Welcome back to E&O Mondays, the free newsletter from Exits & Outcomes.
In this issue:
- E&O found about $640 million in announced (and unannounced) funding (equity deals and debt financing) across nearly two dozen deals for the week of November 30, 2020. That’s up from the measly $99 million I found last week.
- I took a quick look at how the rise in digital health and telehealth apparently had some small role in the $27.7B Salesforce-Slack acquisition this week. (Huh?)
- And a new (and hopefully slightly harder — really dialing this thing in) Health Tech Trivia Challenge…
Would it create FOMO if you found out that the CEO of your biggest competitor is already a paying subscriber to E&O? And if they’re not yet a paying subscriber, wouldn’t it be smart to create that FOMO in them? Well, look, there’s no way out now: Head to the pricing page of E&O right here and don’t miss what comes next.
P.S. one of the things that comes next for paying subscribers is a big report on UnitedHealth/Optum and its many, many digital health initiatives.
Salesforce buys Slack for $27.7B and cites telehealth and digital health growth as a factor
Obviously, I spend quite a bit of my Sundays poring through SEC filings to put together this newsletter.
Yesterday, I happened upon this filing from Salesforce about its multi-billion dollar acquisition of Slack that — weirdly — shows the company repeatedly mentioned the rise of telehealth and digital health during the pandemic as one of the macro events that helps make the case for this deal (and its massive price tag).
If you can say — “even healthcare is finally going digital now” — it certainly helps make the point that the world has changed. It’s still odd to see two giant tech firms pointing to digital health as proof that we live in an increasingly digital world, right?
In any case: That’s new.
The filing included transcripts of various interviews that the company conducted last week with the press, in case the Q&As prove helpful to potential investors.
Here’s one quick example:
The Information asked Salesforce COO and President Brett Taylor:
“The price Salesforce paid for Slack seems a little bit high, particularly in light of the earnings report that Slack put out which showed that their growth slowed a little bit in this recent quarter. Can you just kind of give us a sense: Why did Salesforce pay such a premium?”
And the relevant part of Taylor’s answer:
“…But the trend that we really see is this move to this all-digital work anywhere world and where this pandemic, I think really accelerated for a lot of parts of the economy is just the digitization of industries, consumer goods, companies are going to direct consumer, medicine is going to telehealth and digital health faster than ever before…”
To sum up his point: It follows, then, that digital tools that enable remote workforces, etc. etc. are worth quite a bit (maybe even $27.7B in some cases) in this new, ever-digital world.
Taylor pointed to medicine going remote and the rise of telehealth in a few of his other interviews last week, too. It was obviously a talking point for the companies’ media strategy following the deal’s announcement.
Just another signal that, for better and worse, 2020 was a huge step forward for digital health.
This week’s health tech financing deals
OK, wow, a lot of deals this week. I’ll try to keep this brief and skimmable:
These first three deals you almost certainly read about already: Olive AI, Everlywell, and Virta Health each had a big funding announcement in the past week.
Olive AI, which uses artificial intelligence to help hospitals and health systems automate and optimize their employees’ workflows, raised $225.5 million. Tiger Global led and return backers General Catalyst, Drive Capital and Silicon Valley Bank chipped in with a little help from new investors GV, Sequoia Capital Global Equities, Dragoneer Investment Group, and Transformation Capital Partners. Olive is now valued at $1.5 billion. Release
Everlywell raised a $175 million Series D after its $25 million Series C just this past February. That’s a pandemic-driven, meteoric rise in valuation, anyway. New investors include BlackRock, The Chernin Group, Foresite Capital, Greenspring Associates, Morningside Ventures. Return backer Highland Capital Partners also contributed. TechCrunch
The funding round most people emailed me about this past week was keto diet-powered diabetes (and other conditions) reversal company Virta Health‘s $65 million Series D, which Sequoia Capital Global Equities led. Remember: Virta Health raised a $93 million Series C just this past January. (Quick math: 93 > 65.) But the piece that most people glommed onto was Virta’s new valuation post-money: More than $1 billion. These are frothy times in digital health. Super curious to see Virta’s revenue numbers now (so send them my way if you have them). Release
Cleo quietly bumped up its Series B to $31.2 million from the $27 million or so it announced in 2019. Cleo sells health benefits programs, including ones focused on fertility, pregnancy, and return-to-work post-COVID to employers. Site
Click Therapeutics raised $30 million in debt financing from K2 HealthVentures. The company developed software as prescription medical treatments, AKA prescription digital therapeutics. Its first commercialized product isn’t actually Rx-only: A smoking cessation program, called Clickotine. Click’s last equity raise was way back in mid-July 2018 when it raised $17 million led by Sanofi. (I included an item on this on Friday for paying subscribers and left out the year (2018) of Click’s last raise.) Release
This one was pretty well-covered in the press: Proscia, which offers digital and computational pathology services, raised a $23 million Series B led by Scale Venture Partners. Hitachi Ventures contributed too. The company’s tech helps aid cancer research and diagnosis. Release
ConsejoSano quietly raised $17.1 million. Its previous investors include 7wireVentures. ConsejoSano focuses on the Spanish-speaking population in the US and offers a range of digital tools and services to them, including “multi-channel messaging, care navigation, data analytics, and 24/7 access to native-Spanish speaking medical navigators that increases engagement, reduces unnecessary ER visits, and produces better health outcomes for Spanish speakers.” Site
Movano, which is trying to develop a non-invasive continuous glucose monitor (CGM), quietly raised $12 million in debt financing. Non-invasive CGM has been something of a quixotic venture in digital health for many years. The company lists Ruben Caballero, a former Apple VP and current exec focused on hardware engineering at Microsoft, as one of its board members. More on the exec team here.
