Scoop: Peloton Equity-backed Arcadia seeks buyer

A sale process is underway for Peloton Equity-backed Arcadia, a data orchestration platform helping health care organizations succeed in value-based care, multiple sources tell Axios.

What's happening: A strategic-heavy process recently entered its second round, with a deal likely to be signed by mid-September, some of the sources say.

Details: The Burlington, Mass.-based company produces around $80 million of ARR, and is approaching break-even, they say.

• Deutsche Bank is providing sell-side financial advice on the process, sources add.

What they're saying: Strategics the likes of Parthenon- and Bain-backed Zelis, GTCR's Cedar Gate, H&F- and Bain-backed Athenahealth and Veritas' Cotiviti could make logical buyers, sources suggested.

• Looking to feed more growth, strategics "want more wallet share with customers; they want to extend their product suites," one source comments, pointing to Zelis' recent deal for Payer Compass as a good example. "Consolidation in the market just has to happen."

How it works: Arcadia extracts and aggregates disparate clinical and claims-based data from the EHR, providing insights and analytics for multiple use cases.

• That includes helping organizations transition to value-based care by, for example, finding and closing gaps in care and managing medical costs for specific populations.
• Other applications include improving risk-adjustment accuracy or payment integrity, as well as real-world data to support clinical research.
• Its customers span health systems, providers, payors, ACOs and life science companies.

Catch up quick: Arcadia last raised $29.5 million in December 2021, led by Cigna Ventures and other new and existing investors.

• Peloton Equity has been a significant investor in Arcadia since 2014, when it led a $13 million growth capital funding into the company.

State of play: Arcadia's closest competitor is Innovaccer, which, in a vastly different environment, raised $150 million in Series E funding last December. Mubadala Capital led the round that put a $3.2 billion valuation on the company, and was joined by several new and existing investors including Tiger Global.

• Other relevant players include Clarify Health, which in April reached a $1.4 billion valuation amid a $160 million Series D financing led by SoftBank Vision Fund 2.

Arcadia declined to comment, while Peloton did not return a request for comment.