Bright Health Buys Zipnosis, Steps into Telehealth
Minneapolis-based Bright Health Inc. didn’t have to look far for its latest acquisition. Bright Health just acquired Zipnosis Inc. Both companies are based in the North Loop area of downtown Minneapolis.
The move brings Bright Health into a new line of business: telehealth. Zipnosis, led by cofounder and CEO Jon Pearce, has built a telehealth platform which offers virtual care to nearly 60 larger health systems around the U.S. Last year Zipnosis screened and treated more than 2 million patients.
Bright Health did not announce the deal itself. Instead, it was disclosed by New York-based Cain Brothers, which bills itself as a “preeminent health care investment bank.” Cain Brothers served as the financial advisor to Zipnosis in the deal.
Bright Health’s core business has been the creation of a brand-new health insurance plan, now available in 13 states across the U.S. But the company continues to expand into new areas. Earlier this year, it came to light that Bright Health had acquired more than 40 advanced care primary clinics, largely in Florida.
There is now a buzz that Bright Health may be looking to do an initial public offering (IPO) this year. To date the company has raised more than $1.5 billion in financing, a staggering number by Minnesota startup standards.
The Crunchbase web site, which tracks company fundraising data, indicates that Zipnosis had raised $24.8 million through various rounds of financing. In 2016 Twin Cities Business included Zipnosis in “The Next Big Things,” a look at five promising local companies. Almost a year ago, TCB again briefly profiled the company in a story on pandemic-induced pivots.
Pennsylvania-based Safeguard Scientifics Inc., a publicly traded company and Zipnosis investor, separately announced exiting its ownership interests in the telehealth company.
According to the company’s statement on the transaction:
“Safeguard received $3.3 million of initial cash proceeds and a preferred equity interest in Bright Health Group, a national integrated healthcare company. The majority of the consideration we received in the transaction is reflected in this preferred equity interest. Additional cash proceeds may be received from the final determinations of net working capital and the resolution of various escrow contingencies. Safeguard will report a gain on the sale of the Zipnosis ownership interest for the quarter ended March 31, 2021, based on the total value received from the transaction.”
Safeguard had invested $10 million in Zipnosis since 2015.