'A very friendly elephant': Health tech favors partnerships over M&A
- Erin Brodwin, author of Axios Pro: Health Tech Deals

Illustration: Gabriella Turrisi/Axios
It wasn't mergers or acquisitions but partnerships that emerged as one of the biggest undercurrents in the health tech sector in 2022.
Why it matters: It was supposed to be the year of health tech M&A, but instead this year leaders mostly inked softer arrangements amid shaky market conditions and economic instability, Axios has learned.
Details: Smaller-scale M&A has slowed, as startups that normally would have moved to merge with or acquire a competitor or complementary business are instead partnering with those entities, several digital health CEOs and industry observers told Axios at HLTH.
- COVID forced more strategic thinking, says Availity CEO Russ Thomas, adding, "There were assets we thought we could buy [before the pandemic] that are now more expensive."
- "I think we'll see a reckoning where big bets don't happen, or happen a lot less," says Steven Wardell, a digital health consultant.
Zoom in: For home lab testing startup Getlabs, those conditions influenced its decision in April to launch Getlabs for Labcorp.
- The arrangement sees diagnostics market dominator Labcorp investing in Getlabs and launching a partnership combining Labcorp’s tests with the startup's phlebotomy service.
- "We think of [Labcorp] as a very friendly elephant," Getlabs CEO Kyle Michelson tells Axios. "We're not looking for M&A so much as potential partners."
Yes, and: Cohere Health CEO Siva Namasivayam agrees, adding that he has seen multiple former rival businesses narrow their focus in recent months — to the point where they are no longer competitors, but rather potential partners.
- "The market for organic growth has exploded," he says.
Meanwhile, facing rising demand for behavioral health services, home care management platform MedArrive signed a partnership with virtual-first mental health provider Brave Health.
- The partnership enables both companies to cross-refer members to their respective services.
- "Behavioral health was coming up a lot among our members," says MedArrive CEO Dan Trigub, "so we started bringing Brave into the home to curb mental health-related hospital admissions."
The intrigue: Upmarket players with plenty of cash to spend aren't necessarily knocking down doors to roll up.
- Rushika Fernandopulle, the CIO of One Medical (which bought Iora Health and which Amazon recently agreed to purchase), cited the value of organic growth over M&A activity.
- "Generally we are building from scratch," he says. "We think it just works better."
💭 Our thought bubble: If and when market conditions improve, we wonder if these partnerships could evolve into full-scale takeovers.