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Rock Weekly: Should the brain be treated as a medical device?

| May 26, 2015|Tags:

Rock Weekly

May 26, 2015

Let’s talk about robots. They’re hyper-accurate, cost-saving, depression-diagnosing—even cute. Regardless of the debate about robots vs. humans, one open question in healthcare remains: if algorithms and robots are more accurate than a human doctor, should the human brain be regulated as a medical device? Either way, we’re jazzed this man is getting his limbs back after four decades thanks to bionics.

We’re also jazzed that portfolio company Stride Health just raised $13M to be the go-to health insurance and HR platform for an entire one-third of the workforce: freelancers. Congrats, team!

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Insights from digital health’s most active investors

| May 21, 2015|Tags:

Last Friday we co-hosted the third annual Digital Health Investor Summit with Fenwick and West to a packed audience of investors specifically interested in the digital health space. Here are some of the day’s memorable moments:

  1. “Data is like air—it’s necessary, but you can’t sell anyone two ounces of it.” -David Brailer of Health Evolution Partners on collecting more and more data points, without creating value
  2. “It finally doesn’t suck. Technology can do video much better, waiting time is almost instantaneous, you can close the loop by connecting to pharmacy, and the market has really expanded with everyone having smartphones.” -Bob Kocher, Venrock on why telemedicine is so hot right now
  3. “The 5 Customer Journeys that matter: browse and shop, evolve with my needs, help me help myself, take control of my health, and help me in my time of need.” -Janet Widmann, Executive VP of Markets for Blue Shield of CA on the kinds of technologies payers are interested in investing in
  4. “Differentiated tech models are more important than ever” -Navtej Bhullar, Goldman Sachs on key investor perspectives from recent IPOs
  5. “Investors should focus on optimizing all the 4 P’s (patient, physician, provider & payer)” -Casper de Clercq, Norwest Venture Partners on whether high valuations will hold
  6. “It’s not about disruption, it’s about implementation.” -Jack Young, dRx Capital on how digital health companies are performing compared to other portfolio companies

Rock Health’s Malay Gandhi ran an interactive session regarding The State of Digital Health Funding (you can check out a breakdown here). The audience was live-polled on their feelings about the digital health investment landscape. Here are some results:

Sales cycles are the biggest concerns for digital health investors

digiital health challenges 2 rock health

 

Digital health investors believe companies are currently overvalued

rock health are companies overvalued?

 

And finally—on the bullishness of digital health investors:

digital health investing sentiment rock health

 

 

Rock Weekly: Which digital health companies will IPO in 2015?

| May 18, 2015|Tags:

Rock Weekly

May 18, 2015

Another week, another $100M digital health IPO filing—this time, Mindbody. On that topic, we polled forty-three investors on which companies they think will IPO in 2015 and this is what they said. Cast your own vote here.

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Non-healthcare acquirers heating up digital health M&A activity

| May 14, 2015|Tags:

Tunnel

Stephanie Liu, Strategy Fellow, Rock Health

What does it mean for companies looking to get acquired?
With M&A heating up in the digital health space, it’s no wonder non-healthcare companies also want to get a piece of the action. In Q1 2015, we saw consumer athletic wear company Under Armour make a $475M acquisition of MyFitnessPal and $85M acquisition of Endomondo. Last year we also saw the largest disclosed acquisition by a non-healthcare acquirer: Outsourcing services company Cognizant bought payer administration company TriZetto for $2.7B.  Several non-healthcare companies have gone on to acquire a number of Rock Health portfolio companies—MyFitnessPal acquired Sessions, Weight Watchers bought Wello, and Google purchased Lift Labs—just to name a few.

Why so much activity from non-traditional players?
The trend of non-traditional players investing in digital health indicates that healthcare is no longer a silo as these players identify value of incorporating healthcare into their business model. The growth of consumers willing to pay out of pocket for healthcare-related expenses, whether that’s medical or wellness-oriented, is creating an attractive market for B2C models. Since Rock Health began tracking M&A deals in digital health in 2013, non-healthcare company acquisitions in digital health account for close to 20% of all M&A deals (compared to 23% by traditional healthcare companies) with a total of 33 deals and $5.2B in disclosed digital health acquisitions. Non-traditional players also invested more heavily in the consumer health space such as personal health tools and tracking.

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Deconstructing the Fitbit S-1

| May 11, 2015|Tags: , , ,

Fitbit is the latest iconic digital health company planning to IPO, with a drastically different operating history than another iconic company from last year’s group. Quote from Health Innovation Summit (2013).

