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Investors weigh in on the digital health IPO market


However, there are plenty of opportunities to get acquired.

“M&A is the new IPO,” said Bill Evans, Rock Health’s managing director, who closely tracks the industry.

But who will be the buyers of digital health companies in 2018?

Some investors are betting on big pharma. Companies like Merck and Johnson & Johnson are increasingly talking up machine learning and artificial intelligence. Digital health companies, particularly those focused on clinical trial matching or that track how patients are responding to treatments, could be prime targets.

Other venture capitalists, like Bessemer Venture Partners’ Steve Kraus and Norwest Venture Partners’ Robert Mittendorff, said that tech giants Alphabet, IBM, Apple and Microsoft will start to acquire digital health start-ups. UnitedHealth’s Optum business, which describes itself as technology-enabled services, is also expected to make some strategic bets in the digital health sector.

These acquisitions could result in a more active IPO pipeline for next year.

“If they (tech companies) make a real big splash with some kind of acquisition, this could crack open the IPO markets and public market investor interest in the space sooner than maybe any of us think,” suggested Kraus.



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