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Exclusive: Health tech firm HLM gets new leaders

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Feb 15, 2024
Illustration of two checks forming a health plus.

Illustration: Aïda Amer/Axios

Health tech investment firm HLM Venture Partners is getting new lead investors, partners Michael Ludwig and Joseph Mayer tell Axios exclusively.

Why it matters: The new partners plan to raise HLM's sixth fund and fill a market gap that's seen a paucity of mid-stage health tech deals with more check-writing creativity.

Zoom in: Ludwig, an experienced health care industry banker, and Mayer, a trained physician and health care operator, will continue to invest along HLM's historic themes.

  • The focus will be on companies trying to cut cost from the health care system and those addressing unmet needs — while broadening the scope of the types of transactions they execute.

By the numbers: HLM currently has $400 million in assets under management and has historically invested north of $1 billion in health care companies across tech-enabled services, IT and medical devices.

Catch up quick: The Boston-based venture capital and private equity firm has backed companies across a range of growth stages throughout its 40-year history — from mature businesses like Change Healthcare and Teladoc to startups like Tebra, ShiftKey and Main Street Health.

What they're saying: Ludwig joined HLM to address the recent gap between early-stage venture deals and later-stage private equity arrangements by being flexible around deal-making type.

  • "The market has bifurcated itself too narrowly," Ludwig says. "The in-between is really interesting. It's messy, it's sometimes over-capitalized, it can be complex. But that's inherently where we think the opportunity is."
  • "Having the aperture to be creative around the type of transaction is something that [Mayer and I] both bring to the table," he adds. "Coming into a round with a family office, with a larger private equity firm, I think we are interested in that type of flexibility."

Flashback: Ludwig was a partner at investment bank MTS Health, while Mayer is a trained physician, and a former health care operator and adviser at PE firm Elements Health.

The intrigue: Like other specialized firms in the sector, HLM will have to navigate a precarious digital health market in which overall funding has fallen off a cliff and the investment playbook is being rewritten in real time.

  • Ludwig and Mayer say they believe the firm's ability to do deals across venture, growth, and private equity gives them an edge.
  • "We're doing our best to come in and learn as much as we can from the partners who've been here for a long time and ensure the culture of the firm continues," says Ludwig. "So it's about blending that with the things we want to do to expand, and striking that balance."
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