The largest of the year-end fundings (so far) goes to Redesign Health. Best described as a designer and funder of startup health companies which are then spun off, Redesign gained a $175 million investment for a new fund from Declaration Partners, Euclidean Capital, and True North Advisors. Unlike your typical seed funder or incubator, Redesign takes an activist role in forming startups before spinning them off. Its model includes in-house experts to advise on formation, connecting the startup to existing relationships with healthcare organizations and demand generation systems, and access to networks of investors and talent experts. Redesign has used this model with more than 60 companies. These companies have had over 15 million patients and generated >$1 billion of revenue. The fresh funding will be used to start up new companies in eight areas, including ‘preparing for an aging population’. Release, MedCityNews
Once spun off, the organizations are on their own. Some have been acquired: Jabra Enhance in hearing aids (GN Hearing) and Vault Workforce Screening (Sterling). One notably got into trouble–Calibrate, which was sold for $20 million in an October 2023 ‘reorganization’ to private equity firm Madryn Asset Management along with other investors [TTA 26 Oct 2023]. A pioneer in DTC telehealth programs for GLP-1 weight loss drugs, Calibrate was caught in the squeeze between scarcity of those drugs (Ozempic, Wegovy) and the entry of Teladoc, unable to fulfill its programs nor, at that time, to get insurance reimbursement. It is now benefiting from being in a very hot sector of weight loss drugs. Prior to the sale, Calibrate raised about $160 million in funding [TTA 15 Feb]. Interestingly, Calibrate is still listed in the Redesign portfolio including career openings.
Redesign itself had some rocky times earlier this year with their layoff of 77 from their New York-based staff of 200 to 250 (estimated). The cuts were from the areas that support new venture creation. The new funding is the first sign that Redesign is getting back into the business of forming new companies versus maintaining the portfolio.
New Zealand’s Orion Health to be acquired by Canada’s HEALWELL AI. The final price is NZ$200 million/CA$165 million (US$115 million) for 100% of Orion’s private shares. CA$86 million will be paid in cash and the balance will be paid in HEALWELL stock plus CA$20.5 million in a 3-year performance-based arrangement. Closing is anticipated to be April 2025, after Orion divests itself of non-strategic assets and the usual approvals by shareholders, regulators, and the Toronto Stock Exchange.
Orion Health’s products–Orchestral, Amadeus, and Virtuoso–are data exchange, patient record, and analytics platforms to benefit clinicians and patients. Their largest customers are in Canada, Australia, and New Zealand, plus the NHS in the UK, giving HEALWELL AI an international footprint. HEALWELL AI is based in Toronto and is an artificial intelligence company focused on preventative care through the early identification and detection of disease. Their release announcing the transaction is interesting because of the complexity of the funding (dare we say leveraged?). HEALWELL has $47.6 million in funding over six rounds (Crunchbase). It trades in the vicinity of CA$ 2.00 which gives it a valuation of CA$354 million. Mobihealthnews
Orion Health was last mentioned here with their win two years ago of Saudi Arabia’s health information exchange. The founder, Ian McCrae for the past 30 years, stepped down in August 2022 for health reasons. Replacing him was Brad Porter, his son-in-law.
On the other end of the spectrum, Tuva Health emerges from stealth with $5 million. The round was led by Virtue, with participation from Box Group and Y Combinator, and notable health tech angel investors. New York-based Tuva has an open-source data model for healthcare analytics and data management to be used by healthcare providers, payers, life sciences companies, and research institutions as an open standard for healthcare data transformation. Their software gives users the ability to transform claims and EHR datasets into analytics-ready data tables via an open-source data model with built-in normalization, data quality testing, and enrichment. 1,500 experts are currently working in collaboration on the model. Their initial partnerships are with Oscar Health and CareAbout Health. The principals and founders, Aaron Neiderhiser and Coco Zuloaga, are former senior executives from Health Catalyst and Strive Health. Release, FierceHealthcare
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