European tech giant Philips has inked a deal to acquire Medumo, a startup focused on tracking and triaging patients. The news, which CNBC first reported, means the small Boston-based company will now be joining Philip’s growing digital health portfolio.
“We're excited to share with you that Medumo is now a Philips company,” reads a banner on the Medumo website. “Our partnership with Philips will empower us to continue to serve our existing customers while further expanding our connection to more patients and providers. Philips' commitment to global health perfectly complements Medumo's commitment to improving patient navigation.”
A MassChallenge health tech accelerator (formerly Pulse@MassChallenge) alumni, Medumo focuses on helping patients prepare for appointments. It uses texts, emails, phone calls and paper mailings to reach patients. For example, the company teamed up with Brigham and Women’s Hospital on a colonoscopy preparation service.
WHY IT MATTERS
As the digital health industry continues to grow in both funding and notoriety, many are started to look at company’s exit strategies. While the number of IPOs in the space has been low, mergers and acquisitions continue to be a popular exit avenue for startups. Rock Health reported 43 this year, but said this was a downward trend from last year. However, the research group predicts more in the future.
“We expect other categories of acquirers to become more active in the coming years,” the authors of the recent Rock Health report wrote. "As more non-healthcare organizations enter the healthcare industry, their strategies include buying external innovation in addition to building it internally. Technology companies and other non-healthcare companies are consistently the second and third most active acquirers, respectively, in our Digital Health M&A Database."
THE LARGER TREND
It’s no secret that Philips has been on the lookout for emerging digital health companies. In June it led a funding round for Babyscripts, positioning itself as a minority stakeholder. At the time the company announced its plans to package Babyscripts’ provider and patient platforms alongside the international health tech company’s other obstetrics-focused products.
But funding isn’t the only way the technology company is expanding into digital. In March it acquired health information system Carestream Health. Additionally, the Dutch company acquired VitalHealth for its cloud-based population health management technology in 2017.