The Boston Globe has an interview with Chris Bischoff, who helps lead health care investing at Cambridge-based venture capital firm General Catalyst, in which he suggests that Amazon's planned acquisition of the One Medical health care system could prompt activity around other healthcare startups.
“We’ve clearly seen these big tech companies come in ... I’m overall optimistic that it will enable change to happen more quickly,” Bischoff said, adding that "health care needs a broad ecosystem of different companies with different specialties and strengths, so there should still be room for startups to flourish … I don’t think Amazon’s move will be unnoticed. Clearly there will be some further consolidation. There’s going to be some interesting [mergers and acquisitions] coming out of digital health as we go into 2023."
Bischoff points out that "the pandemic exposed deep vulnerabilities in the system … But on the other side, it also demonstrated the power of technology and innovation to transform. It proved that the health care sector can accept change — when faced with existential crisis."
The Globe writes that "Amazon’s purchase, and the down market, may encourage other tech companies to get involved in buying smaller players. Both Google and Apple have already targeted the health care market with their own apps and data services."
- KC's View:
I'm no venture capitalist and, therefore, not nearly as smart … but this is sort of the point I was making here yesterday.
I think there's almost certainly going to be moves by the likes of Walmart, Kroger, Target, CVS, Walgreen and Apple to partnering with or even acquiring companies that will keep them in the healthcare game to a greater degree. I think that Mark Cuban is likely to be getting some phone calls from one or more of these companies that will be interested in teaming up with his CostPlus business. And I think that there are some smaller health-oriented technology companies that, even in this economy, may find themselves in a seller's market.