PATIENT-CENTRIC CARE DRIVES HEALTHCARE IT AND TELEHEALTH MARKETS - HEALTHCARE IT INDUSTRY UPDATE | MAY 2021
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PATIENT-CENTRIC CARE DRIVES HEALTHCARE IT
AND TELEHEALTH MARKETS
HEALTHCARE IT INDUSTRY UPDATE | MAY 2021
3
TABLE OF CONTENTS
Key Industry Takeaways 4
Industry Outlook 5
Key Trends & Drivers 6
Enterprise Activity 7
M&A Overview 8
Notable Transactions 9
Select Transactions 10
Buyer Universe 12
Financing Activity 13
Public Company Data 14
Report Contributors 15
Firm Track Record 16
Endnotes 17
CONTACT OUR HEALTHCARE IT
INDUSTRY EXPERTS
David DeSimone
Managing Director
617-619-3324
ddesimone@capstonepartners.com
David Michaels
Managing Director
Head of TMT Practice
858-926-5950
dmichaels@capstonepartners.com
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Healthcare IT Industry
Patient-centric Care Drives HCIT & Telehealth Markets
KEY INDUSTRY TAKEAWAYS
Capstone Partners’ Technology, Media, and Telecom (TMT) Group is pleased to share its Healthcare
Information Technology (HCIT) report. Through our analysis of emerging enterprises in the space and the
evolution of virtual care, we have identified several key takeaways below, followed by an in-depth overview of
industry dynamics on the following pages.
1. HCIT transformed the Healthcare industry amid COVID-19, enabling patients and providers to connect
through online platforms for virtual consults, medication delivery, and health record documentation.
2. Healthcare providers increasingly invested in cloud infrastructure and artificial intelligence to bolster
IT bandwidth and workflow automation enterprise-wide.
3. The entrance of non-traditional players in the HCIT industry has created a heavily fragmented market,
with enterprises extending telehealth offerings beyond employees and their families.
4. Strategic and private equity buyers in the sector are well-capitalized and increasingly focused on
acquiring targets with proprietary platforms to propel growth in 2021.
5. Venture capital funding reached record levels in 2020, with investors shifting focus to sector-specific
providers and larger funding transactions.
Capstone Partners has developed a full suite of corporate finance solutions, including M&A advisory, debt
advisory, financial advisory, and equity capital financing to help privately owned businesses and private equity
firms through each stage of the company’s lifecycle, ranging from growth to an ultimate exit transaction.
To learn more about Capstone’s wide range of advisory services and Healthcare IT industry expertise, please
contact Capstone Managing Director David DeSimone.
4
Healthcare IT | May 2021
INDUSTRY OUTLOOK
Healthcare information technology (HCIT) played a
key role in the transformation of the Healthcare
Five Stages for Healthcare Institutions
industry in 2020, with elevated demand for virtual
care offerings and streamlined processes
instituted across modalities. As a result, the 1. Resolve: Industry players, including
Healthcare industry underwent five stages of governments and providers,
evolution (resolve, resilience, return, reimagination, determined the scale, pace, and depth
and reform) to combat COVID-19 through digital of the action necessary to address
solutions, according to McKinsey & Company.1 COVID-19.
With the rollout of COVID-19 vaccines in 2021, HCIT
2. Resilience: Healthcare institutes and
companies have partnered with manufacturers to
business leaders prepared for the
track the effectiveness and distribution among
rapid succession of financial
eligible participants. For example, China’s leading
challenges including liquidity,
healthcare community platform DXY partnered
solvency, and profitability hurdles.
with vaccine manufacturer Pfizer (NYSE:PFE) to
provide accessible vaccination records. 3. Return: Returned businesses to
operational health amid shutdowns
Telehealth companies have expanded to provide and continued to provide care to
additional digital capabilities such as prescription patients with time-sensitive or
delivery and remote monitoring. Notably, 57% of immediate needs.
consumers are open to in-home care and remote
monitoring through wearable devices, according to 4. Reimagination: Technological
Accenture.2 Publicly traded telehealth companies solutions were heavily adopted to
recorded a total return of +77.7% from January 1, provide telehealth services,
2020 to May 17, 2021, outpacing the Nasdaq and prescription delivery services, and
broader HCIT market. Public players experienced a manage remote operations.
surge in annual revenue, led by Teledoc Health’s
(NYSE:TDOC) 145% increase in revenue in 2020 5. Reform: Industry participants
($1.1 billion) compared to the 2019 ($553.3 million), continue to shift business models to
according to its Q4 2020 earnings call.3 integrate IT solutions, elevating the
accessibility of health services with a
Strong industry tailwinds and the innovations focus on patient-centric care.
outlined on the following pages have led to record
levels of venture capital investments and
Source: McKinsey & Company
heightened merger and acquisition (M&A) activity
in 2020 and 2021 year-to-date (YTD).
