NGP Digital Health Newsletter

Welcome to the Digital Health Newsletter by NGP Capital, where we cover industry news, financing and exits in the Digital Health sector.


Big tech power players prioritizing Digital Health

While several themes dominated headlines in August, big tech’s growing involvement in Digital Health seems most pressing.

From six giants pledging their commitment to healthcare interoperability, to Alphabet’s jaw-dropping investment in insurer Oscar Health, to a reflection on the major ways in which Facebook is embracing Digital Health, it remains clear that tech’s power players are prioritizing this field.

While exciting, keeping tabs on their progress will be key, as large organizations – even those with the most innovative of missions – are often slower to act than the nimble upstarts their efforts support.

 

Mega-rounds of Digital Health financing

Digital Health financing closed the summer strong, with significant mega-rounds coming from Peloton’s $550M raise and Oscar’s $375M investment from Google.

Peloton, which expects to go public as early as 2019, reports it is on track to meet its $700M revenue target for this year, and acts as a poster child for the rapidly-growing boutique fitness space. Meanwhile, Google’s investment in Oscar has sent a wave of optimism through the health insurtech space: while opponents have criticized new underwriters such as Oscar and Clover for failing to gain widespread traction, these leaders maintain that disrupting insurance will be a long-term play. Google’s near-$400M investment signals its own faith in Oscar’s future success, further insinuating that patience will be key in this space.

  • Naked Labs, manufacturer of a turntable scale and smart body-scanning mirror, raised a $14M Series Aled by Founders Fund with participation from NEA, Lumia Capital, Venture 51, and Seabed VC.
  • *Peloton, a startup that makes web-connected home fitness equipment and content, raised a $550M round led by TCV with participation from Kleiner Perkins, Tiger Global Management, and GGV Capital, valuing the company at over $4B; the company stated this was its last fundraise before its planned 2019 IPO.
  • Personalized supplement company Care/of raised a $29M Series Bled by Goldman Sachs Investment Partners, with participation from Goodwater Capital, Juxtapose, RRE Ventures, Tusk Ventures, Beth Kaplan, and Dough Hudson.
  • Digital therapeutics company Akili Interactive Labs announced an additional $13M to its previous $55M Series C financing, bringing the round total to $68M.
  • Hinge Health, a musculoskeletal digital health platform, raised a $26M Series B led by Insight Venture Partners; existing investor Atomico also participated.
  • *New York City-based Capsule, a day-of-delivery pharmacy, raised a $50M Series Bled by Thrive Capital and Brook Capital Partners.
  • EHR integration startup Sansoro Health, a healthcare integration company, raised an $8M Series B led by LRVHealth with participation from existing investors Bain Capital Ventures and Healthy Ventures.
  • *Profusa, a company that is developing connected tissue-implanted biosensors, raised over $45M in Series C funding from VMS, Tasly Pharma, Maxim Integrated (all new), 3E Bioventures, and Atinum Investment (returning).
  • Israeli-based Carbyne, which seeks to digitally update emergency response systems,raised a $15M Series Bround led by Elsted Capital Partners with participation from Founders Fund.
  • *Google’s parent company Alphabet invested $375M in Oscar Health, a digital-first health insurance company, to help it expand to the Medicare Advantage market; Alphabet has been a longtime supporter of the company through previous investments.
  • BioBeats, which uses AI to deliver digital wellness support to consumers and employers, has raised a $3M round led by Oxford Sciences Innovation, White Cloud, and IQ Capital.
  • Healthera, a UK-based platform that enables patients to manage their medication and has connected to over 800 pharmacies, announced a $3.8M Series A led by Accelerated Digital Ventures.
  • Klara, a healthcare communication platform, raised a $11.5M Series Aled by FirstMark Capital; other participating investors include Lerer Hippeau, Project A Ventures, and Atlantic Labs.
  • Freeletics, a European fitness clothing line and line of training apps, announced a financing (amount not disclosed) from Courtside Ventures, Elysian Park Ventures (affiliated with the LA Dodgers), Causeway Media Partners, JAZZ Venture Partners, and ward.ventures.
  • RDMD, whose platform has built a database for rare diseases through aggregating personal health records,raised $3M in seed financing from Lux Capital, Village Global, Garuda (First Round’s healthcare co-op), and Shasta Ventures.
  • San Francisco-based Sempre Health, which encourages healthy behavior of its users through monetary incentives, raised an $8M Series A round led by Rethink Impact with participation from other investors such as Social Capital.

 

Digital Health exits accelerating

Exits picked up noticeably in August. WebMD maintained its recent streak in an attempt to grow its provider directory, and telemedicine, behavioral health, and engagement platforms all continued to see continued activity.

Most notable, though, is Best Buy’s acquisition of GreatCall for $800M: while not quite unicorn status, this investment elucidates the electronics retailer’s strong thesis in the eldercare space. We expect investment activity – both new financing and successful exits – will continue for this growing market.

  • *GreatCall, a mature digital health company that makes a suite of connected safety products for the aging population, was acquired by Best Buy for $800M; the retailer has cited a larger strategy to invest in tech for the 65+ market through 2020.
  • WellBrain, which focuses and addiction prevention and chronic pain management through a meditation lens, acquired Mevoked, a behavioral analytics platform that offers a digital platform for perinatal and postpartum mental health conditions; deal terms were not disclose.
  • SOC Telemed announced its acquisition of behavioral health telemedicine company JSA Health; deal price and terms were not disclosed.
  • Mediware, a leading supplier of health and human services software, acquired its business partner Rock Pond Solutions, and business intelligence and analytics software provider for the home medical equipment (HME) and specialty pharmacy space.
  • Harris Healthcare acquired Iatric Systems, manufacturer of technology for medical device connectivity and security, for an undisclosed sum; it will run the company as an independent business.
  • *Large deal ($30M+ raise, $200M+ exit) 

A focus on Digital Transformation – NGP Capital's 4th annual World of Connections conference

We are delighted to announce our 4th annual World of Connections conference. World of Connections is an invitation-only event assembling 300 entrepreneurs, innovators, VCs, and technology leaders creating the Connected World. This year, the conference is focused on Digital Transformation. See the latest speakers and conference program on the event website.

We will have several sessions on the following subjects:

  • Physician and Caregiver Burn-Outcan technology and automation can help address some of the contributing factors such as administrative, regulatory, and compliance related overhead?  Can technology and automation allow implementation of more robust patient engagement with out adding to physicians' already overwhelming workflows?
  • Employer Activism in Healthcare: Beyond the Amazon-Berkshire-Chase Joint Venture: How Large Employers Across the Country and Across the Globe Are Taking Direct Control of Employee Health and Wellness
  • The Rapidly Evolving Role of Payors in the U.S. HealthCare SystemNew Models, New Entrants and Established Player Strategies

Join fellow healthcare thought leaders from BlueCrossBlue Shield(s), UCSF, Stanford, UPMC, Merck, Humana, Allianz, Walmart, P+G, Cleveland Clinic, Sandbox Ventures; Venrock; Health Velocity Capital; Canvas Ventures, IBM Watson Health, Anthem, and many others.

Visit event website