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BFD Expert Voices - Health Tech Deals

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Infant microbiome testing startup Tiny Health raised $8.5 million in Series A funding, CEO Cheryl Sew Hoy tells Erin exclusively.

Why it matters: The gut microbiome, which impacts overall health, is established in infancy, and research suggests babies' guts are more responsive to intervention.

Zoom in: Spero Ventures led the round. TheVentureCity, Overwater Ventures, Next Coast Ventures and Peterson Ventures joined.

Funds will fuel Tiny Health's research, including two in-progress studies, and its work on B2B deals including co-branded partnerships with CPG companies such as supplement makers and diaper businesses.

Sew Hoy says the Series A will last the company "a few years." Should Tiny raise again, she anticipates a Series B in 2027.

How it works: The Austin-based company sells home gut microbiome tests for babies, children, pregnant people and adults, plus vaginal microbiome tests, for $199 to $249.

The tests use shotgun genetic sequencing, a more advanced form of genetic sequencing than that offered by standard PCR methods.

The big picture: Questions remain about the best strategies for maintaining a healthy microbiome — the condition of which fluctuates based on age, environmental stressors, infections and seasonal nutrient availability.

The backstory: A mother of two, Sew Hoy created Tiny as she looked to avoid some of the microbiome issues tied to C-section birth.

What they're saying: "Tiny's commitment to being honest about where the science is, having products they've vetted themselves and making recommendations where they can ... is really important," says Spero Ventures partner and Tiny investor Sara Eshelman.

"The longer-term vision is Tiny Health as a household name for the microbiome," says Sew Hoy, adding that Tiny wants to help "supplement companies improve their products."

One fun thing: The "tiny" in Tiny Health isn't just a reference to small humans; it also refers to the tiny microbes populating our guts.

State of play: Despite some notable flameouts including the 2019 collapse of buzzy microbiome test company uBiome, microbiome testing companies have continued to secure venture backing.

Microbiome analysis company Viome last summer closed an $86.5 million Series C.

Jona, an AI-powered gut microbiome testing startup, last fall raised $5 million.

Oral microbiome test startup Bristle in 2022 landed a $3 million seed round.

1 big thing: Tiny Health digests $9M for baby gut health

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

Khosla Ventures led a $14 million Series A round in mental health triage and support startup Limbic, CEO Ross Harper tells Erin exclusively.

Why it matters: With national psychiatrist shortages predicted to worsen, venture backers are flocking to tools that promise to bolster provider efficiency.

Zoom in: New investors Gaingels and Illusian participated in the round.

Funds will be used to make Limbic's clinical mental health AI available to U.S. providers.

Harper declined to say when he sees Limbic raising a Series B.

How it works: New York- and London-based Limbic offers clinically based AI support tools originally developed for the U.K.'s National Health Service. Those tools include:

AI-powered self-referrals to verify patients' eligibility and identify primary symptoms while integrating with providers' existing tools.

A therapy companion to engage patients between sessions with chat-based interventions that providers can edit and personalize.

The company operates strictly as a B2B, enterprise-focused provider-enablement tool.

The fine print: A Limbic-sponsored study published in JMIR AI in 2023 found Limbic's tools shortened the time spent on mental health assessments, suggesting a boost in mental health providers' clinical efficiency.

And another Limbic-sponsored study published this February in the journal Nature associated the company's self-referral tools with higher referral rates among underrepresented groups.

What they're saying: "We are not a wellness solution. And that differentiates us in this market," says Harper.

"Limbic is a clinical tool used in clinical settings, and the evidence base required in order to be safe and reputable in this space is entirely different," he adds.

Khosla Ventures partner Adina Tecklu sees the company solving two problems: "One for the patient who needs access and another for the provider who wants to spend time with patients but is so backlogged they spend their first patient meeting doing a generic intake."

State of play: AI-powered behavioral health companies focused on patient triage and provider support have attracted a hefty amount of investor attention in recent months.

Therapy voice analysis startup Eleos Health last fall banked $40 million in Series B funding.

Blueprint, a developer of patient tracking and outcomes assessment tools for therapists, last summer raised $9 million in Series A funds.

Heard, which handles administrative tasks for behavioral health providers, last summer collected $15 million in unlabeled funding following a $10 million in Series A.

2. The BFD: Mental health triage support co Limbic gets $14M

Illustration of a man in profile with a phone over the top half of his head revealing a view of his brain.

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

• Overjet, a Boston-based provider of FDA-cleared technology to guide dental organizations' decisions about patient care, raised $53.2m in Series C funding led by March Capital with participation from General Catalyst, Insight Partners, E14 Fund, Crosslink Capital, Spring Rock Capital, Liquid 2 Ventures, 
Harmonic Growth Partners and the American Dental Association at a valuation of $550m. overjet.ai

• Roshal Health, a Houston-based ultrasound and echocardiogram tech provider to clinics and hospitals, raised $10m in unlabeled funding led by Catalio Capital Management with participation from Green Street Impact Partners. roshalimaging.com

• Bitewell, a Denver-based food-as-medicine marketplace for employers, is raising a $2.5m insider-led seed, per a form D filing.

• Ema, a Houston-based women's AI health assistant, raised $2m in bridge funding from Kubera Ventures and Victorum Capital and insiders HearstLab, Wormhole Capital, Acumen America and Techstars. emaapp.co

• Team8, a Tel Aviv- and New York-based venture firm backing companies in cyber, AI, fintech and digital health, raised a new fund totaling $500m. team8.vc 

3. Deals o' the day

• Emily Pantalone, former senior manager of market competitiveness at the Alliance of Community Health Plans, joined Manatt as manager of health care consulting. manatt.com

• Becca LaFond, former chief customer officer at Olive, joined Healthy.io as U.S. general manager. healthy.io

• Peter Carlson, former CFO at Spectral AI, was promoted to CEO. axios.link/3P49o5f

• Brenna Beluk, formerly of Verily, joined VentureWell as senior program officer of health commercialization. venturewell.org

• Jodi McLean, former talent acquisition partner at Lyra Health, joined Pomelo Care as senior clinical recruiter. pomelocare.com

• Christopher Slachta, former divisional VP of global operations and supply chain at Abbott, joined Cytovale as COO. axios.link/3v33ASr

• Ethan Choi, former Accel partner, joined Khosla Ventures to help lead growth-stage investing across AI, enterprise software, fintech, consumer and health care. axios.link/3wMArvg

4. It's Personnel

🏥 Medical clinic Juno closes unexpectedly — The Black Wall Street Times

🏅 Winners and losers from health care deal — Axios

💰 Hackers behind Change attack get $22M payment — Wired

5. Your daily dose

Illustration of a pill capsule as the bell hammer on an alarm clock.

🙅 Situational awareness: Walgreens is not selling its specialty pharmacy Shields Health, despite a Bloomberg report to the contrary, CEO Tim Wentworth said at a conference.

🌴 Programming note: Aaron will be on the ground at HPE Miami on Wednesday and Thursday. Say hi if you see him!

🍝 After failing to get a table at Rao's NYC, Aaron is excited to dine at Rao's Miami.

🙏 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 05, 2024

1 big thing: Tiny Health digests $9M for baby gut health