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

The former CEO of buzzy beauty subscription service Birchbox is demanding $2 million from parent company FemTec Health and its founder, per a letter viewed by Erin.

Why it matters: Former CEO Katia Beauchamp's letter accuses FemTec of failing to pay her what she says she was owed following FemTec's $45 million acquisition of Birchbox in 2021 — and she's not the first leader of a FemTec subsidiary to seek financial recourse from the company.

Details: In a letter dated Thursday, a law firm representing Beauchamp alleges that FemTec Health and its founder, Kimon Angelides, failed to pay Beauchamp the nearly $2.1 million she is allegedly owed from FemTec's July 2021 acquisition of Birchbox. The letter reads, in part:

"FemTec and [Kimon Angelides] have failed to pay Ms. Beauchamp $2,092,000.00 due to her pursuant to the July 21, 2021, Share Purchase Agreement between FemTec and Birchbox, Inc."

"FemTec, as the 'Purchaser' of Birchbox, was obligated to pay this money to Ms. Beauchamp by October 21, 2022. FemTec’s failure to pay monies due to Ms. Beauchamp is a bad faith material breach of the Share Purchase Agreement."

"On behalf of Ms. Beauchamp, we demand that FemTec pay $2,092,000.00 to Ms. Beauchamp within 14 days of the receipt of this letter."

Axios reached out to Beauchamp, Angelides and FemTec Health for comment and did not immediately hear back.

Catch up quick: Axios' previous reporting covered allegations that Angelides misrepresented FemTec's financial and operational status.

FemTec in 2021 raised $38 million and acquired startups, including Birchbox, FDA-cleared fertility tracking company Ava Women, Mira Beauty and social networking company Liquid Grids.

Birchbox in 2014 had a valuation of $485 million, but experienced layoffs and a dwindling customer base before selling to FemTec in 2021 for a fraction of that valuation, per Business Insider.

Birchbox was reportedly considering filing for bankruptcy in November and posted a statement on Instagram acknowledging "unprecedented setbacks" the same month.

Meanwhile, former leaders of Zurich-based subsidiary Ava Sciences-FMTC GmbH filed with Swiss regulators to recoup allegedly unpaid wages, Axios reported in January.

Zoom in: Thursday's letter also alleges that FemTec and Angelides operated "in bad faith" by failing to communicate to Beauchamp at the time of the alleged payment deadline and sending "misleading information to Birchbox's creditors and investors."

"Despite the clear obligations to pay Ms. Beauchamp, the October 21, 2022 deadline came and went without any justification for FemTec’s failure to abide by the clear provisions of the Sales Purchase Agreement," it reads.

"In a letter dated October 31, 2022, You claimed the need to offer creditors/investors the ability to buy preferred stock in FemTec to avoid placing Birchbox into bankruptcy," the letter says.

What some customers are saying: In complaints posted to Birchbox's public Facebook page from fall 2021 to winter 2023, several people allege they were charged for subscription boxes they did not receive and say the company had not responded to complaints sent by email.

"Birchbox used to be a great company until they changed the format," Julie Ann Goebel wrote in December 2022. "Now my October box has been lost for 2 months, I've yet to receive emails, boxes, just absolute silence."

"Seeing as it's January and my last couple of emails about the October box debacle have gone unanswered, I'm just gonna assume I'm out that money," Carolyn Kanon wrote in January 2023. "I don't know why BB sold themselves to this other company, but it looks like that decision has sunk it. Nothing has been right about it since then."

"Absolutely unacceptable," Julie Cryer wrote in February 2023. "I have the same story as so many others. I received a 3 month gift subscription and only received 2 boxes. I have been trying to resolve the issue since Aug. 2022."

1. Former Birchbox CEO demands $2M from FemTec Health

Illustration of a collage of FemTec Health's logo, money, medical diagrams and anonymous women.

Illustration: Shoshana Gordon/Axios. Logo: FemTec Health

Smartphone-based kidney and wound testing company Healthy.io raised $50 million in Series D capital, CEO Yonatan Adiri told Erin exclusively Wednesday.

Why it matters: Adiri foresees a likely IPO for the company after reaching profitability in about 18 months, pending market conditions.

Plus: Wednesday's Pro Rata, on PE's AI experimentation.

2. Healthy.io raises $50M Series D

Illustration of a phone wearing a doctor's coat and a stethoscope. 

ODAIA, a life science commercialization technology company, netted $25 million in Series B funds to convert its customer pipeline, CEO Philip Poulidis told Aaron exclusively Monday.

Why it matters: Amid an increasing frequency of down-rounds in health tech investment, ODAIA had an outsider-led up-round and says it will be cash-flow positive within the next year.

Plus: Monday's Pro Rata, chronicling the aftermath of Dominion's lawsuit.

3. ODAIA nets $25M

Illustration of stacks of money with a strap that travels upward and forms an upward pointing arrow

Surgical Safety Technologies, maker of a "black box" for operating room data, raised $15 million in Series A funds, founder Teodor Grantcharov told Axios' Claire Rychlewski exclusively Thursday.

Why it matters: The capital suggests health systems are spending more on tech tools that promise to save on costs and boost efficiency, particularly as hospital budgets are cut.

Plus: Thursday's Pro Rata, on banking uncertainty.

4. Surgical Safety's $15M Series A

Illustration of a security camera with a red cross over the lens.

As the med-tech market livens up, the new Patient Square platform Elevage Medical Technologies has $300 million to scoop up earlier-stage businesses, says Patient Square managing partner Jim Momtazee.

Why it matters: The fall of Silicon Valley Bank has widened the funding chasm for early-stage health tech and med-tech companies, leaving more room for players like Elevage, Aaron wrote Tuesday.

Plus: Tuesday's Pro Rata, on a dealmaker standstill.

5. Elevage Medical's med-tech pipeline

Illustration of a doctor's bag with stethoscope featuring a computer mouse at the end

💙 Thanks for reading, and extra thanks to copy editor Brad Bonhall. Please ask your colleagues, friends and family to sign up.

May 05, 2023

1. Former Birchbox CEO demands $2M from FemTec Health