All Access

Health Tech Deals

Health Tech Deals Alerts

Alert

Standard

Health Tech Deals Thought Bubble

Thought Bubble

mustard

BFD Expert Voices - Health Tech Deals

BFD Expert Voices

AmplifyMD, a telehealth startup, has raked in a $23 million F-Prime Capital-led Series A, the company tells Sarah.

Why it matters: The company's technology addresses the scarcity of specialists in most American hospitals that directly affects patients.

Seed round co-leaders Forerunner Ventures and Greylock also participated in the round.

State of play: Over 3,300 of the country's 6,000 hospitals have a shortage of specialists across at least three areas, and most of the rest are missing at least one critical specialist.

Thus, patients are typically transferred to a tertiary medical facility to address gaps in care, a costly reality that patients dislike.

For hospitals, “a few [patient] transfers a month can be the difference between being positive and negative in terms of profitably,” says CEO Meena Mallipeddi, who co-founded AmplifyMD with her husband, Anand Nathan, less than three years ago. 

Hospitals lose $17 billion-plus annually from preventable patient transfers, the company says, and a single patient transfer can cost anywhere from $10,000 to $15,000, Mallipeddi adds. 

How it works: Patients access specialty telehealth directly through hospitals that are connected to its network of specialists that physically work out of other facilities. 

This stands in contrast to the direct-to-consumer model many virtual care providers like Teladoc have focused on. 

AmplifyMD's software streamlines and automates virtual care delivery and billing, and can be integrated with existing EHRs and workflows in hospitals. Easing documentation drives engagement by removing “a lot of the key barriers for [hospitals] in terms of not wanting to do telehealth,” Nathan says. 

"For a lot of smaller hospitals to be able to create a program like this is really hard... What we wanted to do was really create a black box that had all those pieces solved for them."

AmplifyMD originally focused on small, community rural hospitals, but ultimately realized there is a need for health systems [almost] everywhere. “We can step in because we’ve made it so simple,” Mallipeddi says. “it’s plug-and-play, where [hospitals] can say ‘this is a specialty I need,' what can you do?”

Background: The husband-and-wife team launched AmplifyMD in November 2019 with a pilot program at DeSoto Memorial Hospital in Arcadia, Florida.

Formerly known as T SQRD, AmplifyMD's platform is used by 20-plus hospitals.

With virtual care, it expands patient access to specialists in cardiology, neurology, psychiatry, pulmonology, infectious disease, nephrology, hematology and oncology.

What’s next: The funding will be used to invest further in AmplifyMD’s technology, while driving scale by adding more health system partners while also exploring opportunities to penetrate adjacent facilities.

As patients are discharged into SNIFFs, LTACs or the home, "it’s natural for AmplifyMD to follow the entire patient journey,"  Mallipeddi says. 

Yes, but: Critics of telehealth point to its transactional nature, where physicians are focusing on the number of patients seen and often engaging with patients once and then never again. 

Conversely, AmplifyMD's co-founders say it is facilitating small, dedicated care teams that work together and coordinate care across the continuum. As a system of record for all remote workflows, it can better capture all patient outcome metrics.

The bottom line: AmplifyMD intends to modernize the way inpatient telehealth has historically been used by health systems, and may ultimately help to lay the framework for value-based care.

“We want to ensure we are delivering value and that is laying the foundation for us to move to a value-based pricing model,” Amaan says. 

1 big thing: Amplifying specialty care problems

Illustration of a red cross spinning to reveal money

Berkshire Partners and Warburg Pincus are making a significant investment in Ensemble Health Partners that sources tell Sarah values the revenue cycle management company north of $5 billion.

Why it’s the BFD: From a valuation perspective, Ensemble emerges as one of the year's largest health tech deals so far. 

Ensemble has quickly proved to be a very successful investment for Golden Gate, which has only made a few health care investments. 

Intriguingly, all the partners leading this investment recently departed from the San Francisco-based firm. 

The Cincinnati-based company now has the backing of two very experienced health investors, and that should put it in a stronger position for growth.

