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BFD Expert Voices - Health Tech Deals

BFD Expert Voices

Silicon Valley venture firm General Catalyst is investing in health tech like it's early 2022, Erin writes.

Why it matters: Despite a years-long slump in digital health dealmaking, General Catalyst led and joined many of Q1's highest-profile health care deals.

Zoom in: Of the six health care deals the firm led in the first quarter of the year, three were over $50 million and five were in the double digits.

Case in point: The firm steered a $95.5 million round in Harbor Health, an Austin-based specialty and primary care clinic group founded in 2021.

General Catalyst also led a $60 million Series A in health care operations enabler Fabric Health and a $53 million Series A in health care staffing LLM developer Hippocratic AI, as well as:

A $30 million Series B in pediatric mental health company InStride Health

A $10 million raise in Brazilian autism care startup Genial Care

An $8 million seed in cardiology enabler Chamber Cardio

By the numbers: Including deals in which it was the lead investor, General Catalyst participated in a total of seven health care fundraises in Q1 2024 for a total of $490.2 million.

Those figures resemble the firm's bets in terms of deal number and total capital for Q2 and Q4 of 2022 — the year digital health funding began its historic and precipitous decline.

Context: Q1 2024 was the lowest first quarter for digital health sector funding since 2019, per a recent Rock Health report.

The other side: Other notable Q1 2024 digital health deals in which General Catalyst did not participate include Abridge's $150 million Series C, Zephyr AI's $111 million Series A and Ambience Healthcare's unlabeled $70 million raise.

1 big thing: General Catalyst led 6 top Q1 health deals

Fluctuation in General Catalyst's healthcare deal flow from 2022 to 2024, with a peak in Q1 2022 and a significant drop in Q3 2022.

Cariloop, a caregiving support platform for employers, raised a $20 million Series C led by ABS Capital, CEO Michael Walsh tells Aaron.

Why it's the BFD: Almost 22% of U.S. workers perform caregiving duties for an older, sick or disabled family member.

How it works: The Richardson, Texas-based company connects caregivers to coaches for on-demand personalized support.

Caregivers are offered help finding, booking and paying for care.

Cariloop serves employers including Procter & Gamble, KPMG, CAE, the American Cancer Society, Arthur J. Gallagher, the ASPCA and Insperity.

What's next: Walsh hopes the Series C funding gets Cariloop to profitability and helps it build its coaching team.

"We do not have plans to raise another round in the next 24 months, barring some significant, event-driven growth opportunity," Walsh says.

Zoom in: Existing investors Noro-Moseley Partners, KCRise Fund, Revolution's Rise of the Rest Seed Fund and Patterson Thoma Family Office participated in the fundraise.

Catch up quick: Founded in 2012, Cariloop has raised $44 million to date, having raised a $15 million Series B in 2021.

State of play: As baby boomers age in place, the need for caregiving has never been greater and investors are pouring in dollars.

Helpful, an app helping caregivers navigate benefits information, medical records and post-hospital discharge, raised $7.5 million in seed funding.

Family First, a Boston-based employee benefit company that helps families with caregiving needs, raised an $11 million Series A.

Betterleave, a web-based platform that partners with organizations to improve end-of-life care, raised $2.4 million in funding

Blooming Health, a tech platform connecting community-based aging care providers with older patients and their caregivers, raised $4.2 million in seed funding.

2. The BFD: Cariloop corrals $20M for caregivers

Illustrated collage of a healthcare worker and a senior citizen. 

Kimberly-Clark (NYSE: KMB) agreed to sell its personal protective equipment business to Australia's Ansell (ASX: ANN) for US$640 million in cash, Axios' Dan Primack writes.

Why it matters: It wasn't too long ago that America was wringing its ungloved hands over how much PPE manufacturing had moved overseas.

This deal also comes on the heels of a report that Honeywell's PPE unit is for sale.

The bottom line: "Domestic mask producers ... have been left with plants sitting idle, unfinished or operating below capacity. The industry has also grappled with slack demand in recent years as laboratories, hospitals and clinics built up large stocks of gloves and other PPE equipment during the pandemic that they took time to run down." — Stuart Condie, WSJ

3.  Kimberly-Clark to sell PPE business

Illustration of an open briefcase filled a medical mask, gloves, and hand sanitizer

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

• Log My Care, a British home care company, raised an unlabeled £3m from insider Mercia Ventures. axios.link/3vIItp4

• Neurava, an Indianapolis-based medical wearable device developer, raised a $2.3m seed led by Life Science Angels with support from UCB, Purdue Innovates, Elevate Ventures, Rivermount Ventures and First Leaf Capital. axios.link/3U9hyvW

• CoreRx completed its $130m purchase of Societal CDMO, a Gainesville, Ga.-based contract development and manufacturing organization focused on small molecule therapeutics. CoreRx backers include Juna Equity Partners, QHP Capital and JVC Investment Partners. axios.link/3xm9gYA

• Martis Capital-backed Alcanza Clinical Research, a Lake Mary, Fla.-based investigator site network, acquired Palmetto Bay, Fla.-based clinical research center Innovation Medical Research Center. axios.link/3JdpZ3e 

• Merck acquired Abceutics, an antibody-drug conjugate safety company, for upwards of $208m (including earnouts). axios.link/4cLJVHP

• AlleyCorp, a NYC-based venture firm, raised a new $250m fund. axios.link/3JdgbWO

4. Deals o' the day

• Daniel Hawkins, former CEO of Avail Medsystems, joined Vista.ai as CEO. axios.link/49scLds 

• Andy Copilevitz, former CEO of MDLive, joined Premier Radiology Services as CEO. Drew Gaudet, Premier's founder and former CEO, became chief growth officer. premierradiologyservices.com/

• Bruno Morel joined Premier Health of America as CTO, succeeding current CTO Éric Dupont. axios.link/3xu6e4E

• Michael Schwartz, former managing director at Lazard, joined Houlihan Lokey as managing director in its capital markets group. hl.com

• Dan Davidson, former president of Galen Mental Health, joined Brentwood Capital Advisors as a managing director focused on health care. axios.link/4akOLKE

• Helena Day Christianson, former chief people officer at Quantum Metric, joined Aledade as chief people officer. aledade.com

• Dianna Budgeon was promoted from EVP of operations to chief operating officer at Found. joinfound.com

• Kevin Sowers, president of Johns Hopkins Health System, joined Apella's board. apella.io

• Frank Williams, former Evolent Health CEO, was hired as a partner at Define Ventures. definevc.com

5. It's Personnel

➖ Assisted living managers say algorithm prevented needed hiring — WaPo

👁️ Scoop: House eyes telehealth extension as next big goal — Axios

🏥 In battle over health care costs, PE plays both sides — NYT

👵 HCA reports almost $1B more in charity care to Medicare than to its shareholders — Stat

🤖 Harnessing AI to bridge care disparities — Forbes

6. Your daily dose

illustration of a digital thermometer that reads "daily dose" 

It's Tuesday, Health Tech fans. Hope you all survived the eclipse.

🏀 Aaron played basketball for the first time in months and was thrilled to be back out on the court. 

🌑 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.

April 09, 2024

1 big thing: General Catalyst led 6 top Q1 health deals