Capstone Telehealth Index Outpaces HCIT Index & Nasdaq
Capstone Telehealth Index Capstone HCIT Index Nasdaq Composite Index
Index Value Percent Change
400%
300%
200%
+77.7%
100%
0%
-100%
Jan-20 Mar-20 May-20 Jul-20 Sep-20 Nov-20 Jan-21 Mar-21 May-21
Source: Capital IQ and Capstone Research as of May 17, 2021
Telehealth Index Includes: AMWL, HIMS, LFMD, OTRK, TDOC
HCIT Index Includes: ACCD, MDRX, ASCN, BNFT, CSLT, CERN, CHNG, EVH, HSTM, GOCO, INOV, OMCL, ONEM, PINC, VCRA, IQV
5
Healthcare IT | May 2021
KEY TRENDS & DRIVERS
18.1% ANNUAL GROWTH FOR HCIT
CLOUD INFRASTRUCTURE
Digital front door systems originated with Zipnosis,
Inc., developer of an automated virtual care
platform to maximize clinician’s time and provide
HCIT industry participants combated elevated patients with a greater choice of care. Zipnosis’s
production challenges at the height of the Digital Front Door® is designed for third-party
pandemic, driven by significant supply chain healthcare providers as a platform to increase
disruptions. Demand for HCIT hardware including patient access and reduce clinical burnout.
laptops, tablets, mobile devices, and computer
chips substantially outpaced supply, which led to The entrance of non-traditional players in the HCIT
the refurbishment of existing systems for remote industry has created a heavily fragmented market.
work. Funds reserved for new hardware were Enterprises have disrupted the already
repurposed by organizations to support revenue competitive market with a range of consumer-
disruptions, contingency plans, and to invest in focused healthcare services including prescription
cloud infrastructure. delivery, virtual consultations, and in-home visits.
Although the offerings were originally introduced
The increase in data collected by industry players to employees, enterprises have expanded to serve
from remote care, electronic health records, and the broader market (see page seven).
prescription information propelled the adoption of
cloud infrastructure to effectively manage the
large volume of data and increase IT bandwidth.
With this shift, the Global Healthcare IT Cloud
44% OF HEALTHCARE LEADERS
INCREASED AI INVESTMENT
market is expected to reach $64.7 billion by 2025 Healthcare providers have experienced workflow
with a compound annual growth rate (CAGR) of and processing challenges as COVID-19 exposed
18.1%, according to Markets and Markets.4 weaknesses in providers’ data intelligence.
Historically, artificial intelligence (AI) automation
Global Healthcare IT Cloud Market tools have been used in the Healthcare industry
$100 for specific use cases. During COVID-19 44% of
healthcare leaders reported an increase in AI
U.S. Dollars in Billions
$80 investments enterprise-wide to enhance clinical
$64.7 decision-making regarding virtual care, according
$60 $54.7
$46.3 to the Center for Connected Medicine.6 AI tools
$39.2 providing operational efficiency are also in high
$40 $33.2
$28.1 demand as healthcare facilities track remote
patient utilization and manage revenue cycles.
$20
Notably, Microsoft Azure collaborated with UC San
$0 Francisco's Center for Digital Health Innovation
2020 2021 2022 2023 2024 2025 (CDHI), Fortanix, and Intel to establish CDHI’s
BeeKeeper AI, a platform generating a clinical
Source: Markets and Markets
algorithm to bolster confidential data access.7
70% OF PATIENTS PREFER DIGITAL
FRONT DOOR HEALTH SYSTEMS
Effects of COVID-19 on AI Investment
3%
COVID-19 has presented a paradigm shift in the 9%
HCIT industry, with providers increasing focus on Decreased Investment
patient-centric solutions, particularly digital front Unsure 44%
door systems. With 70% of patients preferring No Impact
consolidated digital health solutions, digital front Increased Investment
44%
door systems provide a variety of telehealth and
telemedicine offerings on a single platform
allowing consumers to select specific providers,
according to L&T’s Digital Front Door Survey.5 Source: Center for Connected Medicine
6
Healthcare IT | May 2021
ENTERPRISE ACTIVITY
In response to COVID-19 and the need for prompt digital health solutions, many leading companies have
focused on launching or expanding virtual health solutions for their customers and employees. Select
enterprises and their growth initiatives are outlined below.
Amazon.com, Inc. (Nasdaq:AMZN) launched Amazon Care 18 months ago
to provide Amazon employees and their families access to medical care
through its proprietary platform. The service allows employees to
connect with medical professionals through an online chat forum or
video conferencing. The Amazon Care application (app) connects its
employees directly with nurses and doctors via in-app messaging or
video. Amazon Care also operates as a digital front door, dispatching
Founded: 1994 medical professionals to a patient’s home and delivering prescriptions.
Ownership: Publicly Traded (NAS:AMZN)
Stock Price as of 5/17/21: $3,222.90 As of March 2021, Amazon expanded Amazon Care to provide virtual
Headquarters: Seattle, WA health services to all Amazon employees in the U.S. and other
FY 2020 Revenue: $386.1 Billion
Washington-based companies, according to a press release.8
CVS Health Corp. (NYSE:CVS) through its subsidiary, CVS Caremark,
operates a digital health platform specializing in prescription benefit
management (PBM). For consumers, the platform enables patients to
order prescriptions online or via mobile app, in addition to checking
prices and processing digital payments.
