Axios Pro: Health Tech Deals
May 02, 2022
Axios Pro Exclusive Content

🌸 Happy Monday, Health Tech readers, and hello May.

🔥 Situational awareness: After Teladoc and Accolade last week saw their stocks get hammered amid disappointing quarterly reports, Sarah sat down for a fireside chat with Transcarent’s Glen Tullman at ATA in Boston this morning.

Sarah asks: Will Transcarent go after Accolade? What mistakes were made after Teladoc bought Livongo? Stay tuned for Glen's responses.

1 big thing: Capable enables care with $6M seed

Illustration of a hand tapping an app icon with a medical cross
Illustration: Annelise Capossela/Axios

Capable Health, maker of a plug-and-play software platform for nascent virtual care startups, raised $6 million in seed funding to expand its provider portfolio, CEO Peter MacRobert tells Erin exclusively.

Why it matters: Many digital health companies build their apps from scratch, a lengthy process that often involves complex puzzles of separate components. Capable is among a small number of startups aiming to ease the process with an out-of-the-box platform.

Details: M13 led Capable's seed funding round and was joined by AlleyCorp and Able Partners.

Driving the news: The recently passed federal rule banning information blocking gives patients unprecedented access to the health data and that lit a fire under the virtual care sector.

  • "These businesses are all building from zero and it's like, why? If you were building an e-commerce business you wouldn’t start from scratch," MacRobert says.

How it works: Capable's software platform lets providers build and grow HIPAA-compliant digital clinics, and offers them tools for...

  • Patient onboarding
  • Care plan creation
  • Patient-provider messaging and video chat

Meanwhile, Capable has partnerships with other HIPAA-compliant companies that startups can use to add tasks like scheduling and lab and prescription ordering.

By the numbers: New York-based Capable says its customers get set up in roughly eight weeks, compared to the five to seven months other entrepreneurs in the sector tell Axios they spend building their foundations.

  • The company has 12 customers including New York-based Alloy, a women's telehealth startup focused on menopause, and Cleared, a digital pharmacy for allergies.

💭 Our thought bubble: Capable reminds us a bit of two other digital health infrastructure companies — Wheel and Zus Health, which launched with a bold plan to become both the common platform digital health companies use to build their tools and a unified health record.

What they're saying: Earlier phases of the digital health wave centered on consumer and provider-focused businesses, observers, founders and venture backers tell Axios. In the current phase, we're seeing a proliferation of foundation-building companies for entrepreneurs.

  • The industry is "now big enough to need its own enablement platforms — the pick-sand-shovels players," says Ruby Gadelrab, CEO and founder of MDisrupt, a platform that connects digital health founders to sector experts.
  • "The public markets may be bearish at the moment on telemedicine [but] I’m still long term bullish on the infrastructure opportunities in digital health," says Deena Shakir, a partner at Lux Capital with a range of investments in the space.

What's next: Shakir says health tech infrastructure businesses have a bright future as enablers of the sector's next wave.

  • "These companies have the opportunity to become the Stripe, AWS, Shopify, etc. for digital health," she adds.

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