Illustration: Aïda Amer/Axios
Enhanced Healthcare Partners has invested $45 million into revenue cycle management (RCM) tech company Janus Health, Axios has learned.
Why it matters: RCM remains low-hanging fruit to help health systems become more efficient and thus more profitable — presenting a compelling value proposition for PE.
Details: Fresh funds will finance market expansion and product development, with a focus on organic growth, says EHP partner Won Park, who declined to comment on deal terms.
- EHP invests in companies generating around $8 million in recurring revenue, Park says.
- "We believe we can grow it to a company making $100- to $200 million in revenue," he adds.
- Janus is not yet profitable, sources say, and is valued at $206 million, per PitchBook. EHP declined to comment on financials.
Catch up quick: Founded in 2020, Janus has raised about $10 million from investors including Caduceus Capital Partners and Ensemble Health Partners.
- The deal with EHP was sourced proprietarily after more than a year of relationship building, Park tells Axios.
- EHP looked at more than 50 RCM assets before landing on Janus.
- "It is a company that is transformative, disruptive in revenue cycle management space and is efficient with its capital," Park says.
What's next: "The plan is to hold it for around five years, but you never know," Park says.
- "Strategics have been circling this asset."
Between the lines: "Janus has been very capital efficient, and despite it growing like a weed it has been operating with a bootstrap mentality," Park says.
- Profitability — or a clear path to it — is taking precedence over other growth metrics when it comes to health tech investing.
Editor's note: This story has been corrected to note the company name is Janus Health, not Janus Healthcare.
