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Soaak, a company using sound frequency therapy to help mental and physical health, aims to close a $28 million Series A in the coming months, co-founder Henry Penix tells Aaron exclusively.

Why it matters: Sound therapy has been shown to be effective in reducing symptoms of issues like anxiety and fibromyalgia.

The company has $5 million of bank debt financing earmarked for the Series A, which is likely to close in June, per Penix.

How it works: Tulsa, Oklahoma-based Soaak provides in-person and virtual services, offering sound frequency therapy, brain mapping, neurofeedback and other wellness offerings.

Its app reads biometrics from wearables such as Fitbit, Apple Watch and Oura ring to offer additional insights.

Soaak aims to help patients with anxiety, depression, insomnia, ADHD and brain fog.

Catch up quick: Founded in 2020, Soaak has completed three small acquisitions to date: Tulsa Natural Health Clinic, Thermography Tulsa and RenuYou Clinics.

What's next: Series A funds are designed to last 24 months, at which point the company will "assess a larger acquisition we have been considering," Penix says.

Zoom in: Soaak has contracts with clients like the U.S. Air Force and expects to secure profitability in the next two years, says Penix, who declined to disclose revenue.

Its offering is also available directly to consumers for $29.99 a month or $299.99 a year. Users can also pay with FSA and HSA funds.

A majority Native American-owned company, Soaak has offices and team members located within the boundaries of the Muscogee (Creek) Nation and Cherokee Nation.

As of 2022, the company was testing its services with members and employees of the Cherokee Nation.

Reality check: While studies indicate sound therapy is clinically beneficial, the research is still limited.

Flashback: Penix started the company with $2 million of his own money in 2020.

1 big thing: Soaak raising $28M Series A

Illustration of a hundred dollar bill as an equalizer.  

Swallowing dysfunction treatment developer Phagenesis gobbled up $42 million in Series D financing, CEO Reinhard Krickl tells Erin exclusively.

Why it's the BFD: Swallowing difficulties, or dysphagia, can result from brain injuries like stroke and are linked with longer hospital stays and higher rates of complications and deaths.

Zoom in: EQT Life Sciences and Sectoral led the round and were joined by new backers British Patient Capital, Northern Gritstone and Aphelion.

Funds will go toward U.S. commercialization efforts, powering clinical trials, and real-world data collection in pursuit of long-term U.S. reimbursement.

Krickl declined to say when he foresees Phagenesis raising again but said he hopes this will be among its last rounds.

How it works: Manchester, England-based Phagenesis makes an FDA-approved dysphagia neurostimulation system called Phagenyx.

The system focuses on restoring swallowing coordination and control.

Krickl plans to secure roughly 65% reimbursement for the technology via the New Technology Add-On Payments (NTAP) pathway, which allows hospitals to receive reimbursement for new medical services and technology not yet included in Diagnosis-Related Group (DRG) rates.

What they're saying: "We see this raise as a recognition that this is a serious issue, a recognition of that unmet need, and of our company being a game-changer in that space," says Krickl.

Between the lines: Krickl and EQT Life Sciences partner Drew Burdon acknowledge the challenges associated with being a new device in a new market.

"The advantage of being first-in-class is the market is yours for a period; the challenge is your customers aren't used to this type of product," says Burdon.

"It's easier to raise money into a market with a product category everybody knows," Krickl says. "It's much more difficult if you're going to market where it's harder to assess the value of your newly introduced therapy."

State of play: Neurostimulation medical device companies raised significant rounds — including later-stage funding — in January alone.

Motif Neurotech, a developer of brain stimulation devices for depression, in January collected $18.75 million in Series A funding.

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

Brain data tracking company Rune Labs closed a $12 million Series A extension.

2. The BFD: Phagenesis swallows $42M Series D

Illustration of a medical red cross under spotlights on a stage.

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

• Healthee, a health benefits navigation company, raised a $32m Series A co-led by Fin Capital, Glilot Capital Partners, and Group11, with TriNet (NYSE: TNET) also participating. axios.link/49zsXur

• Kismet, a New York- and Melbourne-based appointment booking and insurance benefits navigation startup, raised $8.2m in seed funding led by Prosus Ventures and Airtree Ventures. kismet.healthcare

• Bone Health Technologies, a San Francisco-based medical equipment manufacturing company, raised a $5m funding round from Esplanade Ventures and Berkeley Catalyst Fund. axios.link/49AS5k9

• Wivi Vision, a Barcelona-based developer of 3D games for visual health, raised $4.3m in Series A funding. wivivision.com  

• Vitrue Health, a British posture analytics startup, raised $4m in funding co-led by MMC Ventures and Hambro Perks. axios.link/49SWHC7

• KKR is seeking to sell Philippines hospital operator Metro Pacific Health, which could fetch at least $3b, per Bloomberg. axios.link/3T1Zulw

• WindRose Health Investors acquired and invested $100m into CardioOne, a Houston-based provider of VBC tech tools for independent cardiology clinics. cardioone.com

• WebMD acquired Healthwise, a Boise, Idaho-based patient and member health education and engagement company. axios.link/4bPttFY 

• Avista Capital closed its sixth fund at $1.5b, exceeding its $1.25b target. axios.link/49UeYPl 

• Absci Corporation (Nasdaq: ABSI), a Vancouver-based generative AI drug creation company, raised $85m in an underwritten public offering of 19,205,000 shares of its common stock. axios.link/3uKESq8

3. Deals o' the day

• Jesse Waldron, former CFO of Cricket Health, joined Thyme Care as CFO. thymecare.com

• Brian Anderson, chief digital health physician at Mitre, became the Coalition for Health AI's first CEO. coalitionforhealthai.org

• Paul Meyer, former CEO of The Commons Project Foundation, became CEO of Smart Health Network PBC. smart.health

• Brian Bouma, former COO of Madison Reed, joined Tend's board of directors. hellotend.com

• Sundeep Agrawal, general partner at Colt Ventures, and Timothy Stubbs, principal at Vivo Capital, joined BlossomHill's board of directors. axios.link/3UZCo1F

4. It's Personnel

📉 Oprah is leaving WW, sending stock tumbling — CNN

💊 Inside one effort to create a national pharmacy union — MedCity News

❌  SCAN, CareOregon abandon merger — Healthcare Dive

🔎 Delegation demands answers from Steward PE — Boston Globe

💵 Many pricey generics unavailable at alternative pharmacies — STAT

5. Your daily dose

Illustration of a repeating pill bottle pattern with one rolled up newspaper.

💊 Situational awareness: Walgreens and CVS announced they would begin selling abortion medications this month.

🪵 Erin spent the weekend cooped up in the house mid-storm with a roaring fire and good book.

❤️‍🔥 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.

March 04, 2024

1 big thing: Soaak raising $28M Series A