CVS also provides a Point Solutions Management platform for health
Founded: 1963 plan sponsors to manage and contract third-party digital health tools.
Ownership: Publicly Traded (NYSE:CVS) Launched in 2019, CVS has grown the platform by adding specialized
Stock Price as of 5/17/21: $84.33 health applications to its database. Notably, Hinge Health, Hello Heart,
Headquarters: Woonsocket, RI
Livongo, Torchlight, and Whil were added to the platform in March 2021,
FY 2020 Revenue: $268.0 Billion
as stated in a press release.9
Walmart Inc. (NYSE:WMT) partnered with Doctor on Demand, Inc. in
January 2020 to provide telehealth services to its employees and their
families through a Walmart-operated portal. At the start of COVID-19,
Walmart opened its platform to enable customers to access virtual
health consultations from Doctor on Demand’s medical professionals.
Additionally, Walmart announced its initiative to provide customers
access to their electronic health records in March, beginning with
Founded: 1962 COVID-19 vaccine records, according to a press release.10
Ownership: Publicly Traded (NYSE:WMT)
Stock Price as of 5/17/21: $139.52 Furthermore, Walmart enhanced the digital capabilities of its
Headquarters: Bentonville, AR pharmacies with the acquisition of CareZone, developer of a healthcare
FY 2020 Revenue: $524.0 Billion
platform to streamline pharmacy delivery services (June, $200 million).
7
Healthcare IT | May 2021
M&A OVERVIEW
Demand in the HCIT industry accelerated in 2020 Healthcare IT M&A Volume
as COVID-19 forced healthcare providers to adapt
to remote care. This has been reflected in
400
heightened M&A activity in 2020, increasing 36%
year-over-year (YOY) and outpacing 2019 in each 350
Number of Transactions
quarter, reaching a total of 293 transactions. 293
300
Following record levels in Q1 2020, deal volume
dipped in Q2 and Q3 as top healthcare providers 250 216
focused internally to defend revenues and mitigate 184 195
200
risk attributed to delayed elective procedures and
141
non-urgent healthcare visits. With the adoption of 150 117
software services and telehealth, transaction
100
volume rebounded in Q4, resulting in an increase
of 27% quarter-over-quarter (76 deals). M&A 50
activity has continued to thrive in 2021 YTD, with
0
141 deals announced or completed as strategic and
private equity (PE) buyers identified HCIT’s 2017 2018 2019 2020 YTD '20 YTD '21
indisputable impact on the distribution and
accessibility of digitally-based healthcare
products and services.
Strategic buyers accounted for ~61% of
transactions in 2020, as HCIT companies sought
synergistic opportunities to integrate additional 2020 Buyer Breakdown
capabilities within existing frameworks. Notably,
Hinge Health, Inc. announced its acquisition of
Thimble Bioelectronics, Inc. to amalgamate STRATEGIC 15.7%
Thimble’s wearable pain relief sensor and mobile Public 32.5%
application with Hinge Health’s application for Private
tracking chronic pain levels (March, undisclosed).
PE add-on acquisitions represented 33% of deals FINANCIAL
in 2020 and 37% in 2021 YTD, outpacing the Platform
greater Healthcare market as firms looked to Add-on 45.7%
6.1%
efficiently bolster digital health offerings for
existing portfolio companies. Of note, The Carlyle
Group-backed Grand Rounds Inc. announced its
merger with Doctor on Demand, Inc. to create a
combined entity providing telehealth and patient Year-to-date (YTD) ended May 17
advocacy tools (March, undisclosed). Source: Capital IQ, PitchBook, FactSet, and Capstone Research
8
Healthcare IT | May 2021
NOTABLE TRANSACTIONS
Optum, Inc. to Acquire Change Healthcare, Inc.
(January 2021, $13.5 Billion, 5.6x Revenue)
UnitedHealth Group’s (NYSE:UNH) Optum, Inc., developer of a health care system
designed to connect patients and providers across the healthcare ecosystem,
announced its acquisition of Change Healthcare, Inc. (Nasdaq:CHNG) in January for $13.5
billion (equivalent to 5.6x revenue). Change Healthcare provides software, data analytics,
research, revenue cycle management, and technology-enabled services for the
Healthcare industry. Following Optum’s acquisition of AbleTo in the Telehealth market,
To Acquire this acquisition will bolster Optum’s clinical-analytics capabilities and technology to
integrate evidenced-based criteria into clinician workflow management and optimize in-
person and virtual visits.
“This opportunity is about advancing connectivity and accelerating innovations and
efficiencies essential to a simpler, more intelligent and adaptive health system,”
commented Neil de Crescenzo, CEO of Change Healthcare, and future CEO of
OptumInsights, according to a press release.11 The deal exemplifies the larger movement
of consolidation to improve patient outcomes and reduce costs.
