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BFD Expert Voices - Health Tech Deals

BFD Expert Voices

Carewell, an online retailer for home health and caregiver products, raised a $24.7 million Series B led by MBF Healthcare principals, CEO Bianca Padilla tells Axios' Claire Rychlewski exclusively.

Why it matters: With an overwhelming majority of Americans planning to age at home, demand for caregiver resources will only continue to grow.

How it works: Newly based in Miami, Carewell wants to be the caregiver equivalent of pet care e-commerce retailer Chewy, Padilla says.

Caregivers can peruse a broad section of home health products across incontinence, nutrition, mobility, wound care and maternal and child health.

Carewell's customer service team offers advice, product recommendations and caregiving guidance and support.

What's happening: Alongside the fundraise — which included existing investors Sageview Capital and Headline and is designed to last more than two years — Carewell hired several senior executives from Chewy to fill its C-suite.

What's next: With MBF's guidance and relationships, Carewell hopes to expand into a B2B model, targeting health systems and payers as potential sales channels.

"We do believe that we can provide a lot of value on a B2B side," says MBF managing partner Jorge Rico. Carewell has already met with one hospital system, he adds.

Flashback: MBF didn't expect its first meeting with Carewell to result in an investment, Rico tells Axios.

"We were asked as a favor to meet with her and just provide some advice," he tells Axios. But the private equity firm was impressed with Padilla's team and passion, he says.

"It's definitely a heavy lift but we really did feel that there was a tremendous opportunity in the market, especially when providing health care products," Rico says.

What they're saying: "When I was a first-time caregiver, we brought my  grandmother home from an unexpected surgery and she lost 90% of her mobility," Padilla says.

"There weren't any resources for us to understand how to care for her," she says.

Between the lines: A combination of price inflation, labor shortages and supply chain pressures has battered Chewy's stock price in recent years.

Price inflation is a concern for Carewell too, though Padilla says she hopes to lean on learnings from the former Chewy execs joining Carewell.

"What they bring to the table is experience navigating a fast-growing e-commerce company. And they've successfully created a household name," Padilla says.

More than 80% of the products Carewell sells are consumable repeat purchases and its auto-ship program comprises a large portion of its revenue, she says.

1 big thing: Carewell nabs $25M Series B

Illustration of a cash register with glowing red health pluses displayed on the screen. 

Welsh, Carson, Anderson & Stowe acquired AssistRx, a privately held pharmacy services software platform, sources tell Aaron.

Why it's the BFD: Amid resilient pharma and life sciences sectors, PE firms are flocking to outsourced services companies.

Details: Exact valuation could not be learned, but two sources tell Axios the seller's expectations throughout the process hovered around $600 million.

Leerink Partners led the deal, per sources.

How it works: Orlando-based AssistRx offers a suite of products intended to accelerate electronic prescribing, patient consent, prior authorizations, real-time patient benefit eligibility queries and digital enrollment into therapy support programs.

AssistRx serves life sciences companies, health care providers and specialty pharmacies, per its website.

Founded in 2009, AssistRx acquired patient management software provider Caret in 2017 for an undisclosed price.

The bottom line: As daylight breaks in health care dealmaking, the backlog of deals from the last two years is starting to clear up.

Leerink and AssistRx did not return Axios' request for comment. 

2. The BFD: Welsh Carson buys AssistRx

Illustration of a prescription paper being digitized.

Axle Health, a home health care scheduling software company, raised a $4.2 million seed round, CEO Adam Stansell tells Aaron exclusively.

Why it matters: Home health is grappling with a labor shortage, and unpredictable schedules can hurt provider recruitment and retention.

Details: Pear led an initial tranche of the seed round, with a second tranche led by Trac VC.

Los Angeles-based Axle was part of accelerator Y Combinator's 2021 cohort.

How it works: Founded in 2020, Axle helps health care providers coordinate in-home health care visits, offering a patient- and clinician-facing dashboard for communication and scheduling.

Using Axle, providers can manage appointment availability and direct clinicians to appropriate homes efficiently and quickly.

Clinicians can use the software to manage their visit schedules, communicate with patients and track GPS location and mileage.

