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BFD Expert Voices - Health Tech Deals

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Clario, a Nordic Capital and Astorg-backed software provider for clinical trials, confidentially filed for an IPO, Bloomberg reports, citing sources familiar.

Why it matters: Clario is reportedly targeting a $10 billion-plus valuation as the health care IPO market starts to warm up.

Zoom in: Clario is targeting early 2025 for its listing and is working with underwriters JPMorgan, Morgan Stanley, Jefferies and UBS.

Clario is generating about $1.1 billion, with EBITDA of $400 million, per Bloomberg.

How it works: The Philadelphia-based company's software helps drug developers and researchers collect and analyze data to plan and manage clinical trials.

Clario has worked with pharmaceutical firms, biotechs and medical device companies on 26,000 clinical trials that have led to 800 drug approvals.

Catch up quick: Clario was created from the merger of Nordic Capital, Astorg and Novo Holdings-backed ERT and Cinven-owned BioClinica, closed in 2021.

The company generated roughly €905 million of revenue in 2023, per Nordic Capital.

The big picture: Pharma services is a hot spot for private equity in particular, and established firms like EQT, ArchiMed, GHO Capital, Ardian, Linden Capital, Ampersand Capital and Frazier Healthcare Partners are seeing increased competition for deals.

"The past decade has seen industry trends converge to make the space increasingly attractive, and over the past two years, pharma services has become the hottest area of PE health care investing," PitchBook analyst Rebecca Springer writes in a recent report.

💭 Aaron's thought bubble: If this listing is successful, the market could see the private equity exit backlog ease, with pharma services and clinical trial management companies leading the charge.

What we're watching: Earlier this year, GHO Capital started prepping its portfolio company Velocity Clinical Research, a clinical trial services provider, to come to market.

Drug trial software player Clario files for IPO

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Employer-facing alternative health insurance provider Sidecar Health raised a $165 million Series D led by Koch Disruptive Technologies, CEO Patrick Quigley tells Axios exclusively.

Why it's the BFD: As surprise medical bills continue to trouble patients and providers, Sidecar offers consumers more transparency in exchange for a little advanced legwork.

Zoom in: New investors including a state pension fund and Duke University joined, alongside existing backers GreatPoint Ventures, Bond, Cathay Innovation, Drive Capital, Menlo Ventures and Morpheus.

Funds will fuel the company's expansion from Ohio and Georgia into Florida.

"We raised enough that we are never going to need to raise another round," says Quigley, who says Sidecar is insurance product profitable and EBITDA profitable.

How it works: The Los Angeles-based company encourages employees to choose their health care providers and procedures based on obtaining price estimates for procedures and annual checkups beforehand.

"We coach our members to understand what their benefits are before they engage with their health care system," Quigley says.

After getting care, patients pay their provider directly. One option to do so includes using the Sidecar Health Visa benefit card.

When a patient submits a bill estimate to Sidecar, the company lets them know whether the cost is greater or less than the amount Sidecar will cover as a benefit. If it's greater, they are responsible for the difference. If it's less, they split the savings with Sidecar.

The latest: Founded in 2018, Sidecar currently serves employers headquartered in Ohio and Georgia across 44 states, and its average customer age is 44.

The company does not operate in the Affordable Care Act marketplace.

What they're saying: "People don't really understand coinsurances and copays, never mind deductibles, and people end up with surprise bills," says Quigley.

Flashback: Sidecar in 2021 offered a type of insurance similar to what's known as indemnity insurance, which was criticized because of its non-comprehensive nature. Called the Access Plan, that product is no longer available, per Quigley.

State of play: Insurtechs have faced mixed results on the public markets, with one major player exiting the insurance game altogether and another failing to turn a profit for years.

Oscar Health (NYSE: OSCR) went public in 2021 and did not turn a profit until May, when it reported its first profitable quarter in over a decade.

After a 2021 IPO that saw it sustain massive operating losses and ultimately abandon the insurance business, struggling NeueHealth (FKA Bright Health) pivoted to consumer care.

Sidecar fuels up with $165M for insurance

Illustration of a long, winding road with red health crosses painted down the middle as lane dividers

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

• Form Health, a Boston virtual obesity care company, raised a $38m Series B led by Sound Ventures and joined by M13, SignalFire and Next View Ventures. axios.link/3VELzU2 

• Sensi.AI, a Silicon Valley provider of home care-focused audio technology for detecting and predicting care events, raised a $31m Series B funding led by Zeev Ventures and Insight Partners, with participation from insiders Entrée Capital, Flint Capital, Jibe Ventures, and Secret Chord Ventures. axios.link/4eHBgXK

• Heyday Health, an Ohio value-based hybrid care provider for seniors on Medicare and Medicaid, raised an unlabeled $12.5m from Gradient Ventures, Lionbird, Great Oaks Capital and Maven CEO Kate Ryder. axios.link/4cVkuTF

• Invi MindHealth, a Denver telemental health startup, raised a $1.5m seed. axios.link/3VCIIuJ

• TPG invested ~$200m from its Rise Fund into Foodsmart, a SF food-as-medicine startup. foodsmart.com

• NMS Capital-backed Flourish Clinical Research, an NYC clinical trial organization, acquired Encore Research Group, a Jacksonville, Fla., clinical research site network. flourishresearch.com

• Atalaya Capital Management, an NYC alternative investment advisory firm, made an investment in CipherHealth, an NYC provider of patient communication tools. axios.link/4bjRIun

• Vizient, an Irving, Texas, health care analysis and performance improvement company, agreed to exercise its option to buy the remaining interest in Kaufman Hall, a Chicago health care management consulting firm, from majority holder Madison Dearborn Partners. axios.link/3RHNaY0

• Renovus Capital Partners-backed ToxStrategies, a Katy, Texas, scientific consulting firm, acquired Clintrex Research Corporation, a Sarasota, Fla., provider of preclinical, clinical trial, operational and regulatory assistance tools. axios.link/4chd9xG

• The American Heart Association launched a $75m venture fund called Go Red for Women with $40m from the Association and $15m from philanthropist Sarah Ross Soter. axios.link/3L0lR7k

Deals o' the day

• Scott Sears, former chief medical officer at IMA Medical Group, joined Honest Medical Group as chief physician executive. axios.link/4bimmEK

• Terence Finn, former VP of product at Olive AI, joined Scale Healthcare as head of product. axios.link/4cCAGsI

• Cindy Xiong and Hyung Chun were promoted to partners at Foresite Capital. foresitecapital.com

It's Personnel

🧪 Ex-Meta experts at biotech offer tool to make new molecules — Axios

💵 Andreessen Horowitz isn't really expanding into private equity — Axios

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📺 Aaron is nearly finished with the latest season of Netflix's "Perfect Match" and feeling grateful to have found his perfect match. 

💑 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.

1 big thing: Drug trial software player Clario files for IPO

2. The BFD: Sidecar fuels up with $165M for insurance

3. Deals o' the day

4. It's Personnel

5. Your daily dose

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June 26, 2024

1 big thing: Drug trial software player Clario files for IPO