EMS Technology Companies Are Showing Promise and Grabbing Investors’ Attention

In recent months, companies providing technology solutions for ambulance and emergency medical services (“EMS”) agencies have gained steam. Accelerated by the impact of COVID-19, stress on existing healthcare services’ infrastructure has forced change. Regulatory barriers to innovation are being demolished. As a result, a number of high-profile EMS technology (“tech”) companies have successfully raised capital from investors in recent months, and promising new technologies are poised to continue to attract investor attention.

The funding boom for EMS tech companies stems from a few dynamics at play within the industry.

  • Until recently there was little in the way of disruptive innovation in EMS. This persistent lack of innovation and entrepreneurship in EMS has created a significant tech debt among operators, resulting in embedded inefficiencies. Opportunities for technologists to create new solutions abound, leading to real cost savings and improved patient outcomes.
  • Complementary technologies in areas such as communications and geolocation have created new opportunities for innovation. Steps forward in adjacent industries have not trickled down quickly to EMS-specific applications. Technology has been stubbornly difficult to deploy in EMS, despite the significant outcomes-related benefits of doing so. More recently, however, the industry has been nudged in the right direction. Congress’ authorization of the First Responder Network Authority (“FirstNet”) represents a substantial step forward, leading to the expansion of high-quality broadband dedicated to first responders. Similarly, the Centers for Medicare and Medicaid Services’ Emergency Triage, Treat, and Transport (“ET3”) model leverages telehealth to enable treatment at the point of care, and companies like Allerio (allerio.com) are developing innovative products and solutions for first responders to fully realize the benefits of emerging technology. Going forward, industry-wide infrastructure investments will enable entrepreneurs to create more custom solutions for first responders.
  • The market for remote medical care is large, growing, and has never been stronger. The traditional EMS market is huge, with municipal agencies and private ambulance companies operating in tens of thousands of cities and towns nationwide. The traditional market is expanding as prehospital medicine becomes an ever more important stage in the continuum of care. Spurred on by telehealth and the ubiquity of urgent care, more healthcare is being delivered in the field. Companies such as Ready Responders, which leverages field medics to facilitate in-home telehealth, exemplify the trend. Most recently, contact tracing in the field has been a key initiative in the national response to COVID-19.

Recent investments in EMS tech companies include the $21 million raised by RapidSOS in June of this year, bringing its total funding to $107 million, and the more than $11 million raised by Pulsara, bringing its total funding to almost $30 million. Other emerging companies are sure to attract the attention of investors seeking to profit from growth in the space.

MHT Partners, a leading healthcare services investment bank, is an active advisor in the healthcare, technology, and medical transportation industries. If you would like to learn more about MHT’s practice, please e-mail Alex Sauter (asauter@mhtpartners.com) or Taylor Curtis (tcurtis@mhtpartners.com).

Venture Capital Investment in Education Technology

Global investment in education technology has grown rapidly over the past decade, benefitting from over $32 billion in venture capital funding. Education companies offering innovative digital content and services have proven to be attractive assets garnering ongoing competition by investors. In the last decade, these businesses traded on the promise that the traditional methods of learning would be at most, upended by new technologies, and at least, heavily complemented by them.

According to a report by Holon IQ, venture capital investments in education technology (“edtech”) totaled approximately $500 million in 2010. A decade later, edtech venture capital attracted nearly $4.6 billion in the first half of 2020, positioning the sector for a record-breaking investment year. No doubt, technology is accelerating across every industry, but especially in education as schools, colleges, students and families attempt to engage and maintain learning continuity in an isolating COVID-19 environment. Looking forward, Holon IQ projects the cumulative investment in the edtech sector to nearly triple to $87 billion by 2030.

Venture capital investment in the pre-K-12 to adult workforce education sector hit a peak in 2018, followed by over $7 billion in venture capital funding in 2019. China remains the top recipient of funding, with U.S.-headquartered companies attracting the majority of remaining capital.

