It’s already shaping up to be a huge year for digital health M&A, and the headlining announcement from our action-packed first week was Transcarent’s acquisition of publicly traded benefits rival Accolade.
The $621M price tag is undeniably a big move for Transcarent, which launched in 2020 to make it easier for employees to access all of their care needs through a single convenient interface, their smartphone.
- The platform connects members to comprehensive experiences including Cancer Care, Weight Health, and Surgery Care (through provider partnerships), while also simplifying how employers manage and track that care.
- Transcarent recently landed $126M in Series D funding at a $2.2B valuation, which it earmarked for AI innovations like its new WayFinding solution, and for taking advantage of juicy M&A opportunities in beaten-down competitors.
Accolade is a personalized health and benefits company with a long list of offerings that includes virtual-first primary care, navigation services, and expert medical opinions.
- Despite raising $220M during its 2020 IPO, Accolade turned into an attractive acquisition target after struggling with revenue growth and booking a $100M loss during the latest fiscal year.
- Accolate will add over 1,000 clinicians to Transcarent’s team, as well as deep data integrations with a wide partner ecosystem across diabetes, mental health, fertility, and MSK care.
Transcarent now plans to fold Accolade into its existing platform, bringing together the “best of provider, partner, and payor ecosystems.”
- By integrating its WayFinding and comprehensive care experiences with Accolade’s expert medical opinions and primary care, Transcarent expects to drive higher utilization and lower costs (+Accolade’s 16 years of health data for AI training was a nice kicker).
The Takeaway
At a time when point solution fatigue is crippling employers and public healthcare companies have lagged behind the broader market rally, Transcarent’s acquisition of Accolade seems like the right move at the right time. It could also mark the beginning of a much bigger M&A wave in digital health, especially if valuations continue looking too appetizing to pass up.
