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BFD Expert Voices - Health Tech Deals

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Aster, a pregnancy care and tracking platform that virtually connects patients and providers, has raised $2.4 million in pre-seed money, CEO Fifi Kara tells Aaron exclusively.

Why it matters: Maternal mortality rates in the U.S. are much higher than in other developed countries, and 80% of deaths during pregnancy are preventable.

Meanwhile, Black women in the U.S. face disproportionately high rates of maternal mortality, per the CDC.

"If you solve for the most marginalized groups, you can solve for everyone," says Monique Woodard of Cake Ventures, which led the round.

Details: Other investors include Cornerstone, Zeal Capital Partners (BBFI), Octopus (FCF), Blueprint, Everywhere and select angel investors.

The original target for the seed was $1.5 million, Kara notes.

How it works: The San Francisco-based software platform connects patients and providers to track pregnancy and book appointments.

Its scheduling tool considers prior conditions and risk levels, to help schedule prenatal appointments in an optimal time frame.

Aster also offers a remote vital signs tracker, with a blood pressure cuff, glucometer and urine analysis test strips.

The company is adding a transcription service to easily record conversations between patients and physicians, Kara says.

The big picture: Remote monitoring can help detect key risks like gestational hypertension, gestational diabetes and preeclampsia early. It not only means prevention of potential complications, but also early treatment, which contributes to reducing maternal mortality.

What's next: Giving Aster more than two years of runway, fresh funds will be used to move out the platform out of the pilot phase.

There are currently 30 clinics in pilot, some of which are being onboarded over the next month, Kara says.

"We have an end-of-year target of 100 clinics to be onboarded," she says.

What they're saying: "If you get pregnant today, you are likely to have a worse outcome than you would have 20 years ago," says Kara.

"There are closures all over the place," she adds, noting that need is particularly high in Alabama, Alaska, Ohio and Maryland.

"Aster is going after smaller and independent clinics who were not sucked up into a big network, and that is good for long-term impact for maternal and prenatal health care across the country," Woodard says.

State of play: There is a wave of health care startups aiming to help the pregnant population.

Mahmee, a maternal health startup, raised $9.2 million of Series A funding.

Sonio, a ultrasound technology company, raised $14 million in Series A to expand in the U.S.

Allara, a virtual care platform for women of reproductive age with chronic hormonal conditions, raised $10 million in Series A funding.

Flashback: Aster was founded when co-founder Lailah Kara-Newton, Fifi Kara's sister, had a near-death experience with her pregnancy.

Her son was born not breathing, as Kara-Newton had undiagnosed preeclampsia.

The experience could have been prevented if Kara-Newton's urine and blood pressure had been checked more regularly and earlier.

😊 1 good thing: "Her son Eesa is a happy and healthy 4-year-old boy now who loves Spiderman," Kara says.

1 big thing: Aster nabs $2.4M for pregnancy care platform

Illustration of four toy blocks with symbols of a check mark, a pregnant person, a heart, and a baby.

Cognito Therapeutics, a medical device company using light and sound to treat neurodegenerative disease, raised a $35 million Series B extension.

Why it's the BFD: Cognito bills its product as a noninvasive, less costly alternative to Alzheimer's drugs, but the company will have to prove that in the clinic, Axios' Claire Rychlewski and Erin write.

How it works: Cognito's headset — currently in clinical trials — emits light and sound designed to stimulate brain activity being disrupted by neurodegenerative conditions like Alzheimer's disease.

Patients use the headset for an hour daily at home.

The company expects to complete the trial of its device and submit data to the FDA by the end of next year, per STAT.

In the weeds: Cognito's experimental impact on disease progression compared favorably to existing Alzheimer's drugs Leqembi (which is on the market) and donanemab (in Phase 3 trials), according to the company.

Cognito also found preliminary evidence that its device impacts synaptic function.

Cognito claims its noninvasive approach also mitigates amyloid-related imaging abnormalities (ARIAs), a side-effect of monoclonal antibody treatments that can lead to brain bleeds.

Be smart: Cognito's success relies on clinician adoption and reimbursement from Medicare and other payers — an area that's proved difficult for other digital therapeutics companies.

If the company can prove its device creates cost savings in an area as tough as Alzheimer's — for instance, periodic brain imaging to check for ARIAs — it may be able to make a convincing case to insurers.

State of play: Digital therapeutics was the least-funded category in the third quarter of 2023, as slow progress toward reimbursement has blocked many of the prescription-based tools from gaining the necessary uptake. For example:

Akili, a Boston-based provider of digital therapeutics for ADHD, in September laid off 40% of its staff and shifted its model from a prescription basis to an OTC approach.

Boston-based Pear Therapeutics, which provided digital tools to treat substance use disorders and insomnia via prescription, in April filed for bankruptcy (though addiction telehealth provider PursueCare acquired Pear's addiction treatment apps last week).

2. The BFD: Cognito raises $35M for neuro device

Illustration of a brain surrounded by medical crosses and lines

Value-based remote diabetes care startup Valendo Health debuted with $4 million in seed funding, CEO Dave Terry tells Erin exclusively.

Why it matters: Unlike rival providers, the company works directly with independent endocrinology practices, moving them toward value-based contracting.

