It’s the May the 4th be with you day! In Episode 26 of #HealthTechDeals, Jessica is huddling in Boston after the American Telehealth Association conference, and has Star Wars-related trivia. There’s gossip there, there’s more gossip about Cerebral & its ADHD med strategy. Meanwhile a lot of copy cats in deals today with Hello Heart ($70m) for hypertension, Concert Health ($40m) for mental health, Vivian Health ($60m) for nurse staffing, Curebase ($40m) for DCTs, Mendel.ai ($40m) for NLP & Blue Spark ($40m) for RPM — all joining very crowded markets.
Each week I’ve been adding a brief tidbits section to the THCB Reader, our weekly newsletter that summarizes the best of THCB that week (Sign up here!). Then I had the brainwave to add them to the blog. They’re short and usually not too sweet! –Matthew Holt
For my health care tidbits this week, it’s time to bring up the disconnect between the continual collapse of #DigitalHealth stock prices and the continued increase in private sector investment and valuation in the same sector.
All of nine months ago, way way back in March 2021 market leader Teladoc hit a stock price of $308. Last week it hit a low of just under $90. Meanwhile several companies have IPOed or SPACed this year and almost all of them have seen their stock fall dramatically. For example, pioneer online mental health company Talkspace is now at a market cap of under $300m. This week a different mental health company Cerebral which was only founded in January 2020 raised $300m at a private valuation of over $4 billion. Yes they could have bought out Talkspace for that amount! In October Medicare Advantage plan Devoted Health raised money at a $12 billion valuation which exceeded the market cap of rivals Clover, Bright Health and Oscar–each of which has more members.
So what’s going on? Part of this is the wash of money still going into venture funds. Interest rates are historically low, while inflation is picking up, so that money has to go somewhere. Additionally some of the companies that SPACed out were probably unable to get such a good valuation in a private round. But it can’t be that all the 50 or so public companies are lower quality than the private ones. That indicates that either the private valuations aren’t real (because there are so many protections built into the deal for investors), or that the private and public valuations are going to get closer together. There is of course one more possibility–some of the private companies may pursue M&A and buy out some of the public ones. But in any event, this current arbitrage cannot last forever.
It’s not unlikely the public stocks may pick up. But we’ve seen private and public market bubbles before and the aftermath isn’t usually pretty.
How much longer do we have to wait for Glen Tullman to be on the NASDAQ with Transcarent? In this episode of Health in 2 Point 00, Jess and I discuss several new deals in the healthcare space. Suki raises $55 million, bringing their total up to 95 million; Robin raises $50 million , bringing their total up to $65 million; Cerebral raises $300 million, bringing their total up to $420 million; Nomi raises $110 million ; and Apti Health raises $50 million, bringing their total up to $65 million.
Today on Health in 2 Point 00, Jess is trying to replace me with the other Matthew Holt. But on Episode 216, I am still around to talk about some deals. First, Datavant acquires Ciox Health in a $7 billion deal, aiming to create the nation’s largest health data ecosystem. Next, Avenue Health is a new company that has just been launched, working on seamless, end-to-end data integration and blockchain, and AllyAlign Health raises $300 million as a new Medicare advantage plan. Finally, Cerebral raises $127 million – this is like a Ro or Hims but specifically for mental health. —Matthew Holt
Today on Health in 2 Point 00, Jess and I gossip about the wild rumor that UnitedHealthcare is acquiring Amwell. On Episode 157, we discuss Lark raising $55 million in a Series C along with a deal with Anthem to be their preferred DPP provider, Medicare Advantage plan Clover going public with a valuation of $3.7 billion, NOCD raising $12 million in a Series A providing specialized CBT and virtual OCD treatment, Cerebral raising $35 million in a Series A for its comprehensive digital mental health offerings, and Express Scripts adding to their digital health formulary with offerings targeting things like women’s health, tobacco cessation, muscle and joint pain, and more. —Matthew Holt