 2.
Ginger, an on-demand mental health support startup, is hiring a Product Manager. Link.
Iora Health, a primary care provider for the Medicare population, is hiring a Service Development Manager. Link.
Oak Street Health, a primary care provider for the Medicare population, is hiring a Product Owner. Link.
River Health, a membership-based primary and behavioral care health plan startup, is hiring an iOS Engineer. Link.
Stork Club, a modern fertility and parental care platform aimed at improving family benefits for employers, is hiring an Enterprise Account Executive. Link.
Zus Health, a startup focused on building a platform of healthcare-oriented, API-first services, is hiring a UX Research and Design Lead. Link.