After an OPI drought in digital health of years, two companies with the health of the hinge, focused on musculoskeletal care, and the health of Omada, specialized in chronic disease management, have been made public this year. The renewed activity follows a 2021 increase in Digital Health OPI that largely did not meet expectations.
So, what has the risk capitalist learned in this period about health technology in public markets? This question raised the duration of a recent discussion panel at the AHIP 2025 conference held in Las Vegas. The session was modernized by Bill Evans, founder and general partner of Rock Health Capital, a seed fund.
One of the panelists said it is great to see public markets interested in digital health again. However, enthusiasm is tempered.
“You still need to come with a solid business and [profit and loss]And there is always that compensation child between the growth and profitability that public markets are seeing, “said Kurt Shelline, a partner of Echo Health Ventures.” If you are not profitable, it is better that you are growing rapidly. And if you are not growing fast, it is better that it is a fairly high margin business. And everything else is a child or in this strange and not safe land.
“Speaking for our portfolio, there are some large companies that are still deprived at a scale, growing fast, solid margins and trying to deal with that exchange, and the moment of when that exchange reaches the [profit and loss] To be able to make public, “he added.
Another investor pointed out that the “DOERE too open” a few years ago when there was an increase in digital health companies that were made public. Since then, many of these companies have had a lower performance. This hindered other companies to become public in the following years.
“I think it is greatly positive now that we have Basis and Omada who just left,” said Siobhan Nolan Mangini, Venrock partner. “That said, the bar is super tall. And I think it is a growth and profitability. If you have heard of the 40 rule, you want to ensure that its growth and its Ebitda margins are basically north of 40%.
Amy calls Raimundo, vice president and managing director of Kaiser Permanent Ventures, said that health technology companies are returning to the foundations. In 2021, digital health became very exciting after COVID and there was a lot of “exuberance”, but the “foundations are there,” said Raimundo. He pointed out that Kaiser Permanent has been an investor in the health of Omada since 2014.
“Having to go out with good foundations is, I think, the next wave,” he said. “That there is an exit market here, which will generate more investments.”
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