WELL Health Technologies Corp. Announced Three Acquisitions in Q1 2021
WELL Health Technologies Corp. (TSX:WELL), owner and operator of a portfolio of primary
health clinics delivering clinical, electronic medical record, and digital health services,
announced or completed six acquisitions in Q4 2020 and three in Q1 2021. WELL Health
attributed its 51% total annual revenue increase in 2020 ($50.2 million) to the acquisitions
made over the past year, specifically highlighting the software and telehealth revenue
increase of 393% for the year ($12.3 million) in its investor presentation.12 Summarized
To Acquire below are WELL Health’s three acquisition targets in Q1 2020.
• Intrahealth Systems Limited (March 2021, $15.2 Million) - Intrahealth Systems
Limited, developer of medical software solutions, entered into a definitive
agreement to be acquired by WELL Health in March for an enterprise value of
$15.2 million. Based in Auckland, New Zealand, Intrahealth’s software platform
supports mobile care, virtual care, and telehealth solutions, serving hospitals,
public health outpatient centers, and home care providers.
&
• CRH Medical Corp. (February 2021, $426.2 Million) - WELL Health announced
their acquisition of CRH Medical Corp. (TSX:CRH), a healthcare products and
services company, for an enterprise vale of $426.2 million in February. CRH
utilizes its proprietary platform, CRH O’Regan System, to distribute, market,
and track services directly to gastroenterologists. The company specializes
&
in single-use, disposable hemorrhoid treatment in the U.S. and Canada.
• Open Health Software Solutions, Inc. (January 2021, Undisclosed): WELL
Health acquired Open Health Software Solutions, Inc. in January for an
undisclosed sum. Open Health provides services for installing and supporting
affordable software and hardware for the healthcare community. Its services
include software assessment, readiness assessment, and electronic medical
record integration and adoption.
9Healthcare IT | May 2021
SELECT TRANSACTIONS
Enterprise EV / LTM
Date Target Acquirer Target Business Description Value (mm) Revenue EBITDA
d-Wise Provides software solutions and IT consulting services
03/22/21 Instem (AIM:INS) $31.0 - -
Technologies to Healthcare and Life Sciences industry.
Develops an online platform allowing patients to consult
03/16/21 Doctor on Demand Grand Round - - -
doctors and healthcare providers.
Cumberland Offers healthcare consulting services to implement
03/16/21 Tegria - - -
Consulting technologies to maximize operational efficiency.
Compel Capital Provides COVID-19 digital passport medical services
03/11/21 GoStop - - -
(CNSX:SCRN) through a digital medical passport.
Develops software products and IT solutions to help
03/09/21 Bio-Optronics Advarra - - -
healthcare professionals in optimizing workflow.
Provides a platform that automates patient care
03/09/21 Karuna Health Commure - - -
management tasks for hospitals.
Thimble Develops wearable devices and applications that tracks
03/09/21 Hinge Health - - -
Bioelectronics patient progress towards reducing pain.
WELL Health Tech. Provides electronic medical records (EMR) and clinical
03/08/21 Intrahealth Systems $15.2 - -
(TSX:WELL) healthcare software solutions.
Designs and develops electronic health records and
03/04/21 Bizmatics N. Harris Computer - - -
health practice management software.
03/03/21 BlipIQ BioIQ Provides SaaS-based telehealth to healthcare providers. - - -
Provides online and on-demand telehealth delivery
02/26/21 MDLIVE Evernorth - - -
services and software.
HGE Health Care Vapotherm Develops a clinical services platform enabling providers
02/24/21 $24.5 - -
Solutions (NYSE:VAPO) and patients to track day-to-day symptoms.
Mind Medicine Provides an artificial intelligence based digital
02/18/21 Healthmode $33.2 - -
(OTCPK:MMED.F) measurement solutions for medicine and clinical trials.
Offers SaaS-based track and trace solutions for the
02/16/21 rfxcel Antares Vision $150.0 8.8x -
pharmaceutical supply chain.
Nuance Comm. Designs and develops a mobile AI assistant to automate
02/08/21 SayKara - - -
(NAS:NUAN) clinical documentation for physicians.
Provides a platform that provides health information for
02/03/21 Lab Tests Online OneCare Media - - -
patients, caregivers, and medical professionals.
Park Place Offers healthcare information technology (IT) solutions
02/01/21 ABRY Partners - - -
International including cloud and IT infrastructure solutions.
Develops and offers software and mobile applications to
01/28/21 Docent Health GetWellNetwork - - -
organize and monitor patient care.
Preventice Boston Scientific Provides healthcare solutions by utilizing portfolio of
01/21/21 $1,153.1 7.3x -
Solutions (NYSE:BSX) services, sensors, and software.
Discovery Health MultiPlan Offers cloud-based healthcare cost solutions to
01/21/21 $155.0 - -
Partners (NYSE:MPLN) healthcare providers and payers.
Capsule Koninklijke Philips Provides device connectivity solutions that enable
01/19/21 $635.0 6.4x -
Technologies (ENXTAM:PHIA) medical device manufacturers to deliver wireless health.
Offers patient-centric telehealth engagement and
01/19/21 TouchPointCare CareXM - - -
monitoring solutions for healthcare providers.
Beyond Medical Develops an artificial intelligence-based healthcare
01/14/21 Kayan Health - - -
(OTCPK:DOCK.F) platform for streamlining communications.
