Exclusive: LeanTaaS acquires Hospital IQ, creating $1B hospital streamlining company
Hospital streamlining software developer LeanTaaS acquired clinical workflow automation provider Hospital IQ, CEO Mohan Giridharadas tells Axios exclusively.
Why it matters: The combined entity is worth more than $1 billion, creating one of the largest providers of hospital efficiency tools during a time when health systems face a major labor crisis and financial strain.
Deal details: Kirkland & Ellis LLP served as legal advisor on the transaction, which comes just months after Bain Capital's June acquisition of a majority stake in LeanTaaS.
- "Almost immediately after that acquisition, we started that conversation [with Hospital IQ CEO Rich Krueger], and it grew organically," Bain Capital managing director Paul Moskowitz tells Axios.
State of play: Amid high demand for automation in health care, a number of companies have attracted significant investor interest, with businesses offering tools for everything from patient scheduling and clinical workflow to capacity prediction.
- Tebra, the result of a tie-up between medical software developer Kareo and health care marketing company PatientPop, last July raised $72 million at a $1 billion+ valuation.
- Notable Health, which sells so-called "digital assistants" to perform manual and repetitive work for clinical staff, in 2021 collected $127 million in Series B funding with support from Microsoft CEO Satya Nadella.
- Rhyme (FKA PriorAuthNow), which offers software for streamlining treatment approvals, last February pulled in $25 million in Series B capital.
How it works: LeanTaaS and Hospital IQ offer hospitals predictive tools to monitor resource use and reduce patient delays, maximize revenue and deliver better care.
- Newton, Massachusetts-based Hospital IQ is focused on staff, while Santa Clara, California-based LeanTaaS is focused on assets, such as machines and rooms.
- The combined company will service more than 180 health systems and clinics and roughly 600 to 700 hospitals, Giridharadas says.
Our big question: Last year was predicted to be a banner year for digital health M&A, but failed to meet most industry observers' expectations. Could this early blockbuster deal suggest those predictions weren't wrong, just early?