Global spending in education is driven by a couple of factors:

  • Emerging markets such as Latin America, Southeast Asia and Africa are rapidly growing and looking to improve educational outcomes for large, underserved populations. By 2025, the primary-, secondary- and university-level student base is expected to grow by half a billion, driven primarily by population growth in developing countries. The scale, quality and speed required to deliver this instruction will undoubtedly involve technology.
  • In developed economies, technology is already used to support learners, teachers and school decision makers. Education technology has become especially important in the COVID-19 environment as schools implement newer asynchronous, remote and hybrid learning models.

The overwhelming demand for better communication tools and learning products should sustain a continued increase in investment over the back half of 2020. Beyond that, more advanced technology learning applications are expected to hit their strides by 2025 with augmented and virtual reality and artificial intelligence becoming more integrated into core education delivery and learning processes.

MHT Partners, a leading education investment bank welcomes further discussion: Rebecca Bell (rbell@mhtpartners.com), Shawn D. Terry (sterry@mhtpartners.com) or Alex Hicks (ahicks@mhtpartners.com).

Source: HolonIQ

Private Equity’s Emerging Interest in Psychology & Psychiatry Practices

Private equity investment in psychology and psychiatry practices has accelerated in recent years. Investors with a track record for partnering with behavioral healthcare companies, as well as generalist funds, have ramped interest up quickly in psych specialties. Numerous attributes of psychology and psychiatry practices align with private equity’s interests and experience, and recent M&A in the space suggests that market opportunities exist for the first-movers who can build large platforms for providing care nationwide. Furthermore, the ability to deliver care via telemedicine (telepsych) means psychology and psychiatry practices have been impacted far less than most specialties, and by some measures have even improved, during the COVID-19 pandemic.

Investors have long been active acquirers of behavioral health companies and service providers, but financial sponsors have accelerated the pace of investment in psychology and psychiatry due to a number of converging factors:

  1. Private equity’s access to financial capital enables consolidation of the fragmented industry as it exists today. Many independent psychology and psychiatry companies are small, composed of fewer than a dozen professionals. Investors looking to acquire or “roll up” a number of small practices stand to benefit from significant increases in efficiencies that accompany greater scale, as well as lower costs. For providers, that often means more time focused on patient care and less time addressing the administrative minutiae of running an independent practice.
  2. There is an enormous market, as well as an unmet need, for mental health treatment in the U.S. Nearly every adult stands to benefit from some form of psychology or psychiatry treatment at some point in his/her life, and the industry has grown at a rate of more than 5% annually in recent years to over $18.9 billion in 2019. Significant growth in demand for services has outstripped supply, and in 2019 there was approximately only one licensed psychologist or board-certified psychiatrist for every 3,300 people in the U.S. Many psych professionals expect the COVID-19 pandemic to exacerbate this trend, as adverse effects on individuals’ social, economic, and physical wellbeing portend additional mental health diagnoses. (American Psychiatric Association, WHO.)
  3. Technological and regulatory improvements are rapidly expanding access to care. The ability to deliver care via telemedicine and fewer regulatory hurdles imposed by CMS and private insurers means that psychology and psychiatry services are available like never before to individuals that cannot travel to a provider’s office for medical or logistical reasons.

TPG Capital’s acquisition of LifeStance Health (joining existing investors’ Summit Partners and Silversmith Capital Partners) is illustrative of recent transaction activity in the sector, and Refresh Mental Health, backed by Lindsay Goldberg, has announced that it will be exploring transaction options as well. In the vast middle market, platforms such as New Harbor Capital’s Community Psychiatry Management represent regional platforms with significant opportunities for growth.

MHT Partners’ healthcare investment banking services represent founders, owners, and entrepreneurs undergoing M&A transactions. If you would like to learn more about MHT’s experience, please e-mail Taylor Curtis (tcurtis@mhtpartners.com) or Alex Sauter (asauter@mhtpartners.com).