HGP HIT September Insights

October 02, 2019

The Health IT IPO streak continued during the month of September, with Peloton, an interactive fitness platform, completing its IPO on September 29, and SmileDirectClub, a network-based provider of orthodontic aligners, on September 12.  Also during the month, Progyny, a provider of fertility benefits management, filed for an initial public offering.  While the volume of listings has been strong, the recent performance has been lackluster, with Peloton and SmileDirectClub trading down 11% and 19% on the first day of trading, respectively.  Health IT is not alone - 2019’s IPO class across the board has generally been a disappointment, with several IPOs valued lower than their pre-IPO private valuations.  However, after a nearly three year drought, the six new Health IT listings in 2019 with more in the queue is a very strong sign for Health IT investors.


Noteworthy Transactions

September 2019 saw continued strong interest from buyout investors, including:

Noteworthy M&A transactions during the month include:

  • Mango Health, a developer of consumer-focused mobile health apps, was acquired by Audax and Odyssey-backed TrialCard.
  • VitreosHealth, which offers on-demand predictive population analytics for population health management, was acquired by its existing partner, HMS, for $36.5mm.
  • GoodRx entered the telepharmacy market with the acquisition of online prescription services provider HeyDoctor.
  • Crossix, which offers solutions that measure cross-channel media campaigns aimed at patients and healthcare professionals, was acquired by Veeva Systems for a total deal value of $550mm (including $120mm in retention bonuses).

Several investments during the month focused on remote care and device connectivity, including:

  • Healthy.io, an Israeli company that offers a mobile app for homebased urinalysis tests, raised a $60mm Series C.
  • Capsule, a developer of a digital platform designed to provide home delivery of prescription medication, raised $200mm of Series C and debt at a $250mm pre-money valuation.
  • Virtual-first primary care vendor Firefly Health launched with a $10.2mm Series A at a $35mm pre-money valuation.
  • Digital diabetes care and self-management platform, OneDropraised $40mm from Bayer AG.
  • AllinMD, a China-based digital orthaepedic hospital, raised a $100mm Series B.

Another investment theme during the month of September was clinical decision support, including:

  • InsightRx, a precision dosing and clinical analytics platform, raised a $10mm Series A at a $22mm pre-money valuation.
  • UK-based Kheiron Medical, which offers an AI-based breast screening platform, completed a $22mm Series A.
  • UK-based BenevolentAI, which offers AI-based technology for drug discovery, raised $90mm at a $1 billion valuation, halving its valuation from 2018.


Noteworthy News Headlines


Public Company Performance

HGP tracks stock indices for publicly traded health IT companies within four different sectors - Health IT, Payers, Healthcare Services, and Health IT & Payer Services. The chart below summarizes the performance of these sectors compared to the S&P 500 for the month of September:


The following tables include summary statistics on the four sectors tracked by HGP as well as the S&P 500 and NASDAQ for September 2019: