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Israeli startup Annabella raised an $8.5 million seed to expand its FDA-approved breast pump in the U.S., co-founders Masha Waldberg and Uri Yaffe tell Aaron exclusively.

Why it matters: The technology to make the process more efficient and comfortable has been slow to evolve.

Details: Investors include Israel Shark Tank's Yasmin Lukatz (founder of the Israel Collaboration Network), serial entrepreneur and investor Oren Dobronsky, as well as Zohar Gilon of Tamar Technology Ventures, and Menachem Weinfeld of Starry Group.

How it works: Annabella's FDA-cleared breast pump includes a tongue that simulates baby's suckling (and, according to Waldberg, stimulates hormones), and an adjustable breast shield.

Currently sold directly to consumers, its single electric breast pump and pumping bra costs $250 but for the first few months it will be $199 USD, per the company's website.

Since February of 2023, Annabella has sold over 4,000 breast pumps through Shilav's retail stores in Israel, per the company.

What they're saying: "Replicating nature is a very humbling experience but we have a dream to erase all negative talk when it comes to breastfeeding and pumping," says Waldberg.

What's next: Annabella will use fresh funds to onboard U.S. insurance providers to make its product more accessible to consumers.

The company aims to start selling in the U.K. at the end of this year.

Annabella expects to raise more funding in the future, Waldberg says, noting timing depends on sales and marketing efforts.

State of play: In the wake of legislation like the PUMP Act and Pregnant Workers Fairness Act, which require employers to provide accommodations for needs related to pregnancy, breastfeeding support has moved into the spotlight in the U.S.

Pumpspotting, a Kittery, Maine-based community-driven breastfeeding support platform, raised $2.2 million in seed funding.

Elvie, a U.K.-based developer of connected tech hardware for women's health, including a silent, wearable breast pump, raised $42 million in Series B funding.

Babylist, an Oakland, Calif.-based baby registry business, acquired medical equipment supplier SourceMD and launched a new business called Babylist Health.

The bottom line: "In an area that is so vital like breastfeeding, women have been suffering and sacrificing," Yaffe says. "We want to help them have a pleasant and efficient experience."

1 big thing: Annabella pumps $8.5M seed

an illustration of a baby bottle full of milk with dollar signs next to the measurement lines

Elevance Health is acquiring Paragon Infusion for well north of $1 billion, three sources tell Axios' Claire Rychlewski.

Why it's the BFD: With at least one other infusion asset on the block right now, M&A in the space is starting strong in 2024.

Details: Paragon owner Peak Rock and Elevance declined to comment on financial terms, which were not disclosed.

Paragon was marketing itself off EBITDA of approximately $100 million, Axios reported in August.

Paragon generates about $1 billion in revenue, per that report.

Jefferies served as the sell-side adviser for Paragon.

What they're saying: "We were gearing up for a process in 2024, but nothing formal had been launched," Peak Rock tells Axios.

"We received significant inbound interest prior to a future process, which led the firm to entertain certain potential buyers."

Flashback: Peak Rock acquired Paragon for between $250 million and $275 million in late 2020 when the company was generating about $25 million in EBITDA.

Since then Paragon has grown at a 30% clip annually, Axios reported.

Peak Rock focuses on founder and family-led businesses and started circling Paragon during the early days of COVID lockdowns — during a time when many sponsors were turned inward, the firm says.

How it works: Paragon provides home and on-site infusion therapy, plus specialty pharmaceuticals, rare disease care, and bleeding disorder treatment.

Along with its physical centers, Paragon also offers in-office infusion suites for physicians.

The company is licensed to serve patients in all 50 states and has around 50 infusion centers located across eight of them.

What we're watching: Triple-Tree will be shopping Boyne Capital-backed infusion provider Infusion Associates at JPMorgan next week.

2. The BFD: Paragon price scoop

Illustration of a key ring hanging on an IV pole. 

Hospital patients are more likely to fall or acquire infections inside of private equity-owned facilities than in peer facilities, according to a study by Harvard Medical School and University of Chicago researchers.

Why it matters: Private equity is coming under more scrutiny as it buys more health care providers, and that could lead to new regulations, Axios' Dan Primack writes. 

Zoom out: Most research on PE-owned hospitals or physician groups has focused on operational metrics that impact patients indirectly, such as staffing levels.

This one, which is based on over 1 million hospitalization records over an 11-year period (2009-2019), is specifically about quality of care.

Details: The researchers examined 51 PE-owned hospitals, matching each to up to eight different "control" hospitals that were picked via metrics like geography, size, and teaching status (a total of 259 "control" hospitals were included).

They applied regression models to Medicare Part A claims data, including for three years before and after private equity acquired hospitals.

The top finding was a 25.4% increase in hospital-acquired adverse conditions at PE-owned hospitals versus pre-acquisition, with the control hospitals being used to normalize the data, including a 37.7% jump in central line–associated bloodstream infections.

