Kevin's Weekly Health Tech Reads 6/13

An active M&A week (One Medical / Iora, Carbon / Steady, Ciox / Datavant), four $100+ million fundraises (Allyalign, Monogram, LetsGetChecked, Cerebral), and more!

Reads for the week of 6/6 - 6/12


  • One Medical and Iora Health announced they’re merging this week, with One Medical buying Iora for $2.1 billion in an all-stock deal. This is a big move in the primary care market that we covered at length earlier in the week in a special edition of this newsletter - see the link for lots more thoughts on the transaction. Link.

  • Carbon Health announced it is acquiring virtual diabetes clinic Steady Health. Presumably, this means we’ll see them on the hunt for other tuck-in acquisitions as well in your typical set of spaces - mental health, hypertension, etc. It’s interesting to read through the press release as it focuses heavily on their expansion into home care / remote monitoring as well as building out value-based offerings for employers / payers. It starts to feel like Carbon could be moving quickly in the direction of building a virtual IDN tied to its primary care footprint, which would be a really interesting play for them. It’s worth watching how Carbon and One Medical both seek to expand their businesses away from FFS primary care to more risk-based models - there is obviously a lot of investor appetite for capturing more of the healthcare dollar via risk-based contracts these days. Link.

  • Ciox and Datavant, two players in the health data space, announced they’re merging with the combined organization being worth $7 billion. It appears that Datavant is the more tech-forward organization, with a platform for exchanging de-identified clinical data. Meanwhile Ciox has built a network of. relationships with health systems to collect identifiable heath information. So combining the two appears to make sense at face value - one provides the underlying platform and the other provides the end users to connect it to. The CEO’s blog post on the combined organization’s vision is an interesting one to check out - they aim to be the middle layer that connects all of the world’s health data and then charge a transaction fee for use of that data. It’s a big vision, although I am always a little skeptical of the following problem / solution statement: problem: the data are fragmented in healthcare in too many silos. solution: our company is going to end healthcare data fragmentation by getting everybody to use our new, better approach that connects all the other silos. Oh btw and then they’re all going to pay us to use it. It certainly seems an approach that will lead Datavant to build a big company in the healthcare data space, it just doesn’t strike me as the answer to connecting the US’s healthcare data. Link (CEO blog post). Link (Press release).

  • It appears Clover Health has officially become a Reddit meme stock this week, as its stock price briefly hit $28.85 on Tuesday. I’m frankly not even sure what to write about this one - it is a very strange world we live in that meme stocks exist. Any analysis of this company based on the reality of the business itself points to some massive red flags. But Chamath has mobilized a Reddit army that clearly has the ability to move the market and is gambling it can beat Wall Street at its own game. Craziness aside, I have to wonder what this does to the morale of Clover employees. They’re now working for a meme stock company who’s value is swinging wildly by the day as it has essentially turned into a gambling bet between Reddit day traders and Wall Street hedge funds. Their leadership team has seemingly embraced and even encouraged this to happen - i.e. see its inclusion of questions from Reddit from the last earnings call. If you’re actually attempting to build an enduring business that can change healthcare, I can’t fathom why you’d actively try to insert yourself in the middle of this game. Rather than, ya know, focusing on building a business that could disrupt a really challenging industry. I do suppose it is a nice way to distract onlookers from asking meaningful questions about the fundamentals of your business. Link.

  • In actual news this week on Clover, they announced a partnership with Upward Health, an in-home primary care provider, focused on Direct Contracting patients. Seems like a low-risk, potential win-win for both parties - if Upward can enroll patients via Clover’s DCE they both stand to benefit from the economics. Link.

  • UHG got a bit of egg on its face this week as it was pressured to reverse a policy it announced last week denying coverage for ER visits it deemed non-urgent. In this ongoing battle between payers and providers around how to manage utilization and unit costs of healthcare, the one constant is that it always seems to be the patient who loses out at the end of the day. Link.

  • League, a relatively under-the-radar startup in the employer benefits navigation space, announced a partnership with Humana to be the “digital front door” for Humana’s Employer Group and Specialty insurance members. Link.


  • AllyAlign, a Medicare Advantage plan / primary care model for senior living facilities, raised $300 million from NEA. AllyAlign has been around in this space for a while although relatively under the radar in the traditional venture backed community. This is a very good interview with the CEO from a few years back on the dynamics of the model. I’d love to see an S-1 from AllyAlign one day to get under the hood more on the financials. Link.

  • Monogram, a home-based kidney care delivery startup, raised $160 million as that space continues to be white hot for investors. Link.

  • LetsGetChecked, a company that started in home testing kits, has raised $150 million to expand its product offering significantly into virtual care including telehealth and pharmacy services. It shares in the press release that it is in the process of acquiring a pharmacy in Florida. Revenue has grown by 1500% for LetsGetChecked over the last year - you see why investors are so excited about this space at the moment. Link.

  • Cerebral, a mental health startup that launched January 2020, raised $127 million at a $1.2 billion valuation. Cerebral has an app that gets patients medications for a variety of mental health issues via e-consults with providers it works with. Talk about hitting timing right on a relatively straightforward concept. Link.

  • Glen Tullman’s encore to Livongo, Transcarent, raised $58 million at a $500 million valuation to help employers manage health benefits. Is anybody going to bet against this company doing incredibly well at this point? The Business Insider article is a really good read and includes a interview with Tullman. It asks a very interesting question about whether folks at Teladoc are pissed off about Tullman immediately leaving to start a company that seems awfully competitive. The answer - a version of “I don’t know but employers like it” probably says all you need to know. Link (Press Release). Link (Business Insider - Paywall).

