Athenahealth has done very well in the market for electronic medical records and other provider information systems. It is being sold by one set of investors to two private equity firms for $17 billion dollars. The company may be good, but that is far too high a price in a very competitive market. We are seeing the result of the fed pumping trillions of dollars into the economy. This will be a very leveraged deal which will eventually stress the company.
Investors may get the sharp end of the stick and swallow some losses, as Sword Health, which manages musculoskeletal conditions, raised an insane $163 million at an even more insane $2 billion valuation. There is nothing proprietary about what this company does, and no barriers to entry.
Crazy funding continues apace, as Medallion receives $30 million in new funding for doing something called digital health infrastructure which in this case just turns out to be helping doctors deal with licensing issues in various states.
Best Buy is another large corporation trying to make a bet on health care, in this case largely by providing remote patient monitoring services. The company made yet another significant acquisition in the space, buying Current Health.
Money streams in to Flo, which sells an app for women to track menstrual cycles, etc. Investors hope they won't be left up a creek. $100 million in financing that is highly unlikely to ever generate a return.
We will see how devoted to investors Medicare Advantage plan company Devoted Health will be. The valuation insanity continues as this company going into an incredibly competitive market, against people like UnitedHealth and Humana, raises $1.2 billion in new capital at an $11 billion valuation. Literally crazy.
We are seeing a wave of acquisitions among health care companies hoping to show that they actually have a business that justifies high valuations. Symplr provides software to help health care companies with certain administrative tasks and is acquiring Halo Health, which offers clinical communication and collaboration software. No price disclosed but you can bet it was extremely high.
More insanity on health care valuations. City Block builds primary care clinics in urban areas. It just raised $400 million in new capital, with a valuation of almost $6 billion, in what is now a very competitive market among well-financed companies.
The Healthy Skeptic is a website about the health care system, and is written by Kevin Roche, who has many years of experience working in the health industry. Mr. Roche is available to assist health care companies through consulting arrangements through Roche Consulting, LLC and may be reached at [email protected].