WTM Bulletin #1: From Wall Street to Care Street. Latest news in Health Care VC, PE, and care delivery. Innovation. Transformation.
As a former Citigroup investment banker and economist turn Medical Doctor, entrepreneur, consultant, and investor, I see health care evolve and transform through a unique set of lens.
Sitting at the intersection of health, technology, and business with functional roles as an executive in strategy, business development, partnerships, and innovation, I’m eager to share my weekly findings with you — my growing audience worldwide.
6 links = 3 interesting headlines + 2 startup or VC firm news + 1 closing thought. Or some combo there of.
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The Singapore skyline always makes me smile, which is why I’m posting it here. It reminds me what the potential is for any nation, even one without natural resources, on the world stage. They have one of the best health care systems in the world, the best investment vehicles in the world (Temasek), and one of the most open and digital leaders in the world: Lee Hsien Loong, Prime Minister.
Headlines in Health Care:
1. Researchers have discovered a potential new form of “on-demand” birth control for women. Experts from Stanford University had “promising results” when using a combination of the morning-after pill and an arthritis drug to “disrupt ovulation at peak fertility.”
2. A woman tested positive for colon cancer on an at-home test from LetsGetChecked. Her doctor dismissed the result — then hospital tests confirmed a tumor: Stage 3 Colon Cancer.
For context, to date LetsGetChecked has raised $265M, with a Series D of $150M in May 2021 led by Casdin Capital, with follow on investment from Transformation Capital, Illumina Ventures, HLM Venture Partners, Optum Ventures, and interestingly golfer Rory McIlroy.
3. CDC estimates 3 in 4 kids have had coronavirus infections
Startup profile:
Eleos Health: transforming behavior health through AI. By integrating and automating the care workflow end-to-end, they free up clinicians time to do what they do best, care for their patient. [Personally my favorite part, as a Doctor]. By promoting provider wellness and reducing administrative burden, they’re enhancing the provider experience to appropriately deliver data-driven insights to their patients and each other. When providers feel equipped and empowered, patients do too, resulting in better health outcomes and delightful health care experience.
- It’s no surprise, because of this compelling value proposition, they raised a $20M Series A from aMoon Fund, co-led by F-Prime Capital and Eight Roads Ventures, with participation from existing investors Lool Ventures and Arkin Holdings. This is following their $6M seed financing.
- Traction: to date, Eleos has captured more than 6.5M minutes of treatment with a goal of 30M minutes by the end of 2022.
- This fresh round of $20M will go towards product development, expanding sales and account service teams, BD, and recruitment of top talent.
- By empowering an under-appreciated and underserved clinical group — behavioral health practitioner with technology, Eleos follows classic disruptive innovation theory, as outlined in one of my mentors, Clayton Christensen, whereby your technology enablers — CareOps Automation — allows practitioners a simpler, affordable, and accessible way to deliver high quality care.
VC Firm profile:
Congratulations to the $350 Million ‘Series C’ for Michael Greeley and Bill Geary’s health tech fund Flare Capital
Flare Capital Partners Announces Close of its Third Fund with $350 Million in Commitments. 65 investments. 25 portfolio companies. 11 exits. 13 investment professionals.
Flare Capital, co-founded by Michael Greeley and Bill Geary, has closed its third fund of $350 Million, one of the largest raises by an early stage independent health tech venture capital firm. Their mission is to reinvent the business of health care, and with this new funding, will enable more investment in amazing founders and entrepreneurs aimed at transforming health care services in a novel way.
Notable news from just a few portfolio companies in the last 6 months include:
- Somatus raised $325M Series E alongside Blue Venture Fund, Inova Health System, Longitude Capital, Optum Ventures, RA Capital Management, Wellington Management. Somatus is revolutionizing kidney care in a transformative way by applying value-based care framework for an end-to-end integrative approach for health systems, health plans, and provider groups.
- Suki.AI raised $55M Series C led by March Capital. Co investors included Philips Ventures, and existing investors Venrock, Breyer Capital, and inHealth Ventures.
- UnifiHealth secured $5.4M seed round led by Anthemis with participation from Echelon, Digitalis Ventures, and Great Oaks VC. UnifiHealth wants to expand the availability of modern health plans for SMBs.
- Elektra Health raised $3.75M seed funding, co-lead by Alexis Ohanian’s Seven Seven Six Ventures and Flare Capital. Elektra Health is a transformative women’s health tech company on a mission to smash the menopause taboo, using evidence to deliver a better experience for women.
I’m personally very excited to see what great startups the Flare Capital investment team will support next. They have an incredible track record but more importantly are just a great group of investors who think methodically, thoughtfully, and rigorously when they decide to back the next-generation of health services companies. They have the perfect mix of LPs from both the financial coffers (ie deep pockets) but more differentiating, the strategic side. This combo puts them in a unique position to truly help back high potential founders, teams that will deliver impact in a complex health care system by helping their portcos align with strategics as partners and potentially, acquirers. They’ve backed one of my favorite health care delivery companies and founders, Iora Health and Rushika Fernandopulle, that I’ve followed for more than 10 years.
Closing Thought:
On the investing front, we’re seeing belt tightening from portfolio companies as interest rates rise in the US, volatility in Ukraine/Russia, as well as a downturn and the great reset of valuations across high growth tech, biopharma, and healthtech. This has impacted late-stage growth companies who had wanted to go public this year or next year. Some speculate down rounds are coming. I believe we will see strategics come in to give these startups an exit, with an acquiescent investor who wants to have an exit/liquidity event and return some money to LPs. Strategics have had access to historically low borrowing rates for the last 5–10 years and wants to put this capital to work.
I believe it will take a few more years to segment out what sort of hybrid care model — a mix of virtual and in-person — is preferred by each population segment. Generally speaking, we know the young healthy group want GSD — Get Stuff Done — care. They want to be in and out for whatever their acute needs might be. They want mobile first, DTC to doorstep, and virtual visits. The elderly still want a high touch experience but also if needed, given the option to have an encounter virtually or DTH, direct to home. Fundamentally we need to meet people where they are but we as a provider and deliverer of care need to do a better job of asking. “What do you prefer today?” and then delivering on that promise. I believe, particularly for the elderly, we can leverage pharmacists and equip them with opportunities to have a high touch meaningful engagement with older people. They often enjoy getting out of their homes and picking up their medicine but enhance the experience with proper workflows so pharmacists can be messengers of comfort, med management pros, and motivation for people instead of glorified, overtrained pill counters. This only contributes to burnout and poor wellness. But I remain confident we will work out these kinks to enhance the experience for each segment while infusing technology in a seamless, automated, and delightful way. Health care is more immune to the geopolitical and public stock volatility we’ve seen in the last 4 months, and remain very optimistic about health care’s continued transformation, innovation, and delivery of value.
Disclaimer: I do not have an equity stake in the above companies. The information presented here does not serve as investment advice. This is for informational purposes only.
Please clap below and feel free to leave a comment and feedback in the comments section below. I read every one of them personally and always enjoy hearing from my audience what you like, don’t like, would like to see more of, less of, etc. We only improve with feedback loops. You can also find me on twitter @Mahek_MD and reach me there as well.