  • Medallion announced it has raised $20 million to build a provider credentialing platform for virtual health providers and is working with orgs like Ro and Ginger. This seems like a no brainer as these digital health organizations scale. Link.

  • Hawthorne Effect raised $20 million to decentralize clinical trials. Link.

  • Mendel raised $18 million to structure unstructured clinical data. Link.

  • Duos raised a $6 million Seed round to build out a platform to help seniors age independently. The model sounds like it has some similarities with Papa as it pairs a “Duo” assistant with a senior to help them navigate daily life needs. Duos has partnered with Magellan Health to roll out the service. Link.

  • Nirvana Health raised $4.2 million. All my Apologies for putting Smells Like Teen Spirit in your head the rest of the day y’all. Oh well, whatever, Nevermind. heh heh see what I did there. Link.


  • Medicare Advantage primary care startups aren’t the only organizations seeing a opportunity in the Direct Contracting market - Humana also sees it as a massive opportunity for its CenterWell Senior Primary Care Group, which has over 160 primary care clinics and serves 200,000 patients in the US. Link.

  • Kaiser Health News did a deep dive on how COVID-19 has opened the door for telehealth use and considerations moving forward. For close observers of the space, a lot of this article will rehash things already apparent. But for folks who want a good 101 overview of how COVID-19 has changed the telehealth landscape, it’s a good summary. Link.

  • This is a good read on health coaches and how primary care startups like Iora Health and Parsley Health have used them effectively. Health coaches are one example of how the health care industry befuddles me regularly - it seems so obvious that health coaches are a good, helpful (and relatively low cost) thing. Certainly for individuals going through a health journey, and probably for anyone who’d be willing to work with a health coach. So why is the industry so slow in adopting this role more broadly? That’s a rhetorical question. Link.

  • The Substack Health Tech Writers Guild again shared some solid content this week:

    • Gabe Strauss wrote a piece on the value proposition associated with mental health tech startups. The section at the end is quite interesting regarding how mental health startups can move from targeting self-insured employers, to fully-insured plans, to Medicare Advantage, to CMS. Link.

    • Zach Markin shared his thoughts on the Babylon SPAC, diving into a number of questions about the approach. His concerns echo a lot of what we heard in survey responses (see below) - questions about proof of Babylon’s claims, etc. Worth checking out if you want to see a thorough bearish perspective on the company. Link.


  • The results from our bull / bear poll on Babylon are in, with a significant majority of people who responded taking the bear position - only 6 out of 35 respondents (17%) were bullish:

    Again, the bear responses were more numerous, lengthy, and detailed - here were some interesting themes on each side:

    Bull Cases: Seemed to focus on the international opportunity that Babylon has in front of it:

    While US healthcare is hard, I think we can see that the company has been effective in UK and has a good foothold in APAC. That kind of scale will be very helpful in the US compared to the long list of competitors e.g., 98point6, Curai, Buoy, K Health, Teladoc, etc. While some would point to lack of focus on the US market commercialization, I am bullish on tech stack and operational scale, which will convert to low cost leader.

    Have already seen UK success in VBC approach - rolling out to other countries makes logical next step.

    Bear Cases: Many of the responses focused on the general lack of proof supporting Babylon’s claims and skepticism around its ability to manage risk successfully:

    If Agilon couldn’t manage the PCP group profitably, I’m not sure how Babylon can magically get 30% profit margin on 75% MLR subcap per their own chart.

    Doesn't seem like they have a real idea (let alone proven model) about how to manage costs and scale effectively. Winning companies have a scalable, repeatable process--Babylon still seems like they are throwing a bunch of random stuff on the wall and seeing what sticks and then call that their process.

    There's not much data to substantiate their cost savings argument to make VBC profitable. They have some (flimsy) data around ER utilization reduction, but I didn't see much data around reducing other, more substantial drivers of healthcare spend. I'm also curious what their engagement numbers look like for their consumer-facing technology, and how often members are *actually* using the tech.

    Babylon has shown no signs of being able to handle a large, clinically complex population. The Hammersmith and Fulham report made it clear that their UK practice was almost exclusively young, affluent, and healthy, without complex chronic or polychronic needs. I have no faith in Babylon being able to manage their costs or population when clinical complexity increases.


  • Axle Health, an in-home healthcare platform and provider start-up, is hiring for a software engineering roles. Link.

  • CareJourney, a value-based care analytics/IT start-up, is hiring a UX Designer. Link.

  • CoachMe Health, a health coaching non-profit focused on low-income patients with diabetes and heart disease, is hiring a Product Ops Manager. Link.

  • Firefly Health, a virtual first primary care and behavioral health start-up, is hiring a Product Manager. Link.

  • Health Evolution, an organization that brings together industry leaders to collaborate on different topics, is hiring a Manager or Director. Link 1. Link 2.

  • Icario, a platform helping health plans engage members, is hiring a number of roles across client services, tech, operations, product, and more. Link.

  • Limbix, a mental health digital therapeutics platform start-up, is hiring an Associate Product Manager. Link.

  • Medical Alley, an association focused on building health care innovation in Minnesota, is looking for a start-up focused intern. Link.

  • Perx Health, a digital care start-up focused on chronic condition management, is hiring for BD and Engineering roles. Link 1. Link 2.