Source: Capital IQ, PitchBook, FactSet, and Capstone Research
10Healthcare IT | May 2021
SELECT TRANSACTIONS (CONTINUED)
Enterprise EV / LTM
Date Target Acquirer Target Business Description Value (mm) Revenue EBITDA
Innovation Accolade Provides medical video consultation services for
01/14/21 $433.8 12.4x -
Specialists (NAS:ACCD) physicians and patients.
Offers an application to simplify the healthcare provider
01/13/21 Avhana Health Amalgam Rx - - -
workflow integrated with their EHR.
Advanced Medical Develops an application that allows members to shop
01/12/21 Drexi - - -
Pricing Solutions for the lowest priced prescriptions in their area.
Mavens Designs, builds, and implements software used by
01/11/21 Komodo Health - - -
Consulting healthcare professionals, patients, and consumers.
Change Healthcare Provides data analytics solutions to enhance patient
01/06/21 Optum $13,547.9 5.6x -
(NAS:CHNG) engagement in the healthcare system.
Develops a healthcare communication platform for
12/24/20 Updox EverCommerce - - -
records sharing and virtual care for patients.
Tenet Healthcare Provides a health care platform for urgent care needs.
12/18/20 FastMed Urgent Care $80.0 - -
(NYSE:THC)
WELL Health Tech. Develops a cloud-based software, which provides
12/17/20 Adracare - - -
(TSX:WELL) services for managing electronic health records.
Highmark Stormcrow Provides software development services for health care
12/11/20 $12.9 - -
Innovations (TSXV:CROW.P) providers including medical diagnostics.
myClinical HealthStream Develops a SaaS application that allows healthcare
12/10/20 - - -
Exchange (NAS:HSTM) organizations to track rotations of healthcare staff.
Comprehensive Offers a healthcare administrative software for the
12/09/20 Greenstone Capital - - -
Healthcare Systems healthcare industry.
Designs artificial intelligence-based prior authorization
12/03/20 Verata Health Olive AI $120.0 - -
process software solutions for healthcare providers.
Provides a virtual care management (VCM) platform for
11/30/20 VirTrial Signant Health - - -
the health care industry.
CompuGROUP Offers integrated HER and digital management solutions
11/23/20 e-MDs $240.0 2.7x 18.2x
Holding for physician practices and enterprises.
Cloudbreak GigCapital2
11/23/20 Provides telehealth and language access services. $139.0 - -
Health (NYSE:GIX)
Health Care Carebook Tech. Develops a health navigation platform software for
11/19/20 $11.5 3.3x -
Services Intl. (TSXV:CRBK) healthcare organizations and individuals.
WELL Health Tech. Offers an online telehealth platform which connects
11/09/20 INSIG $36.3 - -
(TSX:WELL) patients with healthcare providers.
Grifols Shared Provides Web and handheld-based software solutions
11/09/20 Goetech $122.9 - -
Services to hospitals and retail pharmacies.
WELL Health Tech.
11/02/20 DoctorCare Develops billing and optimization software for doctors. $13.5 5.1x 17.0x
(TSX:WELL)
Medical CloudMD Provides a health care navigation platform which
10/22/20 $5.1 3.3x -
Confidence (TSXV:DOC) connects individuals with health care providers.
Canadian Medical CloudMD Offers an online directory of profile and contact
10/21/20 - - -
Directory (TSXV:DOC) information on physicians and nurse practitioners
Develops care coordination software solutions to
10/13/20 CarePort Health WellSky $1,350.0 13.0x 21.0x
manage patient transitions.
HealthStream Designs and develops healthcare workforce
10/12/20 ShiftWizard $32.0 - -
(NAS:HSTM) management software solutions.
Source: Capital IQ, PitchBook, FactSet, and Capstone Research
11Healthcare IT | May 2021
BUYER UNIVERSE
Capstone has built relationships with and tracked buyers that have been highly acquisitive in the Healthcare IT
industry, particularly those that have completed notable HCIT transactions. Our industry expertise and network
provides us with unique insights into this buyer universe and industry and growth drivers for the companies
within it.
Leading Strategic Buyers
Leading Financial Buyers
Source: Capstone Research
12Healthcare IT | May 2021
FINANCING ACTIVITY
Patient-driven care has heightened demand in the HCIT industry as providers have adapted to the remote
healthcare environment. Emerging startup companies and enterprises expanding digital capabilities saw a rise in
venture capital funding among HCIT providers, with total funding setting an annual record of $14.1 billion in 2020,
an increase of 93% YOY. Total venture capital transaction volume experienced an uptick of only 1% in 2020 (1,449
deals) YOY, as investors focused on sector-specific providers and much larger funding transactions. Total
venture capital funding and deal volume in Q1 2021 has been on pace with the prior quarter. Highlighted below
are several notable venture funding deals from Q1 2021 and Q4 2020.
