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BFD Expert Voices - Health Tech Deals

BFD Expert Voices

New York-based fertility planning startup Bunnii shut down this week after failing to secure funding, CEO Meredith Brunette tells Erin.

Why it matters: Bunnii's demise is reflective of the challenges facing the nascent women's health tech sector, where funding could see a bust before it had a chance to boom.

Details: After securing a lead investor and verbal offer for the first round of $1 million in January 2023 — just three months after they'd started raising — Brunette and her co-founders failed to secure the follow-on funding they needed to close the round, she says.

They made the difficult decision to shut down and fully refund their investors, she adds.

While Bunnii's lead investor was willing to commit the majority of the funding — $750,000 — they wouldn't wire the money until Brunette had secured the remaining $250,000.

In late March or early April, they finalized and signed term sheets.

"At that point, we'd talked to around 50 people, so I was pretty confident we'd get the $250,000," Brunette says, "and we just couldn't."

Zoom in: The bulk of investors Bunnii courted were at women's health-specific funds, where Brunette says, "The bar is just so high."

"The feedback we were getting was that the companies needed to be further developed for them to be interested," says Brunette.

When Brunette told their lead investor what was happening, the backer pulled the signed term sheets. "That was kind of our huge blow," she says.

"There were just too many headwinds, so we decided it was better to give the money back to our investors rather than facing a slow death," Brunette adds.

Meanwhile, women's birth control startup SimpleHealth was forced to sell assets to Twentyeight Health after failing to raise the money it needed to continue operations, former CEO Carrie SiuButt tells Axios.

"We tried to raise money and we secured a bridge [loan], but when you have a lot of patients, it takes a lot more than a bridge," SiuButt says.

"The receding tide of women's health investment is making me super sad," adds SiuButt.

What they're saying: "Being a female founder and being in women's health tech has been interesting because juxtaposing this to some of the experiences of my male colleagues or people in other parts of tech, it's been a very different experience," says Brunette.

"It’s frustrating because you talk to all these people who want to make a better experience for women and women founders, but they’re all later-stage," she adds.

By the numbers: Funding for the health tech sector writ large is on track to see its lowest levels of investment since 2019, per a recent Rock Health report.

Women's health — which has never accounted for more than single-digit figures within the sector — may be getting hit the hardest.

"The truth remains that the founder-friendly market of 2021 and early 2022 has tilted sharply toward investors," the authors of the report write.

Companies that specifically address women’s needs make up just 5% of all digital health funding since 2011, a previous Rock Health report concluded.

1 big thing: Fertility journey startup Bunnii shutters

Illustration of two pregnancy tests forming an "X".

General Electric plans to sell a roughly $2 billion stake in GE HealthCare Technologies, about 28 million shares, in a debt-for-equity exchange, according to a regulatory filing.

Why it's the BFD: The sale represents the latest step in the unwinding of GE and medical technology company GE HealthCare, Aaron writes.

Details: Under the agreement, the debt-for-equity exchange is expected to swap 28.75 million GE HealthCare shares for debt held by affiliates of Morgan Stanley, according to a Reuters report.

‍Evercore ISI, Morgan Stanley, BofA Securities, Citigroup and Goldman Sachs are joint lead book-runners for the offering.

GE stock was down 0.86%, while GEHC rose 0.22% on Tuesday morning from where it closed on Monday.

GE did not respond to a request for comment.

Flashback: After spinning out from GE, GE Healthcare in January acquired French CT guidance developer Imactis.

The company followed that deal with an acquisition of AI-guided heart ultrasound company Caption Health in February.

2. The BFD: GE to sell $2B stake in GE Health Care Technologies

Illustration of George Washington peeking out from behind a red cross.

• Ahara, a Los Angeles-based nutrition company, raised $10.25m led by Greycroft Partners. https://www.ahara.com/

• Grapefruit Health, a Chicago-based remote patient monitoring startup, raised $1.3m. https://axios.link/3NbrKj1

• Avista Capital Partners-backed Solmetex, a Northborough, Mass.-based provider of dental waterline products and dental solutions acquired Impladent Ltd., a provider of a broad range of regenerative materials including bone grafts and resorbable membranes used in tooth extraction procedures. https://axios.link/3J0l4CW 

A&M Capital Partners-backed Med-Metrix, a Parsippany, New Jersey-based provider of technology-enabled, revenue cycle management acquired Tritech Healthcare Management, a Melville, New York-based billing and claims company. https://axios.link/3MQM5de

• Symrise of Germany offered to buy Swedencare, a Stockholm-listed pet health care firm in which Symrise recently acquired nearly a 30% stake, at around a $544m enterprise value (11% discount to recent trades). https://axios.link/3qraz5g

3. Deals o' the day

• Suraj Tolani left Moelis & Co. to join JPMorgan Chase as a managing director focused on midmarket health care services companies.

• Mina Aghareza left Carrum Health to join Transcarent as director of employer solutions, West.

• Emily Hulthen was promoted to director of health plan solutions from senior account manager at Ovia Health. 

• Candice Morgan, partner at GV, and Ellie Wheeler, partner at Greycroft were named directors of the board at Venture Forward.

4. It's Personnel 

🖥️ Black men were likely underdiagnosed with lung problems because of bias in software — AP 

🍄 A long, strange trip for the "Uber for Nurses" — The Information

🥕 New fund for food-insecure Americans — Axios

5. Your daily dose

Illustration of a weekly pill dispenser box with a newspaper called "daily dose" in each compartment.

 🥩🍝 Aaron is still not tired of Italian cuisine after nine days of pasta making/eating, truffle hunting with a dog, and (three) Florentine steaks. 

🙌🏻 Thanks for reading, and extra thanks to newsletter editor Claire Rychlewski and copy editor Mickey Meece. Please ask your colleagues, friends and family to sign up.

June 06, 2023

1 big thing: Fertility journey startup Bunnii shutters