A company called Whoop raised a ridiculous $575 million in new capital at a supposed $10 billion valuation. The press release was released on April 1, so I would like to think it is a prank, but apparently it is not. Investors have learned nothing. The company has a wearable that supposedly helps with all kinds of health issues. Wearables are the hot new fad, and it will be a fad, but hey, if people want to throw their money away on fads, God bless them.
Big deals continue in health care financings. eMed, which manages weight loss medications for employers, raises a hefty $200 million, giving it a valuation of $2 billion, which seems crazy. But hey, the company has Tom Brady as an investor so there is that.
Color Turquoise Health happy, as it raises $40 million in new capital to support an expansion of its business from price transparency to managing contracts for providers. Unfortunately the price transparency rules have mostly been used by providers to raise their prices to the highest price charged for the same service by other providers.
Eight Sleep, another one of those weird names that litter health care, raised a new round of capital which supposedly values the company at $1.5 billion. Eight Sleep sells sleep hardware and software and claims to use AI to personalize and improve sleep. Sounds like another grossly overvalued company.
Simplistically, high health spending is due to high hospital prices, which is due to excessive market power. An article shows just how concentrated most US hospital markets are. In almost every state over 50% of hospitals operate in a highly concentrated local market, meaning they face little competition.
Mental health companies are very hot. Virtual mental health services provider Talkspace is being bought by hospital operator Universal Health for around $835 million, a high multiple of revenue and earnings.
There are so many health care companies that people struggle to come up with names and we end with weird stuff like Grow Therapy, which nonetheless raised $150 million to support its mental health business, as that segment continues to be incredibly hot. Grow uses a mixed in-person and virtual care model and sells to health plans and employers.
There has been a lot of activity lately in the once-hot field of primary care clinics. Companies going bankrupt, out-of-business, being bought, merging. Humana, which is now solely a Medicare Advantage firm, has continued to invest in the area and agreed to buy MaxHealth, which has over 50 clinics, reportedly for around $1 billion.
Mental health is a very hot health care investment area. Talkiatry raised $210 million in new capital for its virtual mental health services which utilizes employed psychiatrists, psychologists and other professionals.
Investors can take comfort in Solace Health, which provides "advocates" to members in health plans, as it raises a fresh $130 million in capital, which takes its alleged value over $1 billion.
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 khroche@healthy-skeptic.com.
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 khroche@healthy-skeptic.com.