Healthcare IT Venture Capital Raises
(2010 – 2020)
Total Volume Total Value
2,000 $20.0
Number of Transactions
1,750
$14.1
U.S. Dollars in Billions
1,500 $15.0
1,250
$8.9 $7.3
1,000 $7.5 $10.0
750 $5.4
$3.6 $3.9
500 $1.5 $2.2 $5.0
$1.3
250 $0.7
287 398 641 832 1,101 1,253 1,361 1,466 1,436 1,449
0 175 $0.0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Source: PitchBook and Capstone Research
NOTABLE VENTURE CAPITAL TRANSACTIONS
GoForward, Inc., operator of concierge primary care clinics, secured $225 million in series
D funding in March, led by SoftBank Group. GoForward offers a subscription-based
package through its mobile app to provide patients with real-time blood testing and
home monitoring of vitals. The funding will be utilized to enhance its Forward at Home
program, sending patients specialized sensors for remote care and progress tracking.
San Francisco-based Hinge Health, Inc., provider of digital healthcare kits to treat chronic
musculoskeletal conditions (MSK), raised $300 million in series D funding led by Tiger
Global Management in January. With a 300% revenue increase in 2020 and a post-
money valuation of $3 billion, investors expect revenue to triple in 2021, according to a
press release.13
China’s leading healthcare community platform, DXY, secured $500 million in series E
funding in December, led by TrustBridge Partners. DXY’s platform connects Chinese
consumers with healthcare organizations such as Pfizer (NYSE:PFE) for medical
consultations. The funds will be utilized to strengthen cooperation with hospitals and
pharmaceutical companies as it continues to provide real-time COVID-19 tracking.14
ScriptDrop, Inc., a startup developer of a prescription delivery platform, secured $15
million in series A funding in October, generating a $130 million post-money valuation.
“They [ScriptDrop] were bringing their health care expertise to a new company, including
technology and cybersecurity knowledge, along with partnerships with major pharmacy
chains,” commented lead investor and Ohio Innovation Fund Managing Director Bill
Baumel, according to a press release.15
13Healthcare IT | May 2021
PUBLIC COMPANY DATA
Price % 52 Wk Market Enterprise LTM EV / LTM
Company 05/17/21 High Cap Value Revenue EBITDA Margin Revenue EBITDA
Accolade, Inc. $42.51 65.1% $2,494.1 $2,060.2 $170.4 NM NA 12.1x NM
Allscripts Healthcare Solutions, Inc. $16.94 94.3% $2,391.3 $2,157.7 $1,489.7 $76.6 5.1% 1.4x 28.2x
Ascom Holding AG $15.40 88.1% $554.4 $540.2 $317.6 $16.7 5.3% 1.7x NM
Benefitfocus, Inc. $14.22 80.9% $471.8 $634.2 $267.1 $32.2 12.0% 2.4x 19.7x
Castlight Health, Inc. $1.80 76.3% $284.3 $240.5 $142.7 $1.7 1.2% 1.7x NM
Cerner Corporation $76.80 91.2% $23,141.2 $23,534.0 $5,481.8 $1,299.7 23.7% 4.3x 18.1x
Change Healthcare Inc. $22.88 94.5% $6,973.5 $11,797.8 $2,432.1 $0.0 0.0% 4.9x NM
Evolent Health, Inc. $19.98 89.4% $1,706.2 $1,766.7 $1,016.3 $7.6 0.7% 1.7x NM
HealthStream, Inc. $25.87 97.6% $816.0 $787.7 $246.7 $36.2 14.7% 3.2x 21.8x
GoHealth, Inc. $11.44 43.6% $1,143.9 $2,322.0 $940.5 $44.5 4.7% 2.5x NM
Inovalon Holdings, Inc. $30.71 98.2% $4,786.7 $5,675.9 $690.5 $204.4 29.6% 8.2x 27.8x
Omnicell, Inc. $131.91 89.7% $5,697.2 $5,679.1 $914.4 $99.4 10.9% 6.2x NM
One Medical (1LifeHealthcare) $32.76 54.8% $4,497.6 $4,287.3 $422.8 NM NA 10.1x NM
Premier, Inc. $34.34 90.9% $4,198.7 $4,749.5 $1,582.4 $406.3 25.7% 3.0x 11.7x
Vocera Communications, Inc. $33.34 60.0% $1,145.8 $1,070.7 $206.4 $7.8 3.8% 5.2x NM
IQVIA Holdings Inc. $234.04 98.6% $44,856.4 $55,365.4 $12,014.0 $1,981.0 16.5% 4.6x 27.9x
EV = enterprise value; LTM = last twelve months Mean 11.0% 4.6x 22.2x
$ in millions, except per share data
NM = Not Meaningful, above 30x EBITDA Median 8.1% 3.7x 21.8x
Harmonic Mean NA 3.1x 20.3x
PUBLIC COMPANY DATA: TELEHEALTH
Price % 52 Wk Market Enterprise LTM EV / LTM
Company 05/17/21 High Cap Value Revenue EBITDA Margin Revenue EBITDA
American Well Corporation $11.71 26.8% $2,822.5 $1,853.5 $249.2 NM NA 7.4x NM
Hims & Hers Health, Inc. $8.84 34.8% $1,695.4 $1,845.1 $171.0 NM NA 10.8x NM
LifeMD, Inc. $8.78 26.6% $228.9 $219.4 $51.2 NM NA 4.3x NM
Ontrak, Inc. $32.18 32.2% $570.8 $527.8 $99.2 NM NA 5.3x NM
Teladoc Health, Inc. $139.68 45.4% $21,584.2 $22,290.6 $1,366.8 NM NA 16.3x NM
Mean NA 8.8x NA
Median NA 7.4x NA
Harmonic Mean NA 7.0x NA
Source: Capital IQ as of May 17, 2021
14Healthcare IT | May 2021
HEALTHCARE IT REPORT CONTRIBUTORS
David DeSimone
Managing Director
ddesimone@capstonepartners.com | 617-619-3324
David is a Managing Director in the Technology Media & Telecom Group. David brings
more than 20 years of investment banking experience to Capstone Partners and will
help expand the firm’s technology sector coverage. David has worked on equity, debt
and M&A transactions collectively valued at more than $4 billion. Previously, David was a
member of the Capstone team for nearly seven years where he led efforts in the
Technology Solutions vertical as a Vice President and Director. Prior to rejoining
Capstone, David served as a Principal at Bowen Advisors, an M&A and strategic advisory
firm focused on technology companies including communications and healthcare IT.
