DigitalHealth InvestorTalk Show Now We Need To Win 'The Scale Game' with Steven Wardell, Alyssa Jaffee, and Chrissy Farr
May 9, 2025
Alyssa Jaffee, a partner at 7wire Ventures focused on healthcare technology, and Chrissy Farr, founder of Scrub Capital and CEO of Second Opinion Media, discuss the pressing need for digital health companies to scale in an increasingly competitive landscape. They analyze the challenges posed by large healthcare incumbents and the necessity for startups to solve bigger problems to remain relevant. The conversation also touches on fundraising dynamics, the split in investor interest, and the potential for mergers and acquisitions to aid in growth.
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Hospital Funds Lead Rounds
- Hospital venture funds are increasingly leading digital health financings.
- These deals secure patient system buy-in and create competition challenges for rivals.
Incumbents Demand Bigger Scale
- Healthcare incumbents have grown significantly larger, requiring digital health companies to scale more to be relevant and acquired.
- Acquirers now expect target companies to have much higher revenue thresholds, often over $150 million.
Digital Health Valuation Decline
- Digital health valuations have declined, with acquisitions now happening at ~2x revenue multiples.
- This shift pressures startups to accept lower offers and reconsider their growth and exit strategies.