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

topics

politics-policy

epstein-files

donald-trump

2026-midterm-elections

immigration

behind-the-curtain

race-and-equity

technology

privacy-tech-regulation

automation-and-ai

tiktok-news

big-tech

social-media

cybersecurity

economy

social-security

inflation

tariffs

federal-reserve

jobs

transportation

business

stock-market-news

retail-news

crypto

media

elon-musk

dealmaking

health

rfk-jr

drug-prices

axios-explains-abortion

public-health

world

israel

axios-explains-ukraine

iran

russia

china

energy-climate

nuclear-energy

climate-energy-policy

climate-change

extreme-weather

alternative-energy

electric-vehicles

science

emerging-tech

biomedicine

newsletters

pittsburgh

atlanta

san-diego

charlotte

boulder

washington-dc

kansas-city

dallas

denver

detroit

des-moines

austin

boston

chicago

cleveland

columbus

houston

indianapolis

miami

nashville

new-orleans

nw-arkansas

philadelphia

phoenix

portland

richmond

salt-lake-city

san-antonio

san-francisco

seattle

tampa-bay

twin-cities

raleigh

huntsville

colorado-springs

axios-local

axios-pro

axios-live

the-axios-show

Since his last trip to Las Vegas, Adam Pellegrini has been mulling the idea of using a "hope index" to track the progress of people using his cancer support app.

Why it matters: Throughout his career at both startups and health behemoths, the Jasper Health CEO has recognized a common problem: Digital health companies lack reliable means of measuring their programs' impact on patients. 

This led Pellegrini to wonder whether positive outcomes — such as healthy days or even hope — could serve as more helpful indicators. 

Driving the news: As the digital health sector rightsizes amid tough market realities, entrepreneurs and investors are beginning to prioritize clinical rigor above a growth-at-all-costs mindset.

Zoom in: The idea of a hope index first occurred to Pellegrini at the HLTH conference in Las Vegas in November, when he was thinking about how people's perception of how lucky they are — the "luck index" — varies based on random external factors, such as whether they damaged their car or spilled a drink.

Between the lines: Almost every digital health company has a means of measuring negative outcomes, such as depression or high blood pressure, but the industry still lacks a standardized way to determine impact of their interventions on patients.

Worse still, many digital health companies aren't universally tracking or quantifying outcomes at all — positive or negative — meaning there's little hard data on whether their offerings are helping or hurting patients.

Per a June 2022 study in JMIR, in which Rock Health researchers assessed 224 companies, nearly half had a clinical robustness score of zero out of five, with five representing businesses that had the highest number of clinical trials and regulatory filings.

What they're saying: Several entrepreneurs and clinicians at the J.P. Morgan Healthcare Conference told Axios they were experimenting with more closely tracking the beneficial results of their interventions. For example:

DispatchHealth CEO Mark Prather said his company takes into account the "I love you score," or when a patient tells one of the companies' care team members that they love them.

A benefit of treating patients at home instead of the hospital is being able to view positive indicators like a balanced gait, healthy food in the kitchen and solid relationships with neighbors, he added.

Included Health chief medical officer Ami Parekh says her company has been using the CDC's "healthy days" metric, a series of questions designed to assess someone's quality of life.  

Town Hall Ventures general partner Andy Slavitt says his firm is "obsessed with NPS, properly measured," referring to net promoter score, a metric that asks respondents to rate the likelihood they'd recommend a product to a friend or family member.

The bottom line: Difficult macroeconomic conditions are prompting digital health movers to focus on creative ways of demonstrating evidence and outcomes.

🎲 1 big thing: The case for a "hope index"

Illustration of a ladder made out of syringes. 

Alpine Investors-backed DSO Lightwave Dental is on the block, sources tell Claire.

Why it's the BFD: With several PE-backed peers reaching 5-year-plus hold times, Lightwave could be one of a handful of sponsor-backed dental platforms coming to market after a sluggish 2022.  

What's happening: Houlihan Lokey is advising Woodbridge, Virginia-based Lightwave, the sources say.

Lightwave is being marketed on around $40 million in EBITDA, they note.

The process launched in the fourth quarter of 2022, one source adds.

