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SV Health Investors Growth Equity:
Year in Review
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2020 Reflections: Turning the Page from Adversity to Opportunity
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Welcome to the inaugural newsletter for SV Health Investors Growth Equity. In no uncertain terms, 2020 was a year defined by challenge. Our nation faced adversity as the pandemic illuminated the dire need to create a more equitable, accessible, and affordable health care
system. As individuals, each of us was asked to shoulder hardships, make sacrifices, and confront fears.
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SV Health Investors and our portfolio executives summoned core values of courage, collaboration, creativity and conviction to inspire innovation in the face of uncertainty. Over the past year, SV's Growth Equity Team:
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- Deployed two new platform investments to complete the SV Fund 6 portfolio.
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- Funded acquisitions to augment our existing portfolio’s organic growth.
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- Closed the first investment out of the SV7 Growth Fund – our firm’s new dedicated growth equity fund.
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Our Growth portfolio companies span technology-enabled healthcare services, digital health and medical products. We are proud to be a force for positive change across the US Healthcare ecosystem.
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2020 was one of the best years for M&A activity on record for the SV Growth Team. The Growth portfolio achieved multiple exits through M&A and IPO:
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- AdaptHealth acquired SV portfolio company Aerocare.
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- Telemedicine portfolio company AmWell completed an IPO and a secondary offering.
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- Hillrom announced the acquisition of SV portfolio company BardyDx.
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Over the course of the year, SV’s Growth portfolio companies rose to the challenges imposed by COVID-19, creating opportunity from adversity while aiding patients and saving lives:
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- Healthify leveraged technology to create scalable networks that address the social determinants of health for at-risk populations hit hardest by COVID.
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- Clinic-based portfolio companies, such as Schweiger Dermatology, re-envisioned the patient experience in a post-COVID world with new protocols around patient care and PPE.
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- Companies like Centauri, myOrthos, and Doctors of Physical Therapy all capitalized on the opportunity to augment organic growth with accretive tuck-in acquisitions.
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- AmWell, BardyDx and Evidation Health each played an active role in battling COVID by working directly with patients, as highlighted in the section below.
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Reflecting on 2020, we are inspired by the leaders and change makers within the SV portfolio family who answered the call to action by seeing possibility in the face of adversity. Through them, we are emboldened with a sense of renewed optimism for innovation and progress towards a more affordable, accessible, and higher-quality healthcare system.
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AeroCare acquired by AdaptHealth Corp. for >$2.0 billion.
AeroCare is a durable medical equipment (DME) company for respiratory and sleep therapy. The transaction was comprised of $1.1 billion in cash and 31 million shares of AdaptHealth (NASDAQ: AHCO). This merger is a testament to the
skillful execution by Steve Griggs, AeroCare Founder & CEO, and his stellar management team. SV’s investment thesis in 2016 was grounded in our nuanced understanding of healthcare sub-sectors and a strategy of technology enablement that transformed company operations.
Read the full article that discusses this transaction.
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AmWell (NYSE: AMWL) completed a $922 million IPO, including $100 million investment from Google.
SV became a shareholder in AmWell through the acquisition for cash and stock of our telepsychiatry portfolio company Aligned Telehealth, founded by Dr. Nitin Nanda. SV’s 2016 investment in Aligned resulted from a firmwide thematic thesis development exercise evaluating the growing waves of both telemedicine and behavioral health, the convergence of which attracted AmWell as an acquirer. The COVID-19 pandemic has driven high demand for behavioral health consultations and accelerated adoption of telehealth for convenient, safe and efficient care delivery. As of January 29, 2021, AmWell’s public market capitalization was greater than $8 billion.
Read the full article that discusses AmWell’s upsized IPO.
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Hillrom (NYSE: HRC) announced that it will acquire Bardy Diagnostics (“BDx”) for $375 million plus future potential payments based on the achievement of certain commercial milestones.
