Rock Weekly – NEW

There’s been a lot of exit talk over the past year with the emergence of the SPAC as a popular vehicle.

Fresh off the Fourth of July holiday weekend, we’re still seeing fireworks. Our H1 2021 report is out and the verdict is in: digital health funding is popping off, to the tune of $14.7B in H1—already surpassing 2020’s record-breaking total funding. The half closed with 372 deals and an average deal size of $39.6M, spearheaded by 48 mega deals which accounted for 59% of total funding. Public exit activity also ballooned with 11 closed IPOs and SPACs (+1 on Friday), with another 10 SPACs expected to close in 2021. It’s been a wild ride watching digital health blast off from niche sector to mainstream market, and it isn’t showing signs of slowing down: we just had another $1B+ week in funding. Read our H1 analysis here.

Did you know that more LGBTQ+ adults delayed or avoided medical care (53%) during the pandemic compared to non-LGBTQ+-identifying adults (41%)? While digital health alone can’t solve this care gap, it can help support more inclusive healthcare experiences. We’re excited to see the LGBTQ+ digital health market emerge—2020 saw the first venture funding ($9.6M) invested in startups specializing in LGBTQ+ health, and H1 2021 has followed with $39M. As we close out Pride Month, check out our latest piece to learn more about the approaches digital health companies are employing to develop products and services for LGBTQ+ individuals, and what market opportunities we’d like to see up-and-comers tackle.

Who else went into last week fantasizing about the next cool digital health infrastructure play? At Rock Health, we are nerds through and through—so it was thrilling to announce our investment in Zus Health. Co-founder Jonathan Bush refers to the industry’s first development platform backed by shared data records as a “LEGO kit for healthcare.” We’re convinced it’s about to get a lot more interesting for builders and developers—making this an even more exciting moment to be a part of digital health.

The explosion in digital behavioral and mental health funding over the last year is nothing new to Rock Weekly readers. As this market continues to gain momentum, it’s incumbent on mental health startups to go beyond simply digitizing the existing care experience. That includes aligning adjacent therapies and specialty offerings in accessible ways. Platforms like Transcarent, which raised a $58M Series B on a $500M valuation last week, offer the potential to bring together various apps focused on the spectrum of mental health needs—from mindfulness all the way to serious mental illness care—enabling people to make choices about their care.

Last week, Thirty Madison announced a $140M Series C that propelled the D2C company to unicorn status, clip-clopping apace with the rest of the D2C herd. More interesting to us is their subsequent plan to expand beyond their existing D2C model to target health plans and employers. 

Among myriad recent platform consolidation moves, Ro announced last week that it will acquire Modern Fertility. The deal represents the opportunity created when segment-specific services for a given population or need—in this case fertility—combine with wide-population focused virtual care platforms. Despite women’s health companies securing only $58M of the $6.7B raised by digital health companies in Q1 2021, the Ro acquisition signals a belief—one that we share at Rock Health—that segment-specific verticals represent a large and growing market opportunity, and a chance to vastly improve the care experience for discrete (and oft-overlooked) populations and needs. Read more of our thoughts here. 

Who hasn’t been frustrated by medical billing, long hospital stays, or impersonal care models? The paradox consumers face is that healthcare companies don’t compete on experience—but we need the care they supply.

The scoop came last week that Amazon Care has its first enterprise contract with Precor, a Washington state subsidiary of Peloton. Amazon Care will provide Precor employees virtual primary and urgent care access, plus home visits down the line. Not to be outdone, Walmart shared its intent to move further into the D2C digital health market via acquisition of telehealth provider MeMD. Seems we cannot go a week without a significant flare up in the platform wars, this time pitting the US’ two largest companies against an already crowded field. We’re excited to see if either—or both—of these Big Retail giants can flip the normal script in healthcare by showing that bigger can be better for consumers as patients.

If you, like some of us at Rock Health, are amongst the #languishing class, let’s consider ourselves lucky. According to recent data from the CDC, 30% of U.S. adults are experiencing symptoms of anxiety or depression. So it's not surprising that last week saw big news for digital mental health. Cigna announced plans to provide Ginger as an in-network benefit for its 14 million covered lives, which came on the heels of NOCD's partnership with Tridiuum, a mental health provider platform, to make specialty treatment more accessible.