As the first quarter of 2022 kicks into full gear, several exciting themes have caught the market's attention:
- Fertility / IVF Providers Consolidation Heats Up: Women’s health and FemTech have been areas of growing interest for both public and private investment over the last 18 months. Investments can be broken down largely into two sides: Technology: including consumer engagement platforms, care location and access tools, patient communication, as well as medication delivery and adherence; and Specialist Providers: focusing on broad base women’s health, consulting services, and family planning (including fertility treatment and IVF). On the care delivery side, the market saw a few players expanding rapidly with both organic and inorganic strategies vying for market leading positions in regional markets. Advantia Health, which focuses on providing holistic women’s healthcare, has combined technology with a network of 30+ out-patient facilities to create a blend of in-person and telehealth options for its patients. PE-backed Kindbody, a provider of OBGYN and fertility services intended to improve access to health services for women, has developed a national footprint and raised nearly $150M since its inception in 2018, with a valuation climbing to $550M in its June-2021 series C round. We expect to see continued interest and investment in both the technology and services side of this category in the next few years.
- Expansion of Digital Behavioral Healthcare Platforms: The COVID-19 pandemic has driven rising demand for virtual care generating opportunities for at-home digital health options. This trend of increasing M&A activity across the digital behavioral healthcare landscape is partially consumer driven, as patients demand care options outside of traditional face-to-face office visits. Though the behavioral health market has received plenty of attention and capital from investors over the past few years, digital entrants have still been able to drive fresh interest. Mental health focused startups raised $5.1 billion in 2021, which was nearly double the $2.7 billion raised in 2020, driven in part from government agencies relaxing regulatory and reimbursement roadblocks to digital health platforms as care providers. Additionally, digital health investments have become increasingly attractive as the COVID-19 pandemic has accelerated the adoption of virtual care across healthcare sectors and highlighted behavioral gaps in care in key high-cost populations. These circumstances present unique opportunities for healthcare companies and investors to continue to make strategic digital behavioral health acquisitions.
- Investing to Ease Patient Provider Communication: Recent investments that enhance contact between patients and providers emphasize the increased importance on timely and efficient communication between patients and health professionals. Online digital healthcare applications and programs help alleviate communication pain points health professionals historically have encountered with patient interactions. Key areas of growth in this space include pre-visit screening, confirming accurate historical medical data, real-time symptom reporting, and follow-up surveys and check-ins. As healthcare professionals lean into hybrid models combining in-office and telehealth-based care, patient communication software will continue to play an important role to drive effective patient engagement, therapy adherence, and physician utilization.
Several transactions in February aligned with these themes:
- Kindbody, a fertility company and family-building care company, announced that it has signed a merger agreement to acquire Vios Fertility Institute, a network of fertility clinics, to increase access to patient-centric technology. The transaction brings Kindbody's footprint to 26 clinics with plans to expand to 40 retail locations by year’s end.
- The Fertility Partners, a platform of fertility practices backed by Peloton Capital, announced the acquisition of Ottawa Fertility Centre, a fertility treatment provider. Through this acquisition, TFP expands its presence to 11 IVF clinics and over 20 locations.
- Equip, a provider of virtual, evidence-based eating disorder treatment, announced a $58M Series B funding round, bringing the company's total funding to $75M. The Chernin Group, an early investor in Headspace, led the round and was joined by Tiger Global and General Catalyst, along with existing investors.
- New Directions Behavioral Health, a provider of behavioral health solutions with more than 15 million members nationally, announced its acquisition of Tridiuum, a digital behavioral health company focused on health screening, triaging, matching and online scheduling.
- LifeSpeak, a mental health and total wellbeing platform for employers, health plans, and insurance companies, announced that it has signed a definitive agreement to acquire Wellbeats, a Minnesota-based market provider of an on-demand, software-as-a-service physical wellbeing platform, for up to $92.5M. The acquisition of Wellbeats significantly expands and diversifies the SaaS-based behavioral health and physical wellbeing solutions LifeSpeak can offer its customers and partners.
- Omada Health, a San Francisco-based digital healthcare company that designs and develops online digital healthcare programs for patients with chronic conditions raised $192M in a Series E funding round. The funding round was led by Fidelity Management & Research Company with participation from aMoon, existing investors Perceptive Advisors, Wellington Management, Civilization Ventures, and others. This funding will be used to expand its team and for technological development.
- Wellsky, a provider of health care software solutions, announced the acquisition of TapCloud, a virtual AI-driven patient engagement platform that allows patients to share symptoms and other health data with providers via virtual visit technology and remote symptom screening protocols. The acquisition will strengthen Wellsky’s patient engagement technology.
- ModMed, a Warburg Pincus-backed healthcare technology developer of cloud-based specialty-specific electronic medical record system, acquired Klara, a provider of a platform designed to enable collaboration and communication between healthcare practices and their patients. Prior to the buyout Klara had raised $32M since its inception in 2013.
TripleTree continuously monitors the market to identify the forces and themes impacting the healthcare industry. Thanks for reading and, as always, let us know what you think!
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