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Rhea Fertility, a Singaporean fertility clinic roll-up, secured $10 million from Thiel Capital to connect families in Asia with fertility care, CEO Margaret Wang tells Aaron.

Why it matters: Southeast Asia has become a fertility care destination, particularly for people in China, which restricts genetic testing and egg freezing for single women.

Catch up quick: In June 2023, Rhea got an initial $20 million from investors including Thiel Capital, The Olayan Family of the Olayan Group, Blue Lion Group, and others.

The company was incubated by Recharge Capital, a thematic investment firm with women's healthcare as a core focus.

How it works: Rhea aims to provide a network of continuous fertility care across geographies, Wang says.

The company primarily acquires fertility clinics, with nine currently in Malaysia, Thailand, China and Singapore.

Alongside in-vitro fertilization (IVF), Rhea offers AI-driven diagnostics and data analysis to better predict success rates, and a wellness program featuring a supplement regimen and acupuncture services.

Zoom in: Two of Rhea's clinics, in Malaysia and Thailand, are profitable. The company acquires up to 80% of its clinic targets, "leaving room to incentivize going forward," Wang says.

The company is generating "tens of millions" of dollars in revenue, per Wang.

What they're saying: "Oftentimes, the family are on this journey alone, having to hunt and gather info and help," Wang says.

Rhea's aim is to offer a "global network, a one-stop shop for all fertility needs," she adds.

The big picture: With scant insurance coverage from payers and employer health plans in the U.S., many patients struggle with the financial burden of IVF.

A single cycle can cost $30,000 — pushing many Americans to seek more-affordable treatments abroad.

What's next: Rhea is opening a Houston consultation clinic to help develop personalized fertility plans for patients, Wang says.

The company is eyeing California as its next U.S. region for expansion and plans to penetrate Greece and Spain while continuing to grow in Southeast Asia.

Rhea could seek more funding this year, Wang says, though she notes future financing and M&A plans will be opportunistic.

State of play: Private equity has been cautiously optimistic about fertility care, with several notable international bets in recent years.

KKR and GED Capital-backed IVI RMA acquired Spanish fertility business Eugin Group from Fresenius for a reported €500 million in November.

BPEA EQT acquired a majority stake in Indira IVF, India's largest chain of fertility clinics, for a reported $657 million in July.

Nordic Capital acquired U.K. IVF chain Care Fertility from Silverfleet in 2022.

1 big thing: Rhea raises $10M to expand IVF network

Illustration of a stroller with money inside of it.

ADHD-treatment video game maker Akili Interactive is going private in a merger with Virtual Therapeutics.

Why it's the BFD: The take-private spells the end of an era for digital therapeutics companies that SPAC-ed their way to the public markets, Erin writes.

Zoom in: The merger is expected to net Akili shareholders $34 million.

The combined organization will operate as Virtual Therapeutics, a private Kirkland, Washington, company focused on mental health and wellness.

Context: The move comes a month after Akili said it was seeking strategic alternatives and a week after Click acquired acquired the assets of delisted Better Therapeutics.

The big picture: Digital therapeutics companies have sustained widespread market failure — particularly those that went public via SPACs.

Pear Therapeutics, once considered the most mature of such businesses, was sold for parts at auction a year ago.

Lack of reimbursement for such tools — which many of their makers hoped to see treated as traditional therapeutics or drugs — remains the biggest obstacle to the industry.

Insurers have been reluctant to embrace digital therapeutics amid a lack of long-term effectiveness data and concerns about the technologies' ability to cut costs.

What they're saying: "In health care, if it doesn't get paid, it doesn't get done," Carrie Nixon, managing partner at Nixon Gwilt Law, previously told Axios. "We're unlikely to see a major success in the field until there is a reliable reimbursement pathway in place."

💭 Erin's thought bubble: It's almost as if SPACs were a bad idea.

2. The BFD: Akili deal spells end of SPAC digital therapeutics

Illustration of a red health plus made of glass, with the red color leaking out onto the ground. 

Want more health tech deals? Check out the Axios Pro Deals Tracker.

• Weave Bio, a Connecticut regulatory automation company for the life sciences, raised a $10m seed led by Innovation Endeavors and Magnetic Ventures. axios.link/4558JHx

• GTCR agreed to buy Surmodics (Nasdaq: SRDX), a Minnesota maker of chemical coatings for medical devices and tests, for $627m or $43 per share. axios.link/3V1GKnl

• Sightpath Medical, an MGG Investment-backed ophthalmic surgical services provider, acquired Pennsylvania LASIK provider PennVista. axios.link/3R2uHoH

• Solis Mammography, a Madison Dearborn Capital Partners-backed women's and breast health services company, acquired Florida imaging center Mammography and Ultrasound Imaging Center (MUSIC). axios.link/4bE4rt4

• Precision for Medicine, a Blackstone-backed clinical research organization, acquired British biometrics services provider Algorics. axios.link/3yDBleP

• Nordson (Nasdaq: NDSN) agreed to buy Atrion (Nasdaq: ATRI), an Allen, Texas, provider of medical infusion fluid delivery and niche cardiovascular solutions. The deal is valued at around $800m in cash, or $460 per share. axios.link/4bFkIxL

• Stout, a Chicago middle market-focused investment bank, acquired health care valuation and consulting company HealthCare Appraisers. axios.link/4dTB1IO

3. Deals o' the day

• Adam Glasofer, former global head of health care at AWS, joined Fello as chief medical officer. myfello.app

• John Connor, former VP of business development at eHealth Inc., joined Fair Square Medicare as VP of business development. fairsquaremedicare.com

• Jorge Aquino, former senior director of innovation at IQVIA, joined Scene Health as VP of business development for life sciences. scene.health

• Marcus Dorstel was promoted from VP to SVP of operations at Turquoise Health. turquoise.health

• Solomon Eskinazi, former general counsel for Excelsior Medical, joined Kain Capital as general counsel. kaincap.com

4. It's Personnel

🤐 Insurers boast AI use to investors but would rather not discuss it — Stat

📉 Tracker to help patients find GLP-1s amid shortages — Axios

✂️ Washington prepares for cuts to health programs — Axios

😶 Pacs Group CEO calls for caution around PE — Modern Healthcare

5. Your daily dose

Illustration of a pill capsule as the bell hammer on an alarm clock.

👀 Situational awareness: The California Assembly passed a bill requiring PE firms to get attorney general consent for health acquisitions.

👥 Erin has the entire family in town for the weekend; wish them all luck.

😬 Thanks for reading, and extra thanks to newsletter editor Claire Rychlewski and copy editor Brad Bonhall. Please ask your colleagues, friends and family to sign up.

Axios

Health Tech Deals

May 30, 2024

1 big thing: Rhea raises $10M to expand IVF network