Outcome’s $500M Round Is Biggest VC Healthcare Deal Of The Year

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Outcome Health is raising at least $500 million in new equity funding at a pre-money valuation of $5 billion. Backers include Pritzker Group Venture Capital, Goldman Sachs Investment Partners and Capital G, an investment arm of Google. It’s the first institutional investment for 11-year-old Outcome, which uses digital technology such as touchscreen tablets to streamline communication between doctors and patients.

The largest health-related VC-backed deals of 2017

The financing is also notable for a few other reasons: It makes Outcome one of the most highly valued private healthcare companies in the world, and it’s the biggest VC-backed healthcare deal of the year, per the PitchBook Platform.

Here’s a closer look at the biggest healthcare-related VC deals of the year:

The most valuable Chicago startup since Groupon

A $500 million round is massive by any measure, but particularly for a private company based in Chicago. It’s the largest funding for a startup headquartered in the Windy City since Groupon closed a $950 million round at a valuation of $4.7 billion in early 2011. Avant, an online lending platform, pulled in $325 million at a $2 billion valuation last year, and the only other Chicago-based startup to raise more than $100 million in recent history is SMS Assist, a software management provider that secured a $1 billion value with a $150 million Series D last June.

The funding also makes Outcome, with its $5 billion valuation, the most valuable startup in Chicago since Groupon completed its IPO at an estimated valuation of $12.7 billion. But it bears attention that the Outcome transaction, according to Axios, is structured in such a way that investors will receive a guaranteed return if the company goes public. That means Outcome’s worth isn’t directly comparable with other more straightforward valuation calculations.

For much more on the city’s VC landscape, check out PitchBook’s Venture Ecosystem FactBook: Chicago.

Another potential healthcare IPO

It’s possible that with the significant financing, Outcome is inching toward an IPO. According to the Chicago Tribune, the company is considering a public offering within the next few years.

Several other health-related startups are weighing IPOs, as well. Intarcia Therapeutics, a biopharma developing therapies for chronic diseases, and Guardant Health, the provider of a non-invasive tool for accessing and sequencing tumor DNA, are reportedly expected to float fairly soon.

Meanwhile, two VC-backed healthcare companies have announced their intent to go public this year: Athenex, an oncology pharmaceutical company, will trade on the NASDAQ under the symbol ATNX. Myomo, the provider of myoelectric orthotics and support services, has said it plans to trade on the NYSE under MYO in a so-called mini IPO, which allows for small investors to get a return on their investments.
Read more of our coverage on the healthcare industry. PitchBook users can access the full data on health-related companies.

Article by Kate Clark, PitchBook

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