11.09.20
6 min. read

Pre-Post: Cohero. $260M across 20 deals.

Issue 002

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Digital health research from Brian Dolan.

 Welcome to E&O Mondays.

Welcome back to E&O Mondays, the free newsletter from Exits & Outcomes. So, strap on your Modern Vacuum Cap (more on that below), and let’s get to it…

If you aren’t a paying sub already, here’s what you missed in the paid newsletter last week:

  • A prominent non-profit ripped into the evidence base and cost-savings data of a well-known digital health company.
  • A pharmaceutical company surprised me by moving to sell its formerly prescription-only digital therapeutic direct-to-consumer too.
  • And I’m starting to think a few digital health companies with Breakthrough designations from the FDA may be willing to try to shoehorn their products into existing Medicare benefit categories.

In this edition of the free E&O newsletter:

  • E&O continues to try to close the gap between reports of massive billion-dollar quarters and the much smaller funding rounds you read about in the press: A roundup of $260 million in announced (and unannounced) funding across 20 deals for the week of November 2, 2020.
  • Prediction-Postdiction is back with a real swing-and-a-miss prediction.
  • And, once again, a new Health Tech Trivia Challenge…

But first: Why not become a paying subscriber to Exits & Outcomes today? We both know you deserve it. That 2020 budget isn’t going to spend itself. Head to the pricing page of E&O right here and maybe sign up your whole team.

This week’s sponsor: 1909’s Modern Vacuum Cap

Prediction-Postdiction: Acquiring Cohero

Before I go calling out any more research firms, it seems fair that I take a turn here.

Back in May 2019, I made the prediction that Livongo would acquire Cohero Health. Below is the relevant excerpt from the first long-form research report I published on E&O, Approximating Livongo Health’s S-1 (this was before the company went public or filed its S-1).

Prediction: Livongo will acquire Cohero Health.

“Asthma and COPD are next: Livongo’s executives have expressed an interest in moving into respiratory conditions, in particular, COPD. Since Livongo has never developed a device and put it through the FDA, it is likely to acquire a respiratory-focused digital health company. I predict Livongo will acquire Cohero Health.”

Postdiction: They didn’t.

Pharma company Aptar just bought Cohero’s assets and Livongo (now Teladongo) has yet to move into respiratory therapeutic areas.

Maybe not surprisingly, this prediction of mine — back in the early days of E&O — was met with quite a bit of enthusiasm from Cohero Health equity holders. I really thought I was onto something. And, while it was a whiff, I also believe that Livongo gave Cohero a look — along with just about any digital health company that was ready to consider an exit — but ultimately decided to pass.

It still puzzles me why Livongo didn’t continue its expansion into additional medical conditions. Part of me wonders if the company couldn’t find a right-sized company with some traction. Maybe Cohero was still too early in its commercialization efforts and Livongo didn’t want to build a new vertical up from scratch. (Remember: Aptar only acquired Cohero’s assets.)

And the most successful company in that space, Propeller Health, had already exited by May 2019: Resmed bought them at the beginning of the year. What’s more, Propeller may have been too big for Livongo to acquire comfortably at the time.

Classic Goldilocks situation.

OK, here’s a new prediction from me: Hinge Health goes public via SPAC merger within 12 months. Start the clock, I’ll revisit this next November.

$100M+ rounds

For the week of November 2, exactly zero digital health companies raised north of $100 million. Huh.

$10M-100M rounds

Eko, best known for its smart stethoscope, raised a $65 million Series C and it plans to launch a monitoring program for cardiopulmonary patients at home. The round was led by Highland Capital Partners and Questa Capital. Artis Ventures, DigiTx Partners, NTTVC, and 3M Ventures also contributed. Release

Olive AI raised $46.3 million according to a recent filing. If you add that up with another SEC filing from the spring, you get pretty close to the $106 million round the company announced in September. So, clearly, it was broken up into two. Back then the company said General Catalyst and Drive Capital led along with contributions from other backers like Ascension Ventures, Oak HC/FT, and SVB Capital. Old Release

Medically Home Group raised more than $40.4 million. The company, which started up in 2016, is likely seeing tailwinds thanks to the pandemic. Here’s how it describes itself: a “technology-enabled clinical enterprise, providing the necessary software, tools and capabilities to safely-shift advanced medical care from hospitals to patients’ homes.” Site

Here’s an interesting one: State Space Labs raised $28.4 million. Its existing investors include Khosla, Firstmark, Lux, and Expa. Neuroscientists founded State Space to help video game players improve their reaction time. So, in addition to an esports training program and cognition analytics, the company has come to realize it should also build digital therapeutics too. Site

Future, a subscription-based workout fitness app, announced its $24 million Series B in mid-October, but it just filed its Form D for $20 million, so I figured I’d include it. TechCrunch

Koa Health raised $16.5 million upon spinning out of Spain-based telecom giant Telefonica. Ancora Finance Group and Wellington Partners led the funding. The company offers digital mental health programs via employers and focuses on managing stress, sleeping better, aiding relaxation, positive thinking, and boosting self-confidence. Release

ArborMetrix, a health analytics company with a focus on clinical data registries, raised $11.8 million. Site

$1M-10M rounds

Dermala, a DTC ecommerce company that sells microbiome-friendly products to manage acne, raised $6.7 million. As part of Dermala’s service, they offer an acne tracking app. Site

Paceline, which calls itself “the first-ever fitness rewards platform that adds financial benefit to your physical activity,” (quite the questionable claim!) has raised $6.6 million. Site

Kover.ai, which is a health and other benefits platform for gig workers, raised $5 million, according to a filing. Site

Unlearn, maker of a machine-learning platform that creates “digital twins” for control arms in clinical studies, secured $3 million in new funding from Esai. The new funding bumps up Unlearn’s Series A to $15 million. Release

LulaFit, which sells virtual and on-site wellness classes to individuals, landlords, and employers, raised $2.8 million. The company is mostly positioned as a way for landlords of luxury buildings to outsource their amenities. Site

Massive Bio, a precision medicine company that also offers tech-enabled clinical trial enrollment services, secured a $2.6 million round led by Revo Capital with contributions from Cavendish Impact Foundation (CIF). Release

Prodigo, an online marketplace for vendors who sell to healthcare providers, raised $1.6 million. Site

Scotland-based Talking Medicines, which analyzes social media for pharma companies to measure patient sentiment, raised $1.4 million. Scottish Financial News

Medicom, a health information exchange network, raised nearly $1.3 million in debt and other securities. Site

France-based BrainTale, which develops digital medtech for neurology and intensive care, raised $1.2 million in its first round of financing. The company focused brain injuries. Release

$100,000-1M rounds

AI Metrics, an AI-enabled imaging analytics startup, raised $774,000. One of the company’s first offerings: “longitudinal evaluation of advanced cancer response to therapy.” Site

Farewelling, a funeral and end-of-life planning startup, raised $347,000 in options and other securities. Site

Pollie, a “telehealth marketplace that matches people with ovaries to hormonal health specialists,” raised $125,000 in debt. The company focuses on reproductive hormonal conditions like PCOS and endometriosis as well as other issues related to hormonal imbalances. Site

Health Tech Trivia Challenge

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 a few of the first 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?

The question: Which health tech company’s CEO was invited as a guest of FLOTUS to the State of the Union Address because of his work in digital health? Hint: This health tech company has since been acquired. Extra hint: It was based in Colorado. OK, one more hint: It was better known by the name of its popular app, which I will accept as a correct answer too.

Email me if you know…

Tune in next Monday for the answer.

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