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BFD Expert Voices - Health Tech Deals

BFD Expert Voices

SVB Financial Group has agreed to sell its health- and tech-focused investment banking division, SVB Securities, to a group led by Jeff Leerink and backed by funds managed by The Baupost Group, the company announced over the weekend.

Why it matters: SVB Securities had been the last major fiefdom of the collapsed Silicon Valley Bank kingdom to remain unsold after HSBC bought the U.K. business and First Citizens bought the venture banking flagship and private banking units, our colleagues Dan Primack and Kia Kokalitcheva report.

After founding the bank in 1995, Leerink remained the division's CEO at SVB.

Once independent, the health care-focused firm will reassume the name Leerink Partners, which is what it was called before selling to SVB in 2018.

Details: The group will acquire the health and tech investing business for a combination of cash, repayment of an inter-company note, and a 5% equity instrument.

MoffettNathanson, a sell-side research business that SVB had acquired to be part of its investment banking unit, will not be part of the deal.

The buying group will pay around $55 million in cash, repay $26 million in debt and provide a conditional equity instrument to SVB Financial.

What's next: A court hearing regarding the proposed deal is scheduled for June 29.

What we're watching: Any health care auctions hanging in the balance with an SVB mandate on them (Zest Dental comes to mind).

Go deeper: Catch up on Axios' coverage of SVB.

1 big thing: Meet the new (old) Leerink Partners

Illustration of the Silicon Valley Bank logo with a price tag.

Caraway raised a $16.75 million Series A to expand access to medication abortion and broaden its focus from women to all members of Gen Z, CEO Lori Evans Bernstein tells Erin exclusively.

Why it's the BFD: The raise comes as young people embrace gender diversity while facing reduced access to reproductive support — and reflects continued VC appetite for reproductive health, even as some of the sector's earliest startups flounder.

Details: Maveron and GV led the round, which comes nearly one year after the Supreme Court ended the constitutional right to abortion.

Previous backers 7wireVentures and Hopelab Ventures also participated and were joined by new backers Wellington Partners, Ingeborg Investments and The Venture Collective.

Funds will also fuel the company's expansion into six additional states —  Colorado, Pennsylvania, Illinois, Massachusetts, Michigan and New Jersey. The company is already in California, New York, North Carolina and Ohio.

"Having access to abortion is life-saving," says Evans Bernstein. "It's a major health and human rights issue, and we could not be more excited to add it to our repertoire."

Evans Bernstein says she foresees Caraway raising again in 24 months.

How it works: With a broadened focus on young people aged 18-29, Caraway uses a team-based approach to offer virtual mental, reproductive and physical care.

New offerings include medication abortion — pre-Dobbs, patients were referred to other providers for abortion care.

Additionally, Caraway is offering estrogen-based gender-affirming hormone therapy.

The company isn't yet prescribing testosterone because of federal restrictions, but Evans Bernstein says the company can help coordinate patient referrals to local providers of the medication.

Plus, Caraway recently boosted the profile of its youth advisory team, which now includes roughly 100 women who help inform Caraway's offerings.

What they're saying: Advikaa Anand, a member of the advisory group and a sophomore at Duke University, says of the group: "We all agree on the fundamentals: We should have access to birth control. We should have access to abortion."

Anand heard about Caraway after an op-ed she wrote for the Duke Chronicle about medical gaslighting caught the attention of Caraway's director of engagement, Olivia Coletta, who reached out.

Anand, who hails from Mississippi, describes the group as a "network of solid young women across the country who have your back and are passionate."

Zoom in: Caraway's decision to expand its services was guided by its users and youth advisory team, says Evans Bernstein.

Including male-identifying people in its advisory meetings will be a decision for the team. "They wanted to be an inclusive space. They’ll decide what that means for them."

When asked what impact adding male-identifying individuals to the group might have,

Anand acknowledged the possibility that adding male-identifying individuals to the group might hamper conversation about gender bias.

However, she adds, "I'm sure the people who Caraway would bring on board would be attuned to these messages of gender biases and interested in bridging the gap."

