Q1 2021 Health IT/Digital Health PC/VE, M&A, IPOs/ SPACs Activity
The first quarter of 2021 has been one of investor optimism as the vaccine rollout continues ahead of expectations and economic activity begins to accelerate in response. Within the Health IT industry, the already strong investment and M&A trends seen in 2020 have only accelerated. Over the course of the quarter, we observed $7 billion in private equity and venture capital investment across 158 companies.
By comparison, Q1 of 2020 saw $3.2 billion and 127 investments. Health IT M&A activity has also been strong in the first quarter, with 114 transactions observed compared to just 88 in Q1 of 2020. The gradual loosening of pandemic restrictions and government stimulus both promise to continue to fuel this strong market activity into Q2 and into the future.
Haven disbanded in February. The joint venture between Amazon, Berkshire Hathaway, and JP Morgan Chase was founded in 2018 to revolutionize how health insurance was managed and disrupt the healthcare industry. The three founding companies are expected to take lessons from the venture to continue to innovate individually and collaborate informally.
UnitedHealth’s OptumInsight agreed to acquire Change Healthcare for approximately $8 billion and to assume $5 billion of Change Healthcare debt. The combination is expected to help improve clinical decision support at the point of care, reduce administrative waste, and enable transactional connectivity across the healthcare system.
A coalition of Health and Technology Industry leaders announced the Vaccination Credential Initiative (VCI), in an effort to create a trustworthy, verifiable, and universally recognized digital record of vaccination status worldwide to safely enable people to return to work, school, events, and travel.
HHS Protect further solidified itself as the single source of truth for national COVID-19 patient information, hospitalization levels, hospital capacity, critical equipment supplies, and staffing. Alexis C. Madrigal, co-founder of the COVID Tracking Project, penned an enlightening op-ed in The Atlantic voicing strong support for the system emphasizing the improved quality and granularity of data available after the system was put in place.
The HHS announced a synthetic data challenge to further cultivate Synthea, an open-source synthetic patient generator that models the medical histories of synthetic patients. Synthetic patient data promises to facilitate patient-centered outcomes research by increasing the availability of data and complementing the use of real clinical data.
Amazon announced that Amazon Care will be rolled out nationwide over the summer and will open access for other employers to offer the service as a workplace benefit.
Noteworthy M&A transactions during the quarter include:
PatientPoint acquired Outcome Health to create a platform offering tech-enabled patient engagement solutions that create more effective doctor-patient interactions across the entire patient care journey.
MultiPlan Corporation completed the acquisition of Discovery Health Partners, an analytics and technology company offering healthcare revenue and payment integrity services. With the acquisition, MultiPlan strengthens its service offering in the payment integrity market with new and complementary services to help its payor customers manage the overall cost of care and improve their competitiveness.
Philips announced an agreement to acquire provider of medical device integration and data technologies, Capsule Technologies, for $365 million to transform the delivery of healthcare along the health continuum with integrated solutions.
OptumInsight and Change Healthcare have agreed to merge. Change Healthcare will join with OptumInsight to provide software and data analytics, technology-enabled services and research, advisory, and revenue cycle management offerings to help make health care work better for everyone.
Noteworthy Buyout transactions during the quarter include:
LLR Partners invested in Azalea Health, a rapidly growing provider of cloud-based electronic health record and patient engagement solutions for inpatient and outpatient community health organizations.
Lightbeam Health Solutions received a strategic investment from Primus Capital.
Noteworthy Investments during the month include:
Ro, a vertically integrated primary care telemedicine platform, raised $500 Million in Series D Funding with the intent to expand its pharmacy distribution network, enhance its proprietary EMR, and broaden into additional treatment areas.
Komodo Health secures $220 million in funding led by Tiger Global Management to accelerate investment in its enterprise technology platform designed to help the world’s leading life sciences companies, health plans, and patient advocacy groups improve patient engagement and address unmet patient needs.
Unite Us announced a $150 million Series C financing led by ICONIQ Growth at a valuation of $1.6 billion. The company will use the funds to continue its mission of connecting social care and medical care.
BrightInsight raised $101 million in Series C funding led by General Catalyst to expand its team and further differentiate its development platform for regulated software, connected devices, drugs, and digital therapeutics.
WeDoctor, a telemedicine provider based in Hangzhou, raised $400 million in a pre-IPO round valued at $6.8 billion with investors such as Sequoia Capital China and Millennium Management participating.
Innovaccer raised a $105 million Series D at a $1.3 Billion Valuation, launching Innovaccer Health Cloud, a platform-as-a-service to enable customers and partners to build interoperable applications that improve patient engagement and operational performance.
Health insurtech company Sidecar Health raised $125 million in its Series C at a valuation of $1 billion. The funds will be used to launch a new Affordable Care Act offering for federal and state exchanges.
Noteworthy IPOs/ SPACs during the quarter include:
LumiraDx, a Next-Generation Point of Care Diagnostics Testing Company to List on Nasdaq via Merger with CA Healthcare Acquisition Corp
About Healthcare Growth Partners (HGP)
Healthcare Growth Partners (HGP) is a Houston, TX-based Investment Banking & Strategic Advisory firm exclusively focused on the transformational Health IT market. The firm provides Sell-Side Advisory, Buy-Side Advisory, Capital Advisory, and Pre-Transaction Growth Strategy services, functioning as the exclusive investment banking advisor to over 100 health IT transactions representing over $2 billion in value since 2007.