Driving the news: Yesterday, HGGC announced its acquisition of Utah-based DSO Dentive.

That deal was a leveraged buyout, HGGC partner Pat Dugoni told Axios, declining to disclose the lender or other financials.

Not only was Dentive around the same size, at $40 million of EBITDA per Axios reporting (Dugoni declined to comment), but that auction was also led by Houlihan Lokey.

Catch up fast: Alpine acquired Lightwave in 2016 for an undisclosed price.

The company has executed several acquisitions since, most recently buying Blue Ridge Orthodontics and Smoky Mountain Dentistry in March 2022.

Lightwave has 76 practices across Virginia, North Carolina, South Carolina and Alabama, over 1,800 employees, and is a non-Medicaid provider, per its website.

Context: Dental platforms generating from $20 million to $40 million in EBITDA are continuing to trade at 12x to 15x EBITDA, one source says.

"If it's fully integrated, no Medicaid, has a good management team and a good integration team, they're going to fetch in that 13x to 14x range," he says.

Additionally, although buyers are taking a more critical eye on EBITDA adjustments, the source noted that many platforms are still getting deal pipeline credit for their financials.

Of note: Dental bolt-ons aren't exactly cheap at the moment.

Practices in the $1 million to $2 million EBITDA range are fetching upper-single-digit to lower-double-digit multiples, a source says.

Paying up for add-on acquisitions could come back to bite DSOs that are still recovering from the pandemic impact and the ongoing labor crisis. 

State of play: Though PE hold times are stretching longer, several long-in-the-tooth assets seem due for a trade soon. 

NPK Capital formed Guardian Dentistry in 2018, and the platform has since completed a handful of debt transactions.

Linden Capital acquired Sage Dental in 2012 and has since completed debt refinancings via Twin Brook Capital Partners, per PitchBook. 

Silver Oak Services Partners has held Smile Partners since 2017 and hired Piper Sandler last year to explore a transaction. 

Houlihan declined to comment. Alpine did not respond to a request for comment. 

2. The BFD: Lightwave Dental scoop

Illustration of a toothbrush with dollar bills as bristles.

Kinspire, a Denver-based pediatric occupational therapy platform, has raised $3.6m in seed funding. Corazon Capital and Looking Glass Capital co-led and were joined by Bradley Tusk, Difference Partners, Great Oaks VC, Service Provider Capital, The Fund and Copper Wire Ventures. www.kinspirehealth.com

SetPoint Medical, a Valencia, Calif.-based startup focused on chronic autoimmune diseases, has raised $80m co-led by Norwest Venture Partners and Viking Global Investors. The company also secured a $65m credit facility led by Runway Growth Capital. https://axios.link/3D1ApjE

Inflow, a London-based developer of an ADHD self-management app, has raised $11m in Series A funds led by Octopus Ventures with support from insiders Hoxton Ventures and Route66 Ventures. https://axios.link/3D1mCcH 

3. Deals o' the day

Inflow named Octopus Ventures' partner Will Gibbs to its board.

4. It's Personnel

Fertility tech dominated this week's coverage, with two exclusives on fundraises as money continues to flow into the $21-billion-plus sector. 

Why it matters: Two companies, Posterity and Sunfish, focus on underserved pockets of an increasingly bustling market.

Hearing chatter on other players in the space, or spot a trend you think is underreported? Write to us.

Jan. 17 — The case against CVS buying Oak Street and an 👀 exclusive on Posterity's second seed. Read the newsletter

Jan. 18 — 👀 Exclusive: Sunfish seed round; ChatGPT M.D., and Biofourmis eyes becoming a care provider. Read the newsletter

Jan. 19 — 👀 👀 Double exclusive: Knownwell launches obesity-focused primary care and Rx Redefined banks its Series A. Read the newsletter 

5. Catch up quick

Illustration of a red cross being torn in half.

Happy Friday, Health Techies. We made it. 

🙇‍♀️ Claire took second place in "The Office"-themed trivia this week but eschewed the shots offered as a prize.

🙏 Thanks for reading, and extra thanks to newsletter editor George Moriarty and copy editor Brad Bonhall. Please ask your friends and colleagues to sign up.

January 20, 2023

🎲 1 big thing: The case for a "hope index"