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BFD Expert Voices - Health Tech Deals

BFD Expert Voices

FTV Capital partner Alex Mason sees reasons for optimism in the growth equity market in 2024.

Why it matters: As sponsors are stuck in neutral by bid-ask spreads and interest rates, growth equity is more insulated from macro factors.

This interview was lightly edited for length, style and clarity.

Can you describe the dealmaking landscape in the world of growth equity?

"We are cautiously optimistic, as certainly year-over-year comparisons in terms of deals are pretty favorable and in terms of just activity, we were at a total dearth of activity in 2023 so it's definitely up in a lot of ways.

In some ways, growth equities may be more immune to other conditions than the private equity guys, as they depend on how much leverage is used. We are still fundamentally really focused on revenue and profit growth.

Those businesses that are still growing are getting a lot of attention and so there's sort of too much money on the sideline to not have an active year in 2024."

How is operational change impacting efficiency in health care ?

"Health care is resistant to operational change. Asking someone to change how they conduct their day-to-day in order to adopt technology is not a winning formula. So you think about these incremental ways in which I can slightly readjust what you're doing, but it's not a huge ask from the CIO or CTO from a budget perspective.

It's not a huge ask for the physician to change this. And you think about those gains and then it just starts to compound. And if you think about that and just multiply by sort of TAM along those things, it's really compelling. It doesn't make it the most sexy headline, because you take an operational thing and make a little bit better. I think that is really how those great health care businesses scale over time."

What are the biggest challenges to being a health care investor today?

"It's related to what is described as a challenge as an operator, which is the rate of adoption, I'd say, particularly on the provider side. The velocity of decisions and the inverse of that, though, is when these decisions are made, there are incredibly sticky and retentive businesses. You sort of cemented how these workflows happen inside an ambulatory setting or an inpatient setting or acute setting. So you've always got to remind yourself that there's the upside to the slow adoption to do it.

Regulation is another one and motivating factors around adoption of a company or being involved with a product or service. What I mean by that is I think you've always got to be aware around a highly regulated environment — that there is good reason for some slowness at times. You've got to take your head up from it and think about the longer-term picture and a longer-term arc."

🎣 Fun fact: Mason went deep sea fishing on his last vacation in British Columbia.

FTV's Alex Mason talks growth equity and investor challenges

Growth equity is more insulated from macro factors than private equity.

Photo illustration of Alex Mason surrounded by abstract shapes. 

Photo illustration: Axios Visuals. Photo: Courtesy of FTV Capital

Health tech deals

FTV Capital partner Alex Mason sees reasons for optimism in the growth equity market in 2024.Why it matters: As sponsors are stuck in neutral by bid-ask spreads and interest rates, growth equity is more insulated from macro factors.

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FTV's Alex Mason talks growth equity and investor challenges

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