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BFD Expert Voices - Health Tech Deals

BFD Expert Voices

PE investment in HCIT inches up

Ōura raises $75M from Dexcom at $5B valuation

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Deals o' the day

It's Personnel

Your daily dose

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While venture investment in health care IT stays stagnant, PE-led deal activity is up and to the right, as of Q3, new PitchBook data show.

Why it matters: Later-stage businesses with a clear cost-saving thesis (e.g. revenue cycle management) will be most successful in securing investments in the months to come.

By the numbers: PitchBook estimates PE closed 78 HCIT deals in Q3, up from 63 in Q2. 

Context: PE firms are "dusting off their well-worn RCM theses and playbooks, resulting in a very crowded buyer universe," with rich transaction multiples, PitchBook analyst Rebecca Springer writes. 

Amid health provider point solution fatigue and difficulty reconciling previously high valuations, VC is focusing on "mission-critical workflows and operational cost centers,"  Springer writes. 

This is pushing venture investors toward solutions automating RCM — also a hot area for private equity buyers.

State of play: RCM for specialty providers, like behavioral, telehealth, oncology and cardiovascular care, is especially attractive for PE, the report says. 

Vista Equity reportedly launched a sale process for Greenway Health back in March, while Veradigm is currently being courted by strategics and PE alike. 

💭 Our thought bubble: It may be a prime time for GTCR to explore an exit for XiFin, an RCM provider for laboratories and diagnostics companies it's held since 2020.

1 big thing: PE investment in HCIT inches up

Ōura received $75 million from Dexcom, inking a partnership that values the Finnish wearable company at $5 billion while giving it access to Dexcom's glucose data.

Why it's the BFD: Startups and tech behemoths have had little success creating non-invasive glucose tracking, leaving consumers stuck with needle sensors and routine health data tracking. 

Zoom in: The two will launch integrations that let data flow between Dexcom glucose biosensors and the Ōura ring, and their respective apps. 

The companies will also co-market and cross-sell each other's products.

What's next: Ōura CEO Tom Hale tells Fierce Healthcare proceeds will go toward M&A.

Ōura acquired movement tracker company Sparta Science in October, following an acquisition of metabolic data tracker Veri the month before.

There are no current plans to take the company public, Hale tells Fierce.

How it works: Ōura's ring uses infrared photoplethysmography sensors to measure indicators like heart rate and respiration. 

The intrigue: "There's certainly going to be a large number of folks who are pre-diabetic who would fit into the category of people who might be interested in this combined solution," Hale tells Fierce.

Most Americans are not in optimal metabolic health, and about 98 million American adults have prediabetes.

State of play: Wearable incumbents are increasingly seeking to incorporate metabolic data.

Fitbit launched a partnership with Quest Diagnostics to garner insights on how to assess and prevent metabolic disease. 

Apple is testing a new blood-sugar product with its new ring to be released next September. The G7 continuous glucose monitoring system is compatible with the Apple Watch.

Flashback: Dexcom had a partnership with Verily, Google's health unit that's in the process of being separated from the tech giant, back in 2020.

It's unclear where those efforts are now. 

Reality check: Today's deal prompts the familiar question of whether slow biotech research timelines can jive with the "move fast, break things" pace of health tech. 

So far, only the Apple Watch has managed to make the marriage work.

The bottom line: Ōura is continuing to shore up its data sources before Apple debuts its competing ring. 

acquired movement tracker company Sparta Science

2. The BFD: Ōura raises $75M from Dexcom at $5B valuation

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

• Zenflow, an SF-based developer of minimally invasive devices for benign prostatic hyperplasia, raised a $24m Series C led by Cook Medical with participation from insiders Invus Opportunities, F-Prime Capital and Medical Technology Venture Partners. Go deeper

• Citizen Health, an SF consumer health platform for patients with rare conditions, raised a $14.5m seed led by Transformation Capital and joined by Wavemaker 360. Go deeper

• Jimini Health, an NYC AI-supported mental health care platform, raised an $8m pre-seed from Zetta Venture Partners, LionBird and PsyMed. Go deeper

• ThoroughCare, a Pittsburgh-based care coordination company, raised a $5m Series A led by Empactful Capital. Go deeper

• Cytomos, a British developer of cell analysis tech, raised £5m led by Archangels and was joined by Old College Capital, Scottish Enterprise and British Business Bank. Go deeper

• Heim, a U.K. provider of home health care software, raised a £2.2m seed round led by Heal Capital, with participation from Form Ventures, Portfolio Ventures and Houghton Street Ventures. Go deeper  

• Safecor Health, a Vesey Street Capital Partners-backed pharmaceutical packaging company, acquired pharma company Viatris' (Nasdaq: VTRS) U.S. unit-dose packaging business. Go deeper

• L Catterton invested in WeVets, a Brazilian independent veterinary hospital group operating 24-hour centers and diagnostic labs. Go deeper  

• Initiate Ventures, a new VC firm led by Jessica Owens (co-founder of Grail, ex-Kleiner Perkins) and Iana Dimkova (GE Ventures), raised $45m for its debut fund. Go deeper

3. Deals o' the day

•  Mark Avagliano, former chief business officer at G1 Therapeutics, joined Georgiamune as chief business officer. Go deeper

•  Michelle Carnahan, president at Thirty Madison, joined Oviva's board of directors. oviva.com/uk/en/

4. It's Personnel

⚔️ RFK Jr. vs. Vivek: Trump world's two paths for pharma regulation — Axios

💉 Employers get pressure to pay for drugs like Wegovy — WSJ

👀 For-profit hospices increasing despite poor performance  — Medical Xpress

💸 Medicaid fuels U.S. coverage of Novo, Lilly weight-loss drugs  — Reuters

🏛️ House staffers to watch on health care — Axios

🧬 Elon Musk asked people to upload their health data. X users obliged — NYT

November 19, 2024

1 big thing: PE investment in HCIT inches up