The weekend read: why SPACs came, went, and failed in digital health–the Halle Tecco analysis/memorial service; why OpenAI is going to be a bad, bad business

April 10, 2025 | by

Let us now hold the formal memorial service for the SPAC–the special purpose acquisition company, at least for digital health. Halle Tecco, whom many of us know as the founder and past CEO of Rock Health, plus angel investor, plus adjunct professor in digital health at Columbia, now has an opinion blog on Substack. As our Readers know, this Editor, who is none of the above, has been shoveling dirt on SPACs here on TTA since they became an Easy Way To Avoid the cumbersome, oh-so-tiresome preparation for a public IPO during the Digital Health Boom of 2020-22 (RIP). She has been covering their Trouble Every Day and demise ever since. Having not kept quantitative track of Cracked SPACs, only the news as they floated, declined, and failed, this Editor enjoyed Ms. Tecco’s quantitative analysis of the overall picture. She puts it into a readable business context. 

Shockingly, SPACs across all IPOs are still going on. In 2023 and 2024, total SPACs as a percent of IPOs neared 40%. Their high was reached in 2022 at 73%. The attractiveness of SPACs was obvious: an investor sets up a publicly traded company and goes through the hassle of an IPO. It raises money on public markets and from investors to acquire another company. Then it hunts for a company to acquire. The target is landed, is acquired, symbols change, and the deal is done, all in three to six months. The acquired company doesn’t have to go through the investor pitches, the due diligence, the incessant filing…less fuss and muss, but missing the rigor of a traditional IPO. For the SPACs, especially those focusing on digital health, 2020-22 became FOMO Fever–the fear of missing out.

For digital health companies, the boom became a race to the bottom. 

  • 30.4% went bankrupt, some spectacularly, others with a whimper as they’ve failed, one after the other: 23andMe, Cano Health, Babylon Health, Nuvo, Pear, others
  • 26.1% were acquired well below their SPAC entry price: Sharecare, SOC Telemed, Akili and others. The only exception: Augmedix, with a $40 million SPAC valuation, was bought for $139 million by Commure. (Commure is backed by General Catalyst and Andreessen Horowitz; Commure/Athelas itself is an interesting and complex story.)
  • 39.1% are still in business but trading below their SPAC entry price. A number flirted with the Devil of Demise and are recovering: Clover Health, Owlet (baby monitors), Butterfly (ultrasound POC), Talkspace. DocGo became a Covid play and then got into political trouble and is nearing $2/share from their late 2022 high of just below $11. And others.
  • There is exactly one success story: hims & hers (4.3%)

Enjoy this read on her blog. If you prefer a podcast, here’s Ms. Tecco on her ‘Heart of Healthcare’ with Mohamad Makhzoumi (link is to Spotify), co-CEO of New Enterprise Associates (NEA), a VC in healthcare and technology (33 minutes), discussing healthcare’s evolution, so to speak, from “the trailer park of venture investing” and the hilarious ‘healthcare hokey-pokey’. And here’s a Gimlety View of SPACs from 26 June 2024.

Another Big and Disastrous Fail in the making may be OpenAI, the creator of ChatGPT. It is converting from a non-profit to a for-profit company, losing its founder group, fundraising like crazy, and generally has ditched its Mission. “OpenAI is an AI research and deployment company. Our mission is to ensure that artificial general intelligence benefits all of humanity.”  OpenAI has raised the largest venture-backed fundraise of all time, $6.6 billion, and is now valued at $157 billion. Why overvalued? A tell is that SoftBank has invested $500 million into this megillah–this Editor recalls that SoftBank invested in Theranos and WeWork. Another tell–the NY Times and The Information estimated that Open AI lost $5 billion in 2024, it loses money on every copy of ChatGPT, and its revenue projections are near-absurd at $11.6 billion in 2025 and $100 billion by 2029. It totally ignores that every major player has an AI program, from Microsoft to Google. If you’re a fan of ChatGPT or need your eyes cleared around this type of AI, grab your cuppa and a bottle of your favorite pain reliever for Ed Zitron’s article, OpenAI Is A Bad Business. (Ed is an English tech writer, podcaster, and PR specialist)