Beginning early last year, whispers of Fitbit’s revenues started to circulate. Testing the numbers with investors, responses were mixed—some thought the figures were outlandish, and others confirmed them as absolutely true or undersold. This is the story of wearables, a polarizing category that has been misunderstood, underestimated, and perhaps wrongly maligned. And this narrative will shadow Fitbit’s public offering—with one journalist already calling it a “sucker IPO” and another praising the company’s “surprising profits.” Fitbit’s S-1 provides answers to questions many of us have debated for years, and leaves a number of others completely unanswered.

Objectively, Fitbit represents a tremendous growth story. In less than six years from the launch of its first device—and on the back of less than $70M in venture financing—the company has built a billion dollar plus revenue (run rate) business (at 50% gross margin), legitimately pioneering the category of “connected health and fitness” trackers. Regardless of any S-1 analysis, IPO price, or post-IPO price change, what James Park and his team have done at Fitbit should not be shortchanged. It is an incredible startup tale from a determined, visionary founder—a founder that no one wanted to fund. And yet here they are, on the cusp of an IPO.
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Rock Weekly: Deconstructing the Fitbit IPO

| May 11, 2015|Tags:

Rock Weekly

May 11, 2015

Digital health IPOs are finally heating up. Off the heels of another filing last week, both Fitbit and Evolent Health sent off S-1s to the SEC—each for $100M. No time to read all 130K+ words? Enjoy the tl;dr version of Fitbit’s filing we wrote just for you.

What’s next for these soon-to-be-public companies? The activity tracking pioneer will be defending against the Apple Watch, while, perhaps, population health management company Evolent can stem the rising tide of ER visits the ACA has not prevented.

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Meet the founder who is redefining chronic care management

| May 07, 2015|Tags: , ,

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Treating patients who suffer from a chronic disease costs the U.S. 86% of its healthcare dollars, and Chase Hensel is out to change that. As the co-founder of Welkin Health, Chase and his team are creating effective tools for case managers to maintain relationships with patients with chronic disease—ultimately, bettering the care continuum and decreasing the need for costly visits and services. We caught up with Chase to find out what inspired him to become an entrepreneur in digital health, and lessons he’s learned along the way.
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Rock Weekly: What do IBM, Apple, and UHC have in common?

| May 04, 2015|Tags:

Rock Weekly

May 4, 2015

What do IBM, Apple, and UnitedHealthcare have in common? They’re all avid fans of the shifting center of healthcare—helping seniors better access healthcare technology and announcing coverage of telemedicine visits. Good thing consumers are a-ok with taking control of their own health.

Speaking of patient empowerment in the digital age, we have free copies of Eric Topol’s The Patient Will See You Now for five lucky readers who respond here. Happy reading!
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Taking over the boys’ club: learnings from the XX Retreat

| April 29, 2015|Tags: ,

XX Retreat Rock Health

Last month Rock Health hosted its sixth annual XX in Health Retreat bringing together over 200 women leaders in the healthcare field. The stellar list of speakers touched on a number of topics, ranging from deeply personal stories to broader lessons about how one can overcome gender bias and make your mark as a woman leader. Here are some learnings from the day:

“Women need to be bold enough for the responsibility of success AND failure.” -Mecca Santana, VP of Cultural Affairs and Diversity for Westchester Medical Center

Mecca Santana had a number of great quips during her panel session, but this quote struck close to home. Being able to talk candidly about failure inspired many to confront fears of hearing ‘no’ and risk-taking in general. One young woman at my lunch table spoke about her failed grassroots campaign to engage co-workers in addressing their company’s woman retention problem. The older women at the table contributed their thoughts regarding similar battles they’ve fought, and how in the long run they were able to come out on top. Though the approaches were varied, one woman spoke about “how keeping her head down and constantly producing good work” served her well, while others debated about when it’s time to give up the good fight and join a more positive work culture. The conversation ended with one of the table’s entrepreneurs extending a job offer to the frustrated young woman.

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Rock Weekly: Announcing our newest investments

| April 27, 2015|Tags:

Rock Weekly

April 27, 2015

Speaking on the state of digital health last week, some called the gap between technology and life sciences “pitiful“, while patients and providers alike are hungry for innovation in the space. Meanwhile, others continue placing huge bets to support its growth (including us).

We’re proud to announce three new investments on the East Coast (and new digs in NYC). Meet 1DocWay, which is bringing telemedicine to underserved populations;Arsenal Health, maker of predictive technology that helps providers optimize bookings; and Caeden, a design-driven company developing truly wearable technology.
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