Flashback: Axle's launch dovetailed with soaring demand for telehealth during the COVID-19 pandemic, with an initial focus on D2C at-home diagnostics.

"Our initial product in 2021 during peak pandemic was focused on in-home COVID testing," Stansell says.

Stansell declined to disclose current financials, but said the company is profitable. 

Yes, but: As the pandemic faded, the company had to adapt its model to become a software-as-a-service offering for home health providers, Stansell says.

Between the lines: The pivot to SaaS is generally something investors are more excited about, says Pear Ventures partner Vivien Ho.

"In this environment, it's more important to have good margins and be profitable, while having a more scalable product," she says.

Axle surpassed $1 million in ARR in the first 12 months after launching the new SaaS product, the company says.

What's next: "We want to get integrated with as many EMRs as we can," Stansell says.

Axle's platform is currently integrated with Epic and Athenahealth.

The company also wants to add AI scheduling and chatbot capabilities to its platform, he adds.

🛞 1 fun thing: The company's name is a reference to a car axle.

"Axle is the core mechanical component of movement — and there is movement away from the hospital and into the home," Stansell says.

3. Axle Health raises $4.2M for home care scheduling

Illustration of a shadow cast over a home with a red cross for a door

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

• Pozitivf Fertility, a San Antonio-based fertility clinic network, raised $20m in unlabeled funding led by MonCap. axios.link/42LwHpX 

• Alodokter, an Indonesian telehealth provider, raised $5.2m in unlabeled funding from HL Mando and Beacon Venture Capital. axios.link/3UP3Wqh 

• Juniper, a U.K.-based workplace health care insurance startup, raised $1.9m in pre-seed funding led by Gateway, with 2100 Ventures, Exceptional Ventures and Heartfelt also participating. axios.link/49HxbzM

• Apollo Intelligence, backed by Frazier Healthcare Partners, acquired GlocalMind, a Plano, Texas-based market research and panel company for health care and life sciences. glocalmind.com

4. Deals o' the day

• Amanda Way, former adviser at Jazz Venture Partners, joined Boom Capital as venture partner. boomcap.co

• Abdul Eljabaly, former director of growth at Janus Health, joined Compass Surgical Partners as director of health system strategy. compass-sp.com

• Raman Venkatesh, former EVP at Aquaporin, joined Medtronic as the company's first chief sustainability officer. axios.link/4bFOMdf

• Lars Christian Lund, former SVP at 3Shape, became CEO of Hedia. axios.link/3SLv6fm

• Michael Eisenberg, a Stanford University professor of urology, became strategic adviser at Legacy. axios.link/49yX6tk

• Dan Kenger was promoted from SVP of design at Hims & Hers to chief design officer. axios.link/42Is3cp

• Winnie Tantraporn, former VP of sales at DarioHealth, joined Vida Health as VP of sales. vida.com

• Zenith Tillemann-Dick, formerly of Clipboard Health, joined In-House Health as director of sales. inhouse.health

• Erik Sallee, former CFO at Intuitive Machines, joined XiFin as CFO. xifin.com

5. It's Personnel

🖥️ Change Healthcare hit by cyberattack — TechCrunch 

⚖️ Exec convicted of insider trading re: medical device firm buy — AP

💊 Sempre Health, Mark Cuban, etc. disrupt drug pricing — Forbes

👀 Faceoff between insurer and health system shows hazards of consolidation —  Fierce Healthcare

❓ Alabama ruling adds to legal uncertainty around IVF — Axios

6. Your daily dose

illustration of a digital thermometer that reads "daily dose" 

📣 Worthy of your time: Our second annual Axios Pro subscriber survey is now live! Share your feedback to let us know what you want to see from Pro Deals in the next year.

💓 Erin indulged in the latest season of "Love Is Blind" and witnessed an acute demonstration of the importance of therapy.

✅ Thanks for reading, and extra thanks to newsletter editor Claire Rychlewski and copy editor Egan Millard. Please ask your colleagues, friends and family to sign up.

February 22, 2024

1 big thing: Carewell nabs $25M Series B