Catch up quick: Ensemble pivoted to a narrow private equity-focused sale process earlier this year, having previously considered going public. 

This reflects a broader trend of investors switching gears amid a volatile public market environment, prioritizing a sale (and in other cases consolidation) as opposed to an IPO in the near term.

Details: Ensemble provides revenue cycle management services to nearly 300 hospital partners across the U.S. It will use the funds to support continued growth and investment in new technology and people.

Financial terms and the deal’s structure were not disclosed today, but Berkshire and Warburg, as equal shareholders, will own an approximately 46% combined stake in Ensemble, Axios has learned. 

Catholic health system Bon Secours, an existing large minority owner, will retain an approximately 44% stake. Management and Golden Gate will hold roughly 10%, the latter being the smallest equity owner, sources say.

Guggenheim Securities advised Ensemble, while Goldman Sachs, TripleTree and William Blair advised Berkshire and Warburg. BofA Securities advised Golden Gate.

Flashback: When Golden Gate bought a slight majority stake in Ensemble in May 2019, sources told Sarah the deal assigned the business an enterprise value of $1.8 billion-plus.

Bon Secours received approximately $1.2 billion in proceeds at that time, sources said.

Mercy Health in 2016 bought Ensemble for $60 million upfront, plus contingent consideration of up to an additional $50 million, the Cincinnati health system said at the time.

Also of note: Rishi Chandna and Doug Ceto, who led the Ensemble investment for Golden Gate, are among recent departures from the San Francisco-based private equity firm, but sources said a month ago that both remain on Ensemble's board.

The firm's only other health care-related deal in recent years includes its 2019 investment in Invo Healthcare, a provider of autism and childhood behavioral health services. 

That same year it sold back life sciences tools company Cole-Parmer to GTCR.

Golden Gate and Warburg declined to comment, while Berkshire and Ensemble representatives could not immediately be reached.

2. The BFD: Ensemble gathers $5 billion-plus 

Illustration of price tag stickers in the shape of a health plus.

KKR is in advanced talks to buy Spanish fertility clinic chain Ivirma Global for between €2.5 billion and €3 billion, per Bloomberg.

Why it matters: Fertility spent decades as a private market afterthought, but is now receiving intense attention from early-stage startups through multibillion-dollar buyouts, our colleague Dan Primack writes.

It also could be another example of private debt picking up where syndicated loans fell off, following last week's deal between Thoma Bravo and Anaplan.

Other bidders reportedly included Carlyle, Cinven, KKR and Nordic Capital.

The bottom line: Ivirma claims to be one of the world's largest reproductive medicine groups, with around 75 clinics and 28 labs in nine countries.

3. Investors flock to fertility care

Illustration of a bird and two bees all holding briefcases

Carlyle and PAI Partners agreed to buy Theramex, an Italian pharma group focused on women’s health, from CVC Capital Partners for a reported $1.4b. http://axios.link/QWeX

Brain.space, an Israeli brain infrastructure startup, is coming out of stealth with an $8.5m seed round. Mangrove Capital Partners led the round. https://www.brain.space/

Janali, an Indian infertility treatment startup, raised $2.2m from YC, Olive Tree Ventures, Good Water Capital, Soma Capital, Brightlane VC and NB Ventures. http://axios.link/PCbr

Kythera Labs, a data science platform for health care, raised capital from Espresso Capital. The company said it plans to acquire additional laboratory, genomic, biomarker and primary research data assets. https://www.kytheralabs.com/

4. Deals o' the day

23andMe named Lucy Norcliffe-Kaufmann the new lead scientist for its Parkinson’s research program. She was previously senior director of clinical science neurology for Theravance Biopharma US, Inc.

Concha Labs named Mina Hanna supply chain and logistics manager. Hanna was previously operations manager for Ro.

5. It's Personnel

Happy Monday, Health Tech enthusiasts. Lots o' action, so let's get right to it!

🙏 Thanks for reading Axios Pro Health Tech! Please ask your friends, colleagues and family members to sign up.

March 28, 2022

1 big thing: Amplifying specialty care problems