Between the lines: "All our female members have led us to say, please talk about Caraway as an inclusive platform," says Evans Bernstein. "We know we as women need more services, but let's have an inclusive message."

Maveron partner Anarghya Vardhana says broadening Caraway's focus to all genders also makes good business sense.

"As Caraway signs on payers, we know it's important for them to understand the solution is comprehensive," Vardhana says.

Flashback: Caraway collected $10.5 million in seed funds on the one-month anniversary of the Dobbs decision.

At the time, the company was focused exclusively on young, college-enrolled women aged 18-27 and did not offer medication abortions or gender-affirming hormone therapy.

2. The BFD: Caraway raises $17M for tele-abortion and inclusive care

an illustration of a hand holding a cell phone surrounded by health pluses and cutouts of money 

Despite tough macroeconomic conditions and an industry-wide plummet in funding for digital health, deals continue to enliven the venture-backed women's health sector.  

Virtual-first care provider Thirty Madison in June acquired assets from birth control startup The Pill Club for $32.3 million.

Tech-enabled fertility clinic operator and employer benefits provider Kindbody in March raised $100 million at a $1.8 billion valuation.

Virtual maternal and infant health medical practice Pomelo Care this summer raised $8 million in seed funding and $25 million in Series A capital.

Intrinsic, a women's retail health and personal care products company, in May collected $15 million.

State of play: Women's health investment 

Illustration of a file foldler with a note that says "State of Play" paper clipped to it.

• Octave, an SF-based hybrid behavioral health company, raised $52m in Series C funding led by Cigna Ventures, Novo Holdings and Avidity Partners and joined by insiders Health Velocity Capital, Greycroft Partners, Felicis Ventures, Company Ventures and Obvious Ventures. https://findoctave.com/ 

• EvolvedMD, a Scottsdale, Ariz.-based provider of primary care collaborative care management services, raised $14m in Series A funding led by Conductive Ventures with support from FCA Venture Partners, Healthworx, Tectonic Ventures and Waterline Ventures. https://axios.link/3PdDsfq 

• RiverGlade Capital-backed Dynamic Access acquired I.V. Nurse Consultants, a Seattle-based provider of vascular access specialists. https://axios.link/3Xa4mGU

• InTandem Capital-backed Vivo Infusion, a Denver-based ambulatory infusion service provider acquired Specialty Infusion, an Brooklyn, based- ambulatory infusion and specialty pharmacy. https://vivoinfusion.com/

3. Deals o' the day

• Jonathan Simon left a post as CTO of Brightline to join Hopper Health as its first CTO.

• Nikia Bergan left a post as president of GetWellNetwork to become the first president of Equip.

• Andy Page, the former president of 23andMe, Everlywell and Livongo, and the former CEO of Caption Health, started a new position as CEO of Bering Health.

• Neha Chaudhary, a child and adolescent psychiatrist at Massachusetts General Hospital, became chief medical officer of Modern Health.

 • Ashutosh Agte was promoted from SVP of engineering to CTO of Artera.

• Jack Crotty became director of business development at Adyptation.

• Eric Van Horn, a former chief growth officer at Optum, became an adviser to Strive Health.

• Amanda Rankin, the COO of Trilogy, joined Eleos’ customer advisory board.

• John Redett will become CFO of Carlyle Group effective Oct. 1, succeeding retiring CFO Curt Buser.

4. It's Personnel

🤖 Chatbots could help provide therapy, but caution is needed — Scientific American

🍄 Magic Mushrooms, $1 hearing aids: Medical marvels disrupting health care — Newsweek

📋 When AI overrules the nurses caring for you — WSJ

⚕️ Oracle lays off hundreds of Cerner employees — Insider 

5. Your daily dose

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

🥂 Situational awareness: Join Axios Pro Deals and Dan Primack for an exclusive happy hour event happening in Boston on Tuesday, June 27! Register.

 🛶 Erin spent the weekend stand-up paddle-boarding in windy conditions on two different lakes and only froze one out of three days.

♥️ 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 20, 2023

1 big thing: Meet the new (old) Leerink Partners