All Access

Health Tech Deals

Standard

Health Tech Deals Thought Bubble

Thought Bubble

Health Tech Deals Alerts

Alert

mustard

BFD Expert Voices - Health Tech Deals

BFD Expert Voices

Toothio, a Scottsdale, Ariz.-based dental staffing tech company, raised a $4 million seed, CEO Ian Prendergast tells Aaron exclusively.

Why it matters: As staffing shortages loom large in health care, dentistry vacancies have reduced dental practice capacity by about 10% nationally, according to the American Dental Association..

Details: The round was led by Craft Ventures, with participation from Burst Capital, Moving Capital, Revere Partners and Rho Capital Partners.

This round follows an initial backing of $300,000 from AZ Crown, founders of Insight Enterprises.

How it works: Founded last year, Toothio provides on-demand access to hygienists and assistants, connecting professionals with dental practices.

The platform's algorithm tracks data points like clocking in and out, ratings from dental offices, and shift acceptance rate — then computes a score with a two-way rating system.

Using that score, the platform identifies providers who qualify for a certain shift and sends out invites based on geolocation.

Flashback: Prendergast says he was prepared for a lengthy and intensive fundraising process, "and to get hammered on valuation" — but that's not what happened.

"It took us three-and-a-half months from start to finish and [we] ended up with a great mix of investors," he adds.

He declined to disclose Toothio's post-money valuation.

What's next:  The funding has a full 18 months of runway, though Toothio will "have to walk a fine line between how much capital to put to work to show growth into the next year," Prendergast says.

Toothio will use proceeds to expand into key U.S. markets like Chicago and Orlando, Florida, as well as Atlanta, Los Angeles and New York City.

Yes, but: "We can't scale too fast," says Prendergast. "That is how some companies die. So we need to be diligent about which markets to go into first, so that we provide the best experience possible for everyone involved."

What they're saying: "The consistent feedback from independent dentists and DSOs alike is that keeping the office staffed is the number one challenge," says Craft Ventures partner Jeff Fluhr.

The clear market need and Prendergast's career history — he was previously an executive at labor marketplaces Steady Install and Qwick — attracted Fluhr to the investment, he says.

Between the lines: While traditional staffing models rely on emails and phone communication to fill shifts, Toothio differentiates itself by offering software with mobile and desktop interfaces, Fluhr says.

Plus, the shift of preference for flexibility in work schedules is a fundamental trend not likely to end soon, he adds.

"Toothio's marketplace is perfectly suited to address this," he said. "More workers want to work flexible shifts and have the opportunity for more free time. Toothio helps dental professionals do exactly that."

1 big thing: Toothio polishes off $4M to expand

Illustration of a toothbrush with dollar bills as bristles.

After dismal Q2 earnings, Cano Health (NYSE: CANO) is working with JPMorgan and Oppenheimer as it pursues strategic alternatives, sources familiar with the situation tell Axios' Claire Rychlewski.

Why it's the BFD: A vestige of 2021's SPAC bonanza, Cano is a cautionary tale.

Catch up quick: Last week, Cano announced plans to "identify and evaluate interest in a sale of the company, or all or substantially all of its assets."

The primary care company has been under pressure from activists Third Point (which subsequently sold its stake in December 2022) and Owl Creek Asset Management to explore exit options for the last year.

What's happening: JPMorgan is advising Cano on a potential sale of the whole company, while Oppenheimer is advising on possible divestitures or breakups of the business, the sources say.

Cano announced plans to exit operations in California, New Mexico and Illinois by the fall of 2023, and intends to exit its Puerto Rico operations by January 2024.

Potential assets to sell off include Cano's Medicaid business in Florida (the company made a $300 million acquisition to buoy it last year), as well as its Puerto Rico asset, one source notes.

By the numbers: Cano reported a net loss of about $270 million this quarter, compared with a net loss of $14.6 million the prior year — partly attributable to higher third-party medical costs, the company said.

As of Aug. 9, Cano had about $101 million in cash and cash equivalents, which it said is not enough to cover operating, investing and financing uses for the next 12 months.

The company took out a $150 million term loan in March from Diameter Capital Partners, Rubicon Founders and their respective affiliates and funds.

Flashback: Private equity spent a lot of time with Cano before it went public via a $4.4 billion SPAC deal with Jaws Acquisition Corp in 2021.

At that time, Cano saw its stock price hover around $13 per share. The company has since seen its stock erode considerably, trading at 51 cents a share as of this morning.

CEO Marlow Hernandez stepped down from his post in June after mounting pressure from shareholders.

The big picture: A spate of primary care businesses made public market debuts in the last few years — but increasing strategic interest in owning doctors' offices and rocky public markets have prompted consolidation.

Amazon acquired One Medical for about $4 billion, while CVS Health took Oak Street Health for more than $10 billion.

"I anticipate that'll be a sector that's still going to see more acquisitions," says Kevin Eisele, co-head of equity capital markets for health care at William Blair.

"From the private equity channel there's a lot of interest, given where a lot of these assets are currently trading," he adds.

JPMorgan declined to comment. Oppenheimer and Cano did not respond to a request for comment.

2. The BFD: JPMorgan and Oppenheimer advising Cano Health

Illustration of price tag stickers in the shape of a health plus.

Looking for a deal story? Search the Axios Pro Deals Tracker beta.

•  Lindus Health, a British developer of clinical trial tools, raised $18m in Series A funding led by Creandum with support from Peter Thiel and insiders Firstminute, Seedcamp, Hambro Perks and Amino Collective. https://axios.link/3DZ7zjZ

• Coalesce Capital partnered with Freedom 3 Capital to recapitalize Examinetics, an Overland Park, Kansas-based provider of occupational health compliance testing services. www.examinetics.com

3. Deals o' the day

• Christopher Betz left a role as senior director of software engineering at Brightside Health to become CTO of AptiHealth. www.aptihealth.com

• Meg Barron left a post as VP of digital health innovations at the American Medical Association to become managing director of engagement at the Peterson Health Technology Institute. www.phti.com

• Peter Scherr left a post as chief marketing officer at Pagaya to take the same role at Incredible Health. www.incrediblehealth.com

• Kelli Walton left a post as director of people at Balto to become senior people operations manager at Particle Health. www.particlehealth.com

• Keith Clements left a post as VP of sales at Young Innovations to become chief commercial officer at Toothio. https://axios.link/3OY85F9 

• Mike Peluso was promoted from CTO to chief product and strategy officer at Rectangle Health. https://axios.link/3OD3FlF 

4. It's Personnel

🩺 The hidden fee costing doctors millions every year — ProPublica

🧠 Hoping to avoid Pear's fate, DTx companies look to employers — Behavioral Health Business

5. Your daily dose

Illustration of a pill capsule as the bell hammer on an alarm clock.

🖖🏽 Erin watched the season finale of "Star Trek: Strange New Worlds" on Paramount+ and is excited for the next season.

🌟 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.

August 16, 2023

1 big thing: Toothio polishes off $4M to expand