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BFD Expert Voices - Health Tech Deals

BFD Expert Voices

Small Door Vet is working with Lincoln International on strategic options, including a possible sale, two sources familiar with the situation tell Axios' Claire Rychlewski.

Why it matters: Auctions for traditional vet platforms stalled out last year, but investors see promise in Small Door's strategy, one source says.

How it works: Small Door is a membership-based, tech-enabled veterinary chain, aiming to help customers and their pets get seen more quickly than they might at a traditional vet.

Small Door provides in-person routine and emergency animal care, as well as 24-hour telemedicine care via a mobile app.

Memberships cost $169 per pet, per year, according to the company's website.

The company has 12 clinics in New York, Washington D.C., and Boston — up from five last year.

What's happening: Small Door is having management meetings with prospective buyers ahead of collecting first-round bids, the sources say.

The New York-based company, which is not yet profitable, is being marketed on $70 million in pro-forma revenue.

Small Door could look at General Atlantic's acquisition of GoodVets as a possible comparable, the sources say. One source notes that deal yielded a $300 million price tag. (General Atlantic declined to comment.)

Catch up fast: Small Door raised a $40 million Series B last year, led by the chief investment officer of an unidentified publicly traded private equity firm.

C&S Family Capital and FS Investors also participated, alongside existing investors Toba Capital, Lerer Hippeau Ventures, Primary Venture Partners and TriplePoint Capital.

Small Door has grown solely through de novo clinic openings. CEO Josh Guttman told Axios last December the business was generating $10 million-plus in annual revenue, with five clinics open.

State of play: Tech-enabled veterinary companies have drawn significant investor interest in recent months, as pet owners look for more efficient care.

Digitail, a Romanian pet tech platform, raised $11 million in Series A funding in January.

Felix&Fido, a membership-based veterinary company, raised $4 million in pre-seed funding in March.

Pet telehealth company Airvet raised $18.2 million in Series B funding.

Go deeper for a full state of play on the pet economy.

Small Door Vet and Lincoln did not return requests for comment. 

Editor's note: The headline has been clarified to reflect that Small Door is working to raise financing, but not exclusively pursuing a sale.

1 big thing: Small Door Vet open to deal

Illustration of a pet carrier overflowing with money. 

Harbinger Health, a Cambridge, Massachusetts-based company focused on helping detect cancer early, raised $140 million in Series B funding. 

Why it's the BFD: Certain cancers will likely rise exponentially due to COVID-19 screening delays — and cancer is often detected in later stages, seriously decreasing the ability to beat it, Aaron writes.

Details: Flagship Pioneering led the round, with participation from Pictet, Partners Investment and Catalyst, M&G Investments' purpose-led private assets strategy.

The intrigue: CEO Stephen Hahn tells Aaron that Harbinger "might be back in the market for a Series C next year, depending on data and results we get back — or it could be an  IPO, as we are continuing to talk to investors and bankers in the space about our options."

How it works: Leveraging machine learning and data on the molecular biology of cancer's origins, Harbinger's platform aims to identify cancer before it is visible or symptomatic.

Harbinger uses a proprietary two-tier model in a bid to reduce the burden of false positives and avoid unnecessary follow-up procedures.

Its first test is low-cost, with a high negative predictive value (NPV), meaning if you get a negative result, the patient and provider can be very confident there is no cancer.

Similar to a mammogram, a positive result on the first test indicates the possibility of cancer, but not conclusively.

"At that point, the patient would go on to receive the second test that has high positive predictive value (PPV), which is much more specific and can tell a doctor where to look for cancer," Hahn says.

"In theory, the second test will return an answer that says yes or no about the presence of cancer and provide tissue of origin."

What's next: Harbinger hopes to launch its first product — a laboratory-developed test (LDT) for the detection of early cancer —  in 2025.

Fresh funds will go toward the company's 10,000-participant clinical study of its novel blood-based cancer screening platform.

"We want to invest in the platform,  get clinical validation, and then get into the commercialization process,"  he says.

Catch up quick: Harbinger has raised approximately $190 million in total funding since its formation in 2020.

2. The BFD: Harbinger Health's $140M Series B

Illustration of hundred dollar bills and coins arranged in the shape of a cancer ribbon.

Want more health tech deals? Check out the Axios Pro Deals Tracker beta.

• Partum Health, a Chicago-based pregnancy and postpartum support startup, raised $3.1m in seed funding led by True Wealth Ventures and joined by Magic Fund, The Fund Midwest, Tawani Ventures, Bridge Ventures and Pioneer Healthcare Partners. https://axios.link/3EUA4j9

• Midi Health, a Palo Alto, Calif.-based provider of menopause health care solutions, raised $25m in Series A funding, led by GV and joined by insiders Felicis, Semper Virens, Icon, 25M and Operator Collective. https://axios.link/48qwtqN

• Varian, a unit of Siemens Healthineers, acquired Aspekt Solutions, a Greenbelt, Md.-based provider of medical physics and dosimetry services, from L2 Capital. www.aspektsolutions.com

• Gauge Capital, a Texas-based midmarket PE firm, is raising its fourth fund, per an SEC filing. www.gaugecapital.com

3. Deals o' the day

• Jamie Sharp left a role as VP at Aetna to become the chief medical officer of Rippl. https://ripplcare.com/

4. It's Personnel

🚚 UPS to acquire MNX in bid to bolster health care business — WSJ

⚕️ How a shutdown would impact key health care programs — The Hill

💰 These employers took on health care costs, and the fight got nasty — WSJ

5. Your daily dose

Illustration of a prescription with a handwritten note saying "daily dose."

📈📉Situational awareness: M&A activity in the U.S. has picked up through the third quarter but remains well below 2022 levels, Axios' Michael Flaherty writes.

📖 What we're reading: Claire is nearly finished reading "A Certain Hunger" by Chelsea Summers — a wild ride, but not for the squeamish.

🥇 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.

September 28, 2023

1 big thing: Small Door Vet open to deal