Bain Capital's Devin O'Reilly on health AI investing

Solving for drug development complexity is on Bain Capital's health AI wish-list, head of health care in North America Devin O'Reilly says.

Why it matters: As generative AI entrants mature, private equity investors are likely to play an even larger role in the space.

Context: Bain and Thoma Bravo led a merger between clinical trial vendors Suvoda and Greenphire earlier this year.

This interview has been lightly edited for length and clarity.

Sponsors are placing a lot of AI-leveraged RCM bets. What's a non-billing area of AI that excites you?

• "I'm pretty optimistic and excited about the drug development and discovery space. There's exciting companies like Isomorphic Labs that are doing some really interesting things in this space."

What do you make of the valuation environment for health care AI businesses?

• "I think some of the really high extraordinary valuations in the broader health tech space have been more in the venture stage."
• "Time will tell as to whether some of those valuations were justified. But I'd be personally a bit cautious about some of the valuations in the earlier-stage health tech space."
• "We're looking at typically multiples of profitability when we're looking at investment opportunities. In some cases, for some of the earlier stage opportunities, we're also looking at revenue multiples."

What's the exit environment like right now for scaled PE-backed assets?

• "The broader exit environment looks more normalized at the moment."
• "The public markets are a very viable option. We took a company, one of our companies in our portfolio public last year, Waystar. That's performed very well as public company, and they're in the rev cycle software space."