Details: Valendo was built at health care startup builder Redesign Health.

Funds will fuel the company's first provider partnerships and data-focused research on Medicare spending in diabetes care.

Terry declined to give specifics on when Valendo will fundraise next but said the company "could potentially go out later this year or early next."

How it works: The Boston-based company works with endocrinologists to increase the number of patients they serve — and the frequency at which they serve them — by offering them remote monitoring tools such as continuous glucose monitors (CGMs).

The provision of virtual care is also intended to help with the triage of patients for in-person services, helping ensure that those who need in-person appointments get them in an appropriate fashion.

Other types of diabetes caregivers are also used in Valendo's model to help increase endocrinologists' capacity, such as certified diabetes educators, nurse practitioners and physician's assistants.

Once Valendo accomplishes the above at a given practice, it plans to shore up the practice's administrative and clinical data to place them into value-based specialty care contracts with payers and at-risk provider groups.

What's happening: Valendo is launching in partnership with independent providers Cecelia Health, a New York City-based virtual specialty clinic, and Advanced Metabolic Care and Research, an Escondido, California-based endocrinology practice.

The big picture: Diabetes represents a large population for which a lot of management happens at the primary care level, but some research suggests people achieve better outcomes when they regularly engage with specialists.

What they're saying: After leading three other value-based specialty care companies, Terry concluded that while primary care is vital, many people see specialists when they get sick.

"That led me to be interested in finding ways to think about how to pay specialists differently, evaluate their performance, and create more accountability for specialty care," Terry says.

State of play: The success of remote diabetes care proved a major proof point for telehealth, with companies in the sector collecting a bolus of venture funding in recent years. For example...

Metabolic care startup Twin Health last December raised $50 million in Series D funding.

Digital diabetes startup 9am.health last spring collected $16 million in Series A capital.

Virtual metabolic care provider Omada Health last winter raised $192 million in a Series E round.

3. Valendo seeds $4M for diabetes model 

Illustration of a glucometer with a dollar sign on the screen.

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

• SmithRx, an SF-based pharmacy benefits management company, raised $60m in Series C funding led by Venrock. https://axios.link/47TDizu 

• Accompany Health, a Bethesda, Md.-based provider of health care services to complex low-income patients, raised $56m in Series A funding from Venrock, Arch Venture Partners, IVP, Granite Capital Management and Evidenced. https://axios.link/3HFU1LY

• Aqemia, a French biotech company, raised €30m in a Series A extension led by Wendel Growth with participation from insiders Bpifrance Large Venture, Eurazeo and Elaia, bringing total round funding to €60m. https://axios.link/483X63u

• Spark Advisors, a New York-based Medicare navigation startup, raised $25m in Series B funding. Viewpoint led, and was joined by insiders American Family Ventures and Primary Venture Partners. www.sparkadvisors.com

• Vital Interaction, an Austin, Texas-based health care business intelligence and workflow automation tool provider, raised $15m in Series A funding led by Next Coast Ventures. https://www.vitalinteraction.com/

• AiCure, a NYC-based clinical trials data analytics company, raised $12m in loan refinancing and $4m in venture funding from existing investors. https://axios.link/3UjEdpH 

• Vitruvian Partners invested $21m in ObjectiveHealth, a Franklin, Tenn.-based clinical research company. https://objective.health/

• Arlington Capital Partners made a majority investment Afton Scientific, a Charlottesville, Va.-based contract, development and manufacturing organization dedicated to sterile manufacturing of injectable pharmaceuticals. https://aftonscientific.com/

• Instinct Science, a Philadelphia-based veterinary software platform, acquired VetMedux, a Tulsa, Okla.-based point-of-care information platform. https://www.instinct.vet/

4. Deals o' the day

• Sondra Pepe, formerly of Medidata, joined AiCure as SVP of product management. Also at AiCure, Josh Wilson, formerly of Syneos Health, joined as SVP of operations. https://axios.link/3UjEdpH

• Chet Robson, former CMO of MDisrupt, joined Jasper Health as CMO. https://www.hellojasper.com/

• Steven Hooper Jr., president of financial services at TipHaus, joined Yuzi as strategic advisor. https://yuzicare.com/

5. It's Personnel

🏥 HHS releases voluntary health care cybersecurity goals — Healthcare Dive

🕵️ Dana-Farber cancer researchers conduct broad investigation of manipulated data — STAT

🤝 PE is starting to share with workers sans financial hit — NYT

⚖️ FTC sues to block a proposed hospital deal in N.C. — STAT

🤖 DOJ's Healthcare Probes of AI Tools Rooted in Purdue Pharma Case — Bloomberg Law

📉 Weight loss app Noom lays off employees including coaches and engineers — Endpoints News

6. Your daily dose

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

It's a stacked Tuesday, Health Tech enthusiasts.

🍰 Erin squeezed in a 1½-hour+ workout each of the last eight days and is celebrating with homemade gluten-free chocolate cake. It's called balance.

💗 Thanks for reading, and extra thanks to newsletter editor Claire Rychlewski and copy editor Brad Bonhall. Please ask your colleagues, friends, and family to sign up.

January 30, 2024

1 big thing: Aster nabs $2.4M for pregnancy care platform