SV partnered with Dr. Bardy in 2016 to grow his breakthrough FDA-approved device into a leading provider of comprehensive ambulatory cardiac monitoring technology and services. BDx’s growth has been enabled by a revolutionary wearable to capture continuous ECG, plus an AI-powered back-end reading capability delivering unparalleled diagnostic capability and convenience for Cardiologists and their patients.
Read the full article that highlights Bardy’s technology contribution to digital health offerings.
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Centauri Health Solutions welcomes a new investor and completes multiple acquisitions.
Centauri provides services to payors and providers across all healthcare programs, including Medicare, Medicaid, Commercial and Exchange. SV invested in Centauri in 2017 based on the strength of the management team and an investment thesis centered on value-based care initiatives. Centauri rapidly grew revenue and EBITDA organically and through acquisitions, attracting a PE-led recapitalization three years after our investment. Founder & CEO Adam Miller and his team continue to do a stellar job of managing growth and integrating strategic acquisitions.
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An innovator in the healthcare payment space. HPS’ single-statement billing and patient financing services help families combat confusing and unaffordable medical bills, while its guaranteed payment model eliminates providers’ collection costs and risk. SV’s investment in HPS follows an independent research exercise conducted in the patient payments subsector. Tom Policelli, SV Executive in Residence, introduced SV to the Company and joined the HPS leadership team as CEO.
Read the HPS announcement here.
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A next generation orthodontist platform and the only orthodontia dental service organization in the Northeast. SV partnered with MyOrthos’ Founder & CEO Elizabeth Campbell, a former SV investment professional, following her development of an investment thesis, acquisition strategy and operating plan while serving as an SV Executive in Residence.
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Provider of physical therapy services in the Midwest. SV teamed up with Founder & CEO Aaron Kraai to support regional expansion through acquisitions and new clinic openings. SV leveraged prior investment experience in clinic-based models and outsourced healthcare services. SV's Operating Partner,
Bruce Cerullo, joined the Board of Directors to draw on his operating experience in advising DPT's founder.
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AmWell is a leading telehealth platform connecting and enabling providers, insurers and patients. The COVID-19 pandemic stimulated telehealth adoption and AmWell experienced nearly 500% tele-visit growth and 1000% provider growth (Q3 2020 over Q3 2019).
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Bardy Diagnostics offers a patch for detection and remote monitoring of cardiac arrythmia. A recent study found 16.7% of hospitalized COVID-19 patients suffered from arrythmia. Bardy’s remote diagnostic is another tool for home-based care to preserve ICU capacity.
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Evidation measures health in everyday life and enables anyone to participate in ground-breaking research and health programs. Evidation monitors a connected population of millions of Americans via wearables and wireless medical devices. Throughout 2020, Evidation conducted longitudinal surveys analyzing attitudes and actions to cope with COVID-19, with participation from all 50 states and 89% of U.S. counties.
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We are proud to partner with experienced entrepreneurs and leaders who are improving healthcare through innovative care delivery models, next-generation digital health technologies and groundbreaking medical products.
Please visit our website to learn more about our growth portfolio.
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In 2020 we expanded the SV Growth Team, welcomed new members and celebrated promotions. We also attracted new executives-in-residence to work with us on thesis development, target selection and investment value creation by serving in management, board and advisory roles for SV's portfolio companies.
Visit our people page to learn more about our diverse skill sets.
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- Rose Gaudreau promoted to Sr. EA & Marketing Coordinator
- Emmie Gerling promoted to Operations Coordinator
- Greg Madden promoted to Managing Partner
- Elizabeth Schwert promoted to Vice President
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- Bill Gerard joins SV Growth team as Analyst
- Sam Osman joins SV as Executive in Residence (pharma technology)
- Tom Policelli joins SV as Executive in Residence (payer technology)
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About SV Health
SV has decades of experience investing in companies that improve
healthcare through innovative care delivery models, next-generation digital health technologies and groundbreaking medical products. The SV Growth Fund is sector-focused and thesis-driven to seize opportunities and solve the most pressing industry challenges by providing growth capital and liquidity for industry leaders transforming healthcare.
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