Week-end roundup: Owlet in rebuilding mode including FDA submissions, Zus Health raises $40M, SpectrumAi’s autism therapy $20M Series A

March 18, 2023 | by

Owlet Baby Care, developers of a baby sock health monitor (that TTA has followed since 2013!), is trying its best to pivot to profitability. After going public via the then-popular-like-hot-muffins SPAC route in early 2021, then being forced to pull its original Smart Sock off the market in November 2021 by the FDA due to medical device claims without 510(k) marketing clearance [TTA 16 Feb 22], it spent the first half of 2022 introducing the new Dream Sock and Dream Duo at retail, then in second half dramatically cutting back marketing spend and staff. Their 2022 revenue of $69.2 million dropped 8.7% from 2021’s $75.8 million in 2021, but operating expenses increased 18.7% for a net loss of $79.3 million last year. After last August’s layoffs, the company now has fewer than 100 people compared with 227 earlier in 2022. Another change in strategy: after spurning the FDA and the medical device clearance process before the SPAC, in October they filed for an FDA 510(k) for BabySat, a prescription device to alert on baby heart rate or blood oxygen saturation falls out of a prescribed range. In December, FDA accepted a de novo submission for an enhancement to Dream Sock that provides heart rate and oxygen notifications in addition to sleep monitoring tools (release). In February, it raised a $30 million private placement financing of convertible preferred stock.  Mobihealthnews, Owlet Q4/FY 22 earnings release, financing release

Two fundings of note even as Silicon Valley Bank and Signature Bank exit to the Bank Graveyard…

Point-of-care shared data platform Zus Health raises $40 million. Financing was raised from JAZZ Venture Partners, F-Prime Capital, Maverick Ventures, and Andreessen Horowitz (a16z). Zus Health is led by digital health veteran Jonathan Bush, founder of athenahealth, which he departed in 2018. The financing will be used to add new data sources, build workflow and referral tools, and introduce integration pathways so providers can use external patient data. Zus also announced a partnership with primary care EHR/tech company Elation Health to integrate the Zus Aggregated Profile to enable real-time access of expanded patient records from hospitals, clinics, labs, and pharmacies. Release, Mobihealthnews

SpectrumAi’s Series A raised $20 million from CVS Health Ventures with participation from Cobalt Ventures, and follow-on investments from seed investors F-Prime, Frist Cressey and Autism Impact Fund. SpectrumAi focus is to improve therapies in use for autism. Its Twyll EHR uses applied behavior analysis (ABA), a therapy used with autistic patients, plus Patterns, its network analytics platform, to improve data capture and objective measurement of ABA therapy. According to the release, “Autism is the fastest growing developmental disability in the United States driving unprecedented growth in the ABA industry. ABA is intensive and long-term therapy, averaging up to 25-40 hours each week. Measurement of ABA therapy’s efficacy to date has been limited to subjective parent and provider surveys.”

News and deal roundup: Zus Health’s $34M ‘back-end in a box’, Bright Health’s IPO, Lyra Health’s $200M done, Valo Health’s $2.8B SPAC; UK’s Alcuris, Clarity Informatics, GTX test; Google’s health blues, Facebook’s smartwatch

June 18, 2021 | by

Athenahealth founder’s latest health tech venture lays track. Jonathan Bush’s new venture, Zus Health, is being pitched to tech founders as providing a ‘Lego’ like back-end for startup digital health companies. Variously compared to ‘Build-A-Bear’ or track laying, it’s an ‘in a box’ setup that provides a data record back end, a software development kit (SDK) with tools and services, and a patient interface. Presumably, this will also assist interoperability. Mr. Bush has enlisted an all-star team and is basing outside of Boston in the familiar area of Watertown, Massachusetts. Andreessen Horowitz (a16z) led the $34 million Series A, joined by F-Prime Capital, Maverick Ventures, Rock Health, Martin Ventures, and Oxeon Investments. The financing will be used for engineering the tech stack. Current clients developed in stealth include Cityblock Health, Dorsata, Firefly Health, and Oak Street Health. Not a breath about the revenue model other than ‘partnership’. Make sure you pronounce Zus as ‘Zeus’ (Athena’s father for those who aren’t up on their Greek myths). Zus release, FierceHealthcare

This week’s IPO filing by insurtech/clinic operator Bright Health with the Securities and Exchange Commission (SEC) confirmed earlier reports that the offering will crest over $1 billion [TTA 28 May]: 60 million shares with an initial valuation of $20 to $23 is at a minimum of $1.2 billion. Company valuation is estimated at $14 billion which is about midpoint of earlier estimates. It will trade on the NYSE under BHG. The cherry on the cake is a 7.2 million 30-day share purchase option to their underwriters at the initial IPO price. Timing is not addressed in the release but expect it soon. BHG release, Mobihealthnews

Lyra Health banks an additional $200 million. This week the corporate mental health therapy provider completed their Series F $200M financing backed by Coatue, new investor Sands Capital, plus existing investors, for a total of $675 million to date (Crunchbase). Valuation is now estimated at $4.6 billion. Mental and behavioral health tech remains warm, with the thundercloud on the horizon Teladoc’s myStrength app [TTA 14 May]. Lyra’s strong corporate footprint puts them, along with Ginger, in a desirable place for acquisition by a telehealth provider or payer. Lyra release, FierceHealthcare

Drug discovery and development company Valo Health is going the SPAC route with Khosla Ventures. The special purpose acquisition company (SPAC) Khosla Ventures Acquisition Co. will form with Valo Health a new company (KVAC) with a pro for­ma mar­ket val­ue of approx­i­mate­ly $2.8 bil­lion with an initial cash balance of $750 million including a $168 million PIPE led by Khosla Ventures. Valo’s flagship is the Opal Computational Platform that creates an AI-based platform for drug discovery. The current pipeline has two clin­i­cal-stage assets and 15 pri­or­i­tized pre-clin­i­cal assets across car­dio­vas­cu­lar meta­bol­ic renal, neu­rode­gen­er­a­tion, and oncol­o­gy fields. Khosla has been largely absent from digital health investments. The SPAC route to IPOs has also cooled. Valo release, Mobihealthnews  

And short takes on other news… (more…)