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BFD Expert Voices - Health Tech Deals

BFD Expert Voices

Mighty Health wants to keep seniors healthy and connected through proprietary coaching and exercise programs. 

Why it matters: Mighty raised $7.6 million in a second seed round co-led by Will Ventures and GFT Ventures, CEO James Li tells Erin exclusively. 

AARP, Mercury CEO Immad Akhund, Hyper, Baselayer Ventures and Z Venture Capital joined the round.

The San Francisco-based company will use the capital to expand its strategic partnerships and launch chronic disease programs.

How it works: Mighty partners with commercial health plans including Medicare Advantage to offer adults over age 50 a free daily health program that includes low-impact workouts, custom nutrition plans and text-based health coaching.

"We help those partners fill a gap where most of their gyms and fitness solutions are oriented towards a younger population," Li says.

Other Mighty partners include Gympass and Forma, who offer the service free of charge to their employees.

All of Mighty's coaches are employees who are board-certified and trained in the company's methodology.

GFT Ventures managing partner Jay Eum called the approach "a breath of fresh air" for older adults looking for an alternative to traditional gym programs or weight loss apps.

Of note: A Mighty-sponsored preprint study in JMIR found that out of 166 participants, 89% endorsed feeling healthier since starting the program, and 78% reported mobility improvement. 

Participants also lost an average of 11 pounds, and chronic disease participants reported positive outcomes such as lower A1C levels and improved blood pressure.

By the numbers: The company has served 200,000 customers to date.

Li says most of its customers are women and that many come from rural areas with little or no access to high-speed internet.

State of play: The meteoric rise of Medicare Advantage plans and an aging elder population have made tools like those offered by Mighty increasingly popular. But while most competitors offer help navigating existing benefits, Mighty offers its own coaching and exercise tools.

Medicare navigation startup Spark Advisors this week got $15 million in Series A capital.

Senior insurance navigator Fair Square Medicare in August garnered $15 million in Series A funding.

Soda Health, a company focused on the Medicare Advantage and Medicaid markets, in September collected $25 million in Series A funds.

The backstory: Li started Mighty after his father struggled to find appropriate health guidance after having emergency open-heart surgery. 

"My dad relied on me as a kind of ad-hoc health coach, asking me things like 'Am I allowed to do this? What should I be eating?'" Li says.

1 big thing: Mighty Health seeds $7.6M

Angle Health's $58 million Series A round will get the tech-enabled insurance carrier to profitability, CEO Ty Wang tells Claire.

Why it's the BFD: Unit economics — like a path to breakeven — are becoming increasingly significant for early-stage health tech companies and their investors. 

How it works: Angle is a full-stack health insurance carrier delivering customized healthcare benefits tailored to small to midsize businesses. 

Along with providing benefits, the company offers care navigation to help members access behavioral health, telehealth and disease management services.

The company counts NFP, Gallagher, GBS/Leavitt, Aon and Hub among its customers.

Angle partners with Cigna to give its members access to a national network of health care providers, Wang says. 

Details: Angle generates "tens of millions" in revenue, Wang says, declining to be more specific. 

The round was led by Portage, with participation from PruVen Capital, Wing Venture Capital, SixThirty Ventures, Mighty Capital, Wormhole Capital, Mindset Ventures, Aloft VC, and Pilot founder Waseem Daher.

The Series A was raised in two tranches, Wang tells Axios. Angle raised $21 million in equity and $10 million in debt over the summer before Portage came in to lead another $27 million infusion, he says. 

Existing investors Blumberg Capital, Correlation Ventures, TSVC and Y Combinator participated. 

Of note: Publicly traded "insurtechs" like Oscar Health, Bright Health Group and Clover Health — most of which operate in the direct-to-consumer health insurance market and are thus not directly competing with Angle — have pruned their market presence in a bid to reach profitability.

What they're saying: Angle's customization differentiates it from other market players, Wang says.

Small and medium-sized businesses "are generally limited to 'off the shelf' plans, which can make transitions confusing for their employees and disrupt existing access to care," Wang says. 

"We can customize these health plan packages for the employer based on their needs," he says, noting that 80% of Angle's health plans are tailored.

Between the lines: Portage has a long history of investing in the insurance sector generally, but Angle is its first North American health care play.

"Our LP base includes quite a few insurance companies that have strong  relationship networks within the health care and health insurance space," says Portage partner Ricky Lai. 

The intrigue: Angle sees itself as an eventual provider of care, much like its larger payor peers (cough, Optum), Wang says.

"We primarily provide the connectivity and the coordination around these benefits, whether they're administrative or clinical," Wang says. "There's definitely an opportunity and a potential play there for also being the providers ourselves and delivering the actual medical care."

State of play: Alongside major commercial insurance carriers, independent third-party administrators like Collective Health and Flume also serve the employer-based benefits market.

Last year, Flume Health raised $30 million in Series A funding at a valuation of $100 million, while Collective Health in 2021 collected $280 million in Series F financing at a $1.5 billion valuation.

TPAs like these typically serve large companies (500 to 1,000-plus staff) that have the resources to internally design and offer customized health plans — and neither take on full risk, Wang says. 

"Even third-party administrative services, there are start-up health plans that do just that, but they don't do the underwriting or they don't take on the risk," says Angle co-founder Anirban Gangopadhyay. 

2. The BFD: Angle Health raises $58M 

Illustrated collage of a hundred dollar bill with a red cross and various shapes

Parable, an Atlanta-based maker of nutritional supplements for brain health, has raised $2.75m in seed funding co-led by M13 and Break Trail Ventures. https://axios.link/3DcTzD5

Oneleaf, a Paris-based self-hypnosis startup, has raised $5.1m. VC First led and was joined by Kima Ventures and Raise Ventures. www.oneleafhealth.com

Precision Neuroscience, a New York-based brain–computer interface startup, has raised $41m in Series B funding from Forepont Capital Partners, Mubadala Capital, Draper Associates, Alumni Ventures, re.Mind Capital and insiders Steadview Capital and B Capital Group. https://axios.link/3WDlQcM

MedCrypt, a cybersecurity solution provider for medical device manufacturers, has taken an undisclosed amount of Series B extension funds from Dexcom Ventures. https://axios.link/3Janakx

Radon Medical Imaging, a Moneta, Va.-based portfolio company of 5th Century Partners, has acquired Premier, a Rome, Ga.-based provider of maintenance services and sales for imaging and biomedical equipment. www.radonmedicalimaging.com

Havencrest Capital Management-backed Apara Autism Center has acquired Autism Learning Collaborative and Early Autism Services. https://aparaautism.com/

3. Deals o' the day

ShiftKey named four new executives to its leadership team: former Figs CFO Jeffrey Lawrence is CFO, former Figs chief digital officer Ryan Bonifacino is chief marketing officer, former Datasite CPO Thomas Fredell is CPO and former TheKey CFO Brian Scott is CSO.

AstraZeneca named Massachusetts Medical Society chair Jennifer Joe global medical director.

Leidos (NYSE: LDOS) named former ManTech International SVP Srini Iyer CTO of its health group.

ConnectiveRx re-named board chair and former CEO Harry Totonis CEO. Jim Corrigan stepped down from the CEO role.

4. It's Personnel

👩‍⚕️ Situational awareness: More health providers are charging patients for responses to emailed queries, raising thorny questions about reimbursement, Axios Vitals reports.

🏃🏻 Erin hit the slopes for some afternoon skiing yesterday and snuck in the equivalent of a marathon, at least in miles.

✅ 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 25, 2023

1 big thing: Mighty Health seeds $7.6M