European non-public fairness agency Nordic Capital acquired Boston-based well being information platform Arcadia this week. The deal makes Nordic the bulk proprietor of Arcadia, marking an exit for earlier investor Peloton Fairness.
Arcadia’s platform contains AI-driven instruments designed to assist payers and suppliers undertake value-based care effectively, in addition to enhance sufferers’ experiences and outcomes.
The latest time the corporate raised capital was in 2023, when it acquired $125 million in financing from Vista Credit score Companions. Simply final 12 months, Arcadia underwent a serious enlargement, merging with CareJourney, a well being analytics agency that facilitates participation in value-based care contracts.
Arcadia’s new deal comes at an thrilling time within the digital well being world, identified Arcadia CEO Michael Meucci. Governments are investing in higher healthcare know-how infrastructures, payers and suppliers are partnering on information sharing initiatives, and extra stakeholders are collaborating than ever earlier than, he famous.
When Nordic pitched this deal to Arcadia, the corporate wasn’t actively elevating capital, however it had been making ready for this sort of progress alternative, Meucci mentioned.
“Nordic’s view is that the one option to resolve the healthcare value downside within the U.S. is the adoption and democratization of value-based care. So it simply was the suitable time for us to say, ‘Let’s hyperlink arms collectively and assault this collectively.’ Their pitch to me was, ‘We may pour rocket gas on it.’ And I already thought we had been transferring fairly quick, so I’m not going to say no to that,” he remarked.
Meucci famous that Nordic is backing Arcadia’s present management and progress technique reasonably than making an attempt to function the corporate straight. Nordic will contribute capital and experience from its community, however day-to-day execution will stay with Arcadia’s present workforce.
In Meucci’s eyes, the deal suits right into a broader development — that strategic healthcare investments have gotten more and more targeted on interoperability, AI and fee reform.
He additionally sees the transaction as a validating second for value-based care know-how, as he thinks Nordic’s entry into the value-based care know-how area sends a sign to the market.
“I believe we’re seeing a brand new class of deal rising. It’s not prefer it was in 2021, however there’s been loads of healthcare deal exercise. You’ve obtained an entire bunch which have gotten executed within the final six months. I really feel prefer it sort of began with Surescripts,” Meucci acknowledged. “There have been six or seven fairly large offers that I believe are illustrating that there’s a theme round digitization and information change, in addition to fee mannequin transformation and adoption of AI at scale.”
As an illustration, New Mountain Capital acquired Machinify in January, melding it with different AI-powered fee integrity companies to create a $5 billion firm targeted on healthcare billing accuracy. And simply final week, healthcare AI startup Abridge closed a $300 million Collection E funding spherical — simply 4 months after closing its $250 million Collection D spherical.
Going ahead, Meucci desires to shift value-based care from a facet initiative to a core working precept for suppliers and payers, and he thinks Arcadia’s platform may help them accomplish that.
The corporate is investing closely in AI instruments, together with massive language model-driven conversational analytics, to assist suppliers and payers work extra effectively in value-based care preparations, he added. He additionally famous that Nordic’s funding will permit Arcadia to proceed constructing new instruments and selectively purchase firms that improve its choices.
Nordic and Arcadia should not disclosing the monetary phrases of the deal, which is anticipated to shut within the second half of this 12 months.
Picture: Natee Meepian, Getty Photos
