Axios Pro: Health Tech Deals

June 17, 2022

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Happy Friday, Health Techies!

👀 Situational awareness: Bausch Health abandoned IPO plans for its Solta skin-care business after its recent IPO of eye-care spinout Bausch + Lomb fell short of expectations. The latter, once evaluated by PE as a carve-out opportunity, was viewed as a bellwether of future public offerings.

1 big thing: Circulo Health prepares major layoffs

Illustration of a hand with a pair of scissors cutting the rope of a life preserver.  
Illustration: Aïda Amer/Axios

Circulo Health, an Ohio-based health tech startup, plans to lay off up to 50% of its staff amid a larger shift in its business plan, Erin has learned.

Why it matters: Circulo is one of a small but growing number of tech-driven health care companies focused on people who use Medicaid, a population the vast majority of digital health entrepreneurs and investors have long ignored.

Context: Circulo is co-founded and led by Sean Lane, who also founded and currently leads health care company Olive AI. Olive recently saw the departure of more than 20 high-level employees, Axios recently reported.

Flashback: In January, Circulo acquired primary care startup Huddle Health.

  • The following month, Circulo said it raised $50 million in Series A funding from Drive Capital, General Catalyst, Oak HC/FT and SVB Capital.
  • The company has between 300 and 350 employees, the sources say.

What they're saying: Four sources, including current employees, say Circulo has undergone some big business model shifts, including shelving plans to build a Medicaid-focused insurance product.

  • Instead, the company now is focused almost exclusively on at-home care for individuals with intellectual and developmental disabilities (IDD), the sources say.
  • "The program they decided to concentrate on is IDD," one current employee tells Axios, "so in other words they put everything else aside."

A Circulo spokesperson confirmed Erin's reporting but declined to comment on the record.

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