Third Eye Health, post-acute telehealth network focused on reducing unnecessary hospital readmissions that works closely with skilled nursing facilities (SNFs), raised $9.7 million in a mix of debt and equity financing. (I only recently heard the term “SNFs” said out loud, like “sniffs”, and now I have a favorite healthcare jargon acronym.) Site
France-based Kayentis, which offers an electronic clinical outcome assessment (eCOA) platform for clinical trials, raised $8.3 million. Return backers Extens and LBO France led the round, while a new investor, Bpifrance, also chipped in. Release
Laguna Health, a stealth digital health company founded in April 2020 that is building a digital rehabilitation program to prevent unnecessary readmissions, raised $6.6 million. A recent job ad for Laguna shared that the company “focuses on the entire end-to-end patient recovery process: from the moment someone steps out of the hospital to full rehabilitation.” Interestingly, it self-describes as a “digital health insurance company” in some of its marketing. San Francisco-based Yoni Shtein is the CEO & Founder of Laguna, but the rest of the team appears to be in Israel. Site
Onc.ai, which is developing a cancer care management offering, raised $6 million in a round co-led by Blue Venture Fund and Accomplice along with contributions from KdT Ventures, Digitalis Ventures, and a long list of angels. Release
uMed, a digital health company that builds registries for clinical trials and helps support remote data collection for trials, raised about $5 million. AlbionVC, Delin Ventures, and Playfair Capital all contributed with a little help from 11.2 Capital. MobiHealthNews
Presidium Health, which provides in-home care to medically complex patients using a tech-enabled platform, quietly raised $5 million. Site
Meru Health, an online mental health provider with in-network coverage for Cigna and Humana members, raised $4.8 million in debt financing. Site
MedArrive, which is a house call service that sends an EMS provider to the home but then loops in a physician via telehealth during the in-home visit, raised $4.5 million. MedArrive is backed by Redesign Health. This seed round was co-led by Kleiner Perkins and Define Ventures. Its founders are Dan Trigub (ex-Uber Health) and Inna Plumb. Release
Folx Health, a digital-native health platform designed specifically for the Queer Community, raised $4.4 million from Define Ventures, Bessemer Venture Partners, and Polaris Partners. Crunchbase News
AceAge, a Canadian digital health startup that offers a tech-enabled medication dispenser and personal health assistant named Karie, raised $3.9 million. Release
Neuroglee, a new prescription digital therapeutics startup, raised a $2.3 million pre-seed round. Japan pharmaco Eisai led the round and Biofourmis CEO and Founder Kuldeep Singh Rajput contributed too (Neuroglee is his brother’s company). Singapore-based Neuroglee, which has an initial focus on Alzheimer’s, intends “to treat patients in the early stages of the disease.” TechCrunch
Segmed, which curates medical data by anonymizing, standardizing and labeling it so its customers can use it in research, raised a $2 million seed round led by Blumberg Capital with participation from Nina Capital. Release
FleetNurse, a site that offers on-demand staffing services to healthcare facilities, raised $841,000. Site
Actuate Health, a biosensor and digital health startup currently focused on diagnostic, therapeutic, and preventative tools to combat the current COVID-19 pandemic raised $357,000 in debt, options, and other securities.
Health Tech Trivia Challenge
Here’s a new Health Tech Trivia Question.
Rules: Don’t use Google. Just guess. Hit reply and email me your answer along with if you want me to include your name/company, just your initials, or keep it anonymous. I’ll provide the answer next Monday along with the first three (3) people to get it right — if anyone does! I’m happy to link out to your company’s website too, which might be worth a lot in SEO mojo someday, who knows?
Question: Which digital health entrepreneur has a son who has also started a digital health startup? Only one hint: In case there are more than one answer to the question above: For the one I’m thinking about, the son’s company’s name could be interpreted as a reference to his old man.
Hit reply if you know!