Mortality was slightly lower at PE-owned hospitals, although the differential disappeared a month after discharge.

Data was presented as averages, although supplemental median data tracked similarly.

What they're saying: "The rates of these adverse conditions have been going down over time, which we obviously all want, but we found a significant difference between the private equity hospitals and the control hospitals," explains Harvard's Zirui Song, who conducted the study alongside Sneha Kannan and Joseph Dov Bruch.

The researchers noted that their findings "heighten concerns about the implications of private equity on health care delivery," but that they "do not imply causation."

That last part, Kannan says, is because it's impossible to conduct a randomized clinical trial for such data, which would be needed to assert causation.

By the numbers: There are at least 386 U.S. hospitals owned by private equity, representing 9% of the total and 30% of for-profit hospitals, per the PE Stakeholder Project.

Zoom out: A few studies have found that PE ownership of hospitals has no negative impact on care, including this one tied to outcomes on acute conditions like pneumonia and stroke.

American Investment Council CEO Drew Maloney tells Axios: "The private equity industry plays an essential role in providing local hospitals with the capital they need to improve patient care, expand access, and drive innovation. This research doesn't reflect private equity's full record of strengthening health care across the country."

The bottom line: Maloney is correct that the Harvard study doesn't tell the full story of how PE ownership impacts hospital patients. But it wasn't intended to do so.

It was designed to look specifically at adverse events suffered by patients after being admitted, with a meticulous methodology, and the results are fairly damning.

If private equity wants to better control its own future in health care, and help patients, a better reply might be something like: "These findings are distressing, and our job now is to figure out why this happens and stop it from continuing to happen."

3. Increased patient risks at PE-owned hospitals

Illustration of a caduceus-shaped door knocker.

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

• Devoted Health, a Waltham, Mass.-based health insurtech focused on Medicare Advantage, raised $175m in Series E funding at a $12.87b valuation led by a syndicate composed of The Space Between, Highbury Holdings, GIC, Stardust Equity, Maverick Ventures, and Fearless Ventures, plus insiders Andreessen Horowitz and General Catalyst. https://axios.link/3H6o2nZ 

• Moonwalk Biosciences, a Bay Area-based gene editing startup focused on treatments for chronic diseases, raised $57m in Series A funding from Alpha Wave Ventures, Arch Venture Partners, Future Ventures, Khosla Ventures, GV, and YK Bioventures. https://axios.link/3vo3Ifc  

• Manina Medtech, a Spanish IVF startup, raised €1.75m in unlabeled funding led by Medex Partners. https://axios.link/3H4pS8L

• Whistler Capital Partners, a Nashville-based health-focused PE firm, invested in Heart + Paw, a Philadelphia-based veterinary and pet care company. https://heartandpaw.com/ 

• Hera Biotech, a San Antonio, Tex.-based developer of non-surgical technologies for diagnosing and staging endometriosis treatment, agreed to acquire the endometriosis diagnostic assets and associated IP of Scailyte, a Swiss biomarker discovery company. https://axios.link/41J6x6P

4. Deals o' the day

• Stuart Quin, former CEO at Medica Group, joined GHO Capital as partner. https://ghocapital.com/

• Amir Lewkowicz, formerly CCO of AIVF, joined Team8 as director of business development. https://team8.vc/

• Carrie Hatfield, former chief growth officer at Jasper Health, joined Carrot Fertility as VP of health plan partnerships. https://www.get-carrot.com/

• Jon Maschmeyer, former senior partner and co-head of health care investments at Vistria Group, joined Permira as partner focused on U.S. health care investments. https://axios.link/41T5m4H

• Benjamin Wilson, former adviser at Redesign Health, joined Rezilient Health as chief of staff. https://www.rezilienthealth.com/ 

• Former principals Cynthia Yee, Amrinder Singh, and Mike Kramer were promoted to partners at Vensana Capital. https://www.vensanacap.com/

• Dudley Baker, formerly of Canaccord, and Kerr Robertson, formerly of William Blair, joined Houlihan Lokey's health care group as managing directors. 

• Jamil Beg, formerly at 5AM Ventures, and Nikola Trbovic were appointed partner and managing partner of SV Health Investors' biotech team, respectively.  

5. It's Personnel

💸 Scoop: AI prescription assistant nabs backing from Mayo Clinic, Eli Lilly — Axios

🧪 23andMe tells victims data breach was their fault — TechCrunch

🤳🏾 Where DTC health care is headed in 2024 — Modern Healthcare

🔥 Burning questions for the JPM Healthcare Conference — STAT

6. Your daily dose

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

🏔️ Are you heading to Davos this year? Join us at Axios House for a week of events convening global leaders for timely conversations on AI, sustainability and more. Check out our programming and register to join.

☃️ Thrilled that Tahoe is finally getting a dusting of snow, Erin yesterday enjoyed dinner at a rooftop restaurant with views of a nascent winter wonderland.

🔷 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.

January 04, 2024

1 big thing: Annabella pumps $8.5M seed