News roundup: Omada Health files S-1 for IPO in 2025–and a look at 2024 healthcare IPOs, Philips debuts new smart baby monitor, ActiveAlert launches in UK, ATA Nexus 2025 calls for speakers, abstracts

October 4, 2024 | by

Omada Health plans exit into the public markets. Omada, which has virtual health diabetes and hypertension management programs, reportedly filed an S-1 with the Securities and Exchange Commission (SEC), according to a Business Insider source. The IPO may be planned for 2025. Omada has been on a hot streak lately, inking deals with Amazon for their health condition programs, adding GLP-1 management, plus accreditation from NCQA and URAC.

Unlike the bare shelves of 2023, 2024 has racked up a few healthcare and digital health IPOs. Waystar’s IPO landed in June and closed today at $26.80, above its $21.50 opening price. This is for a decidedly unglamorous but revenue-generating part of healthcare–RCM and payments management. Tempus AI, in the far glammier AI in precision medicine sector, also IPO’d in June at $37, and after some initial summer sag recovered to $48.96 today. But June also saw yet another formerly hot healthcare tech company, Sharecare, go private after three years of a cracked SPAC. It was bought at 13% of its peak valuation. [TTA 26 June] Another supersonically sad summer story was Tel Aviv-HQ’d Nuvo, which developed and markets a digital pregnancy monitoring system. It went public on Nasdaq via a SPAC on 1 May–then filed for Chapter 11 reorganization by 22 August. Has this finally, finally put paid to SPACs? Bloomberg News, The Middle Market

Virtual MSK provider Hinge Health reportedly is testing the IPO market, having hired Morgan Stanley to start the process. [TTA 3 Oct]

Omada investors since 2011 have poured $525 million into the company over 11 rounds, ending with a debt financing in January 2023. There are 33 investors, including eight lead investors such as Fidelity, Cigna, and Andreessen Horowitz. Crunchbase

If one is to believe the analyst and investor quotes in this Business Insider article, once we get past 2024 and into Q1 2025, the ‘clogged pipe’ of waiting IPOs will roar back into the market like a hungry beast. Aside from wincing at the heckuva mixed metaphor, this Editor tends to be a lot more sanguine about next year. She believes that there are a lot of hungry investors waiting, all right–to offload years of risk to the public and other investors and recoup some if not all of their investment money. Mr. Market may, or may not, feel the same. Hat tip to HIStalk 4 October

On a lighter note, Philips is introducing its most advanced monitoring system to date, the AI-assisted Avent Premium Connected Baby Monitor. The system includes a camera/mic, ‘parent unit’, and app. The camera/mic tracks the baby’s chest motions in sleep and breathing without a wearable. It also has Cry Detection + Translation, which uses AI-assisted and machine learning to interpret baby’s cries. Parents can set up notifications via the parent unit or the app to better understand if baby is tired, gassy, hungry, uncomfortable, or irritated. Release, Mobihealthnews

At the other end of the age spectrum, the Taking Care personal alarm (PERS) company in the UK is introducing ActiveAlert. It adds an AI-assisted twist to personal assistance by triggering a wellbeing check-in call when it detects changes in the frequency, timing, or nature of alarm calls. Their models use 30 years of alarm call data. If there is a change, families are notified. According to their release (PDF), the patterns of alarm call usage can be used to take a more proactive approach to elder care in alerting for concerns or red flags to families before emergency scenarios arise. 

Planning ahead to 2025, the American Telemedicine Association will be returning south–to New Orleans. ATA Nexus–Redefining Care Delivery will be 3-5 May at the New Orleans Convention Center. Deadline is 1 November for speakers and general content proposals, as well as research abstracts for oral and poster presentations. Information for applications is here. The form for requesting the sponsorship and exhibit prospectus is here. Release