Axios Pro: Health Tech Deals

February 22, 2022

Axios Pro Exclusive Content

Hello, Health Tech enthusiasts!

💸 Situational awareness: If last week was a quiet one for digital health, this (short) week is already shaping up to make up for it. Watch this space!

1 big thing: Dentists get their tech fillings

Illustration of a computer keyboard key with an icon of a tooth on it.

Illustration: Gabriella Turrisi/Axios

Dental support organizations (DSOs) have for decades drawn big checks from private equity, and now investment in the technology to directly support dentists is following.

Why it matters: Running dental clinics more efficiently is increasingly important amid today’s labor shortages and war for talent.

  • DSO consolidators typically achieve synergies through a traditional buy-and-build strategy, but investing in technology can enhance value while also helping recruit dentists.

Driving the news: Bregal Sagemount's majority investment in DentalXChange, which partner Blair Greenberg calls the “connective tissue between dentists and payers."

  • DentalXChange is an electronic data interchange (EDI) platform that lets dentists electronically submit claims to payers.
  • It also helps dental insurers ingest claims.
  • DentalXChange is unique as a pure-play dental EDI, but broader platforms like Jordan Co.’s Vyne and Change Healthcare have offerings in this niche.

Yes, and: DentalXChange is just “scratching the surface," Greenberg says, with a bigger opportunity to take data and help DSOs understand their claims and individual practice performance.

  • “This piece that we provide today is the fabric of the claims space but there’s a lot more that we can do with it,” Greenberg tells Sarah.
  • DentalXChange also fits with Bregal Sagemount’s focus on recurring segments largely uncorrelated to the macro environment: “Sectors that have low volatility and are increasingly adopting tech — that’s exactly what we try to find every day,” the investor adds.

State of play: Dental tech could be about to undergo a significant period of investment as a proliferation of new companies gain traction.

The bottom line: New technology and automation tools are driving a much-needed cleaning of the dental industry.

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