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BFD Expert Voices - Health Tech Deals

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You made it to Thursday, Health Tech readers.

Notable Systems, an automated document processing company, raised an $8.8 million Series A, CEO Steve Johnson tells Axios exclusively.

Why it matters: The risk of errors during manual data entry has driven funding to companies automating the process.

Zoom in: Grotech Ventures led the round, with participation from Colfax Corporation and private individual investors.

How it works: Focused on the durable medical equipment (DME) industry, Notable's AI platform extracts data from medical and financial documents.

The tool can identify page types and categorize and index documents for processing.

It can process product orders, patient records, progress reports, physician notes and insurance claims.

"I am certain that we can take over the DME market within the next 12 months," Johnson says,

What's next: The long-term plan is to enter other markets, including health insurance.

Johnson says the company should be at breakeven by the year's end.

"Then we'll have a choice, whether to go raise more money and grow faster or just keep growing organically," he adds.

Notable is generating revenue and this funding gives it a runway into next year.

State of play: Companies using AI to reduce manual data entry and administrative tasks in health care have drawn venture funding recently.

Synthpop, a startup using large language models to automate administrative tasks for clinicians, raised a $5.6 million seed round in June.

Daffodil Health, which uses AI to automate health care pricing, raised a $4.6 million seed round in May.

Alaffia, a health plan claim operations software and tech company, raised a $10 million Series A in April.

Notable Systems snags $8.8M

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Oncology network Florida Cancer Specialists is fielding buyout interest from McKesson, Cencora and Cardinal Health, Bloomberg reports.

Why it's the BFD: Drug distributors have been looking to strengthen their cancer care services partly to bolster the distribution of lucrative specialty drugs.

By the numbers: Florida Cancer Specialists provides value-based oncology care via around 100 locations, and reportedly could be valued at more than $3 billion.

The 40-year-old, privately held company employs more than 250 physicians and 280 nurse practitioners and physician assistants.

Context: Cencora, part of AmerisourceBergen, last year partnered with TPG to buy OneOncology for $2.1 billion from General Atlantic.

McKesson acquired US Oncology for about $2.2 billion in 2010 from Welsh, Carson, Anderson and Stowe.

Several private equity-backed oncology rollups have changed hands in the last five years, including Verdi Oncology and American Oncology Network.

The intrigue: Florida Cancer Specialists founder William Harwin last year pleaded guilty to his role in an antitrust conspiracy.

The scheme allowed the company and another group to operate with limited competition in Southwest Florida from 1999 to September 2016, per the Justice Department.

What we're watching: The future of Integrated Oncology Network —recapped by Silver Oak Services Partners in 2018 — which is one of the last pure-play, PE-backed oncology platforms standing.

Florida Cancer Specialists, McKesson, Cencora and Cardinal did not respond to a request for comment.

A $3B-plus oncology play 

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Private credit lenders and Wall Street banks are in a heated battle for mergers and acquisitions business as deal supply remains significantly below financing demand.

Why it matters: The intense competition has led to loose financing packages that could cause trouble if the frothy market turns.

By the numbers: The Federal Reserve has said that leverage levels that exceed six times EBITDA "raises concerns for most industries."

Lenders, especially private credit firms, are stretching that ratio in the current climate.

"The amount of nine and 10 times leverage structures I've seen in the past month is astonishing," a senior banker tells Axios. "It's a food fight."

3. Wall Street's battle with private credit hits fever pitch  


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

• Freshpaint, an SF-based health care privacy platform, raised $30m in a Series B round led by Threshold. Go deeper

• Q Bio, a Palo Alto medical imaging technology startup, raised a $27m strategic funding round from new investor TELUS Global Ventures and insiders Khosla Ventures, Andreessen Horowitz, Founders Fund and Kaiser Foundation Hospitals. Go deeper

• Thoughtful AI, an Austin, Texas, AI health care revenue cycle automation company, raised a $20m Series A, led by Drive Capital with participation from TriplePoint Capital. Go deeper

• Juno, a Wilmington, Del., child disability insurance benefit startup, raised a 
 $8.5m Series A funding led by Spero Ventures with participation from Floating Point, Newark Ventures and WVV Capital. Go deeper

• Astor, a woman-focused financial wellness app, raised $1.4m from Stellation Capital, TMV, NFX, and MBA Fund. Go deeper

• Advent International, Clayton Dubilier & Rice and PAI Partners each submitted first-round bids for Sanofi's (Paris: SAN) consumer health unit, which could fetch up to €15b, per Bloomberg. Go deeper

• MBK Capital and Unison Capital-backed Osstem Implant, a South Korean dental implant maker, is in advanced talks to buy Florida-based rival ZimVie (Nasdaq: ZIMV), per Bloomberg. Go deeper

• Ardent Health, a Nashville-based operator of acute care hospitals, raised $192m in its IPO. It priced 12m shares at $16, versus plans to offer 14.3m at $20-$22. It will list on the NYSE (ARDT), while backers include Ventas (NYSE: VTR) and Equity Group Investments. Go deeper

4. Deals o' the day

• Erik Wexler, COO at Providence, was promoted to president and CEO, effective Jan. 1, 2025. Go deeper

• Bryan Haardt, former lead of digital therapeutics and prescription digital therapeutics at Boehringer Ingelheim, joined Eyenuk as CEO. Go deeper

• Joel Anderson, previously CEO of Five Below, joined Petco Health and Wellness Company (Nasdaq: WOOF) as CEO and member of the board. Go deeper

• Hari Arul, co-founder of health tech company Bold, joined Khosla Ventures as a venture partner. Go deeper

5. It's Personnel

👀 Health care after a Trump victory — Axios

🇺🇸 Trump VP pick J.D. Vance's health care views and investments — STAT

💸 45 percent of Americans unable to afford or access health care — The Hill

🤝 GoodRx teams with Boehringer on Humira biosimilar — Axios 

6. Your daily dose

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🐶 Aaron is looking forward to taking care of Roman for the next week, the Great Pyrenees who's a very good boy!

💞 Thanks for reading, and extra thanks to newsletter editor Claire Rychlewski and copy editor Mickey Meece. Please ask your colleagues, friends and family to sign up.

1 big thing: Notable Systems snags $8.8M

2. The BFD: A $3B-plus oncology play

3. Wall Street's battle with private credit hits fever pitch

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July 18, 2024

1 big thing: Notable Systems snags $8.8M