Capital Raising Activity

Verily Life Sciences, the healthcare arm of Google, raises $800 million from Singapore government’s investment arm, Temasek

Google has always been known for chasing dreams; many have come to be realized. Verily has multiple mandates including finding a cure for aging, building surgical robotics, making actual bugs to combat disease transmission, etc.. Clearly, these are admirable goals, but shareholders want to de-risk the investment and have a partner to shoulder some of the costs. Temasek writes big checks ($180 billion of assets under management) and is willing to be a long-term partner. This is the perfect marriage.

It should be noted that this is a minority investment but it comes with a board seat. The funds will be allocated to Verily over a few years. We are told that Verily has about $10 million in revenue mostly from licensing and not actual sale of products.

New York-based Flatiron Health raises $175 million led by Roche, bringing the total equity raise to over $300 million

This is not just a capital injection. Roche has committed to buying several of Flatiron’s products. The company engages in building large data pipelines for oncology coupled with its own self-tailored EMR systems.  These are big bets, but then again oncology is a huge market. We will see more investments by pharma into HIT companies. This is the classic power struggle between the disciplines of chemistry vs. technology. Pharma knows that they need both.

PointClickCare based in Mississauga, ON receives $85 million from Dragoneer, JMI and other investors

Dragoneer is a powerful public/private investment fund based in San Francisco. The company has invested in companies like Spotify, Airbnb and others. Their presence here is a big sign of endorsement.  PointClickCare sells a variety of software solutions into the senior care market; one of the highest growth sectors of healthcare. The company competes with other successful firms such as Homecare Homebase and Kinnser Software.

Weight loss balloon maker, Allurion based in Wellesley, MA raises $19 million from angel investors

Addressing obesity is a big business but not everybody can afford surgical remedies. Allurion’s technology is an ingestible capsule. Once the capsule reaches the patient’s stomach a doctor or a nurse fills the balloon with liquid to make the patient feel full and eat less. The balloon stays in for four months. The device has received approval in Europe. The company hopes for its FDA approval this year. This is certainly a novel idea with great promise.

Comprehend System, based in Palo Alto, CA raises $15 million from Sequoia

Sequoia is undoubtedly one of the most successful VC’s in the world. They were an early investor in Comprehend back in 2013. The company has raised over $45 million to date and is in the business of quality control and monitoring of clinical trials. We all know that the industry is mired with paperwork, inefficiencies and high error rate – anyone that can create some serious quality control here will be a big winner.

Patient identity firm, Verato based in Mclean, VA raises $12.5 million of Series B

Bessemer Ventures and Columbia underwrote the first round of funding for the company in Jan 2015 for the same amount. They are the only two investors in the current round.

What Verato addresses is a big problem in many industries. For example, Master Patient Index (MPI) finds only 60-70% of the consistencies. Through its Verato DIAGNOSE, the company not only stores out of date and incorrect data but also the most up-to-date attributes. They claim that this type of matching can create 98% accuracy.

HealthReveal based in New York, NY announces $10.8 million Series A funding from GE Ventures,  Greycroft and others

There are many ways to bend the cost curve of healthcare. Evidence based medicine and anticipating gaps in care are probably some of the most important ways for cutting costs.

HealthReveal can anticipate and mitigate adverse medical events for individuals with chronic diseases. Their customers range from providers to payers and self-funded employers. HealthReveal’s analytics engine ingests a variety of data sets including real time stream of clinical information, biometric and operational data. Although there are already a handful of companies in the market that are doing the same thing, we like the fact that the management comes from both the payer and the provider organizations.

Ascension Ventures invests $10 million in Northbrook, IL-based IMO

Intelligent Medical Objects is one of the most important companies in the healthcare sector. Their medical terminology powers many of the EMRs who use the solutions to capture the physicians’ clinical intent. Warburg Pincus took a majority stake in the company last September.

Ascension’s investment arm is one of the most successful strategic investors in the healthcare industry. The fund has multiple LPs that represent other health systems which, between them, cover 474 hospitals. That is a powerful machine that can be put to use to expand IMO’s market reach.

Afsaneh Naimollah

Xen Partners

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Palo Alto, CA 94301
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Afsaneh@XENPartners.com
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