David has also worked as a Vice President at Boenning & Scattergood, a Philadelphia-
based middle market investment bank, where he worked with clients across a variety of
industries and developed the firm’s technology practice. He spent his early career
working at Needham & Company, RobertsonStephens and J.P. Morgan.
David Michaels
Managing Director, Head of Technology, Media, & Telecom Practice
dmichaels@capstonepartners.com | 858-926-5950
David is a Managing Director of Capstone where he is responsible for managing the
firm’s Technology, Media & Telecom Group. David founded SagePoint Advisors in 2008,
a boutique investment banking firm focused on providing M&A advisory services to
technology and telecom companies. Prior to founding SagePoint, David was a Co-
Founder, Partner and Managing Director at Montgomery & Co., a leading investment
bank focused on serving emerging-growth technology companies. David co-founded
Montgomery’s investment banking business in 1996 and played an instrumental role in
building the business to over $50 million in revenues and 80 employees. He also ran the
firm’s Communications and Digital Media Technology practice areas prior to his
departure.
David has intimate knowledge of the strategic landscape, market dynamics and
technology underpinnings of several high technology market segments including Mobile
Software & Services, Consumer Internet, E-Commerce, Enterprise SaaS, Cloud &
Infrastructure Software and Consumer, IT & Telecom Hardware. Prior to joining
Montgomery in 1994, David worked as an investment banker at Bankers Trust and prior
to that, as a structural engineer at General Dynamics.
Max Morrissey
Research Associate
mmorrissey@capstonepartners.com | 617-619-3336
Max is a Research Associate at Capstone Partners with a primary focus on the
Technology, Media, & Telecom, Business Services, and Education & Training industries.
Before joining the corporate Research Team at Capstone Partners, Max was an analyst at
Lab42 Research, a Chicago-based market research firm. At Lab42 Research he
specialized in the development and analysis of propriety research projects with a focus
in quantitative methodology. Max has a BS in Economics and a BS in Marketing from
DePaul University.
15Healthcare IT | May 2021
FIRM TRACK RECORD
CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL
CORPORATE SALE CORPORATE SALE CORPORATE SALE
(IN MARKET) (IN MARKET) (IN MARKET)
ARTIFICIAL
ARTIFICIAL SENSOR
INTELLIGENCE &
INTELLIGENCE & EHR TECHNOLOGY
MACHINE LEARNING
SERVICES GROUP
HAS RECEIVED DEBT HAS BEEN
HAS BEEN ACQUIRED BY HAS BEEN ACQUIRED BY
FINANCING FROM RECAPITALIZED BY
HAS BEEN ACQUIRED BY HAS BEEN ACQUIRED BY HAS PARTNERED WITH HAS BEEN ACQUIRED BY
HAS RAISED $30 MILLION
HAS BEEN ACQUIRED BY HAS BEEN ACQUIRED BY HAS BEEN ACQUIRED BY
OF EQUITY CAPITAL FROM
a portfolio company of
AUDAX GROUP, INC.
HAS BEEN ACQUIRED BY HAS BEEN ACQUIRED BY HAS BEEN ACQUIRED BY HAS BEEN ACQUIRED BY
16Healthcare IT | May 2021
ENDNOTES
1. McKinsey & Company, “Five Stages for Healthcare Institutions in Battle Against COVID-19,”
https://www.mckinsey.com/industries/healthcare-systems-and-services/our-insights/from-wartime-to-peacetime-five-stages-
for-healthcare-institutions-in-the-battle-against-covid-19, accessed March 24, 2021.
2. Accenture, “How Can Leaders Make Recent Digital Health Gains Last,” https://www.accenture.com/us-en/insights/health/leaders-
make-recent-digital-health-gains-last, accessed March 24, 2021.
3. Teledoc Health, “Teledoc Health Reports Fourth-Quarter and Full-Year 2020 Results,”
https://s21.q4cdn.com/672268105/files/doc_financials/2020/q4/TDOC-EPR-4Q20.pdf, accessed March 24, 2021.
4. Markets and Markets, “Healthcare Cloud Computing Market Global Forecasts to 2025,”
https://www.marketsandmarkets.com/Market-Reports/cloud-computing-healthcare-market-347.html, accessed March 23, 2021.
5. L&T Technology Services, “Digital Front Door Survey Whitepaper,” https://bizclik-cms-prod.s3.eu-west-
2.amazonaws.com/mailchimp/downloads/DFD+WhitepaperV9_compressed.pdf, accessed March 23, 2021.
6. Center for Connected Medicine, “Research Report: COVID-19 Pandemic Shifts Innovation Priorities at Health Systems,”
https://connectedmed.com/resources/research-report-covid-19-pandemic-shifts-innovation-priorities-at-health-systems/,
accessed March 23, 2021.
7. HIT Infrastructure, “Microsoft Azure Forms Collaboration to Enhance AI in Healthcare,”
https://hitinfrastructure.com/news/microsoft-azure-forms-collaboration-to-enhance-ai-in-healthcare, accessed March 22, 2021.
8. Amazon, “Amazon Care to Launch across U.S. this Summer,” https://www.aboutamazon.com/news/workplace/amazon-care-to-
launch-across-u-s-this-summer-offering-millions-of-individuals-and-families-immediate-access-to-high-quality-medical-
care-and-advice-24-hours-a-day-365-days-a-year, accessed March 22, 2021.
9. MedCityNews, “CVS Caremark Adds Five Companies to Digital Health Platform,” https://medcitynews.com/2020/03/caremark-
adds-five-companies-to-digital-health-platform/?rf=1, accessed March 22, 2021.
10. Walmart, “Walmart Empowering Individuals with Access to Digital Health Records,”
https://corporate.walmart.com/newsroom/2021/03/17/walmart-empowering-individuals-with-access-to-digital-health-records-
in-partnership-with-the-commons-project-foundation-and-clear, accessed March 22, 2021.
11. Healthcare IT News, “Optum to Acquire Change Healthcare in $13B Deal,” https://www.healthcareitnews.com/news/optum-
acquire-change-healthcare-13b-deal, accessed March 21, 2021.
12. WELL Health, “WELL Health Achieves Record Revenue and Positive Adjusted EBITDA in Q4-2020,”
https://www.well.company/_resources/News/nr_20210318.pdf, accessed March 21, 2021.
13. Tech Crunch, “Hinge Health has Raised $300M Series D at a $3B Valuation,” https://techcrunch.com/2021/01/05/hinge-healthy-
d/, accessed March 21, 2021.
14. Tech Crunch, “Tencent Backs Chinese Healthcare Portal DXY in $500M Round,” https://techcrunch.com/2020/12/28/china-dxy-
500-million-funding-tencent/, accessed March 21, 2021.
15. Crunchbase, “ScriptDrop Raises $15M Series A For Pharmacy Delivery Platform,” https://news.crunchbase.com/news/scriptdrop-
raises-15m-series-a-for-pharmacy-delivery-platform/, accessed March 21, 2021.
Common Goals. Uncommon Results.
Disclosure
This report is a periodic compilation of certain economic and corporate information, as well as completed and announced merger and
acquisition activity. Information contained in this report should not be construed as a recommendation to sell or buy any security. Any
reference to or omission of any reference to any company in this report should not be construed as a recommendation to buy, sell or
take any other action with respect to any security of any such company. We are not soliciting any action with respect to any security
or company based on this report. The report is published solely for the general information of clients and friends of Capstone
Partners. It does not take into account the particular investment objectives, financial situation or needs of individual recipients.
Certain transactions, including those involving early-stage companies, give rise to substantial risk and are not suitable for all investors.
This report is based upon information that we consider reliable, but we do not represent that it is accurate or complete, and it should not
be relied upon as such. Prediction of future events is inherently subject to both known and unknown risks and other factors that may
cause actual results to vary materially. We are under no obligation to update the information contained in this report. Opinions
expressed are our present opinions only and are subject to change without notice. Additional information is available upon request.
The companies mentioned in this report may be clients of Capstone Partners. The decisions to include any company in this report is
unrelated in all respects to any service that Capstone Partners may provide to such company. This report may not be copied or
reproduced in any form or redistributed without the prior written consent of Capstone Partners. The information contained herein should
not be construed as legal advice.
17Market Presence
With a long-established U.S. footprint, together with an international partner
platform, we provide clients with broad expertise and access to key market
relationships on a global basis. Our presence is backed by ~200 professionals in the
U.S. with 450+ professionals across 43 countries.
218 $12.5B 30% 6th
M&A transactions aggregate of our deals globally ranked for
completed in 2020 transaction value are cross- deals under $500m
border
$65.1M 51 65%
average deals involving foreign completed with a
transaction private equity firms European partner
value
United States International
170+ professionals 450+ professionals
12 offices 60+ offices in 43 countries
Boston · Chicago · Dallas · Asia: China · India · Japan · Thailand
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United Kingdom
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