Kaiser Permanente, a US-based health and insurance company, is in advanced talks to lead an investment of $200–250 million in Innovaccer, a Silicon Valley-based digital healthcare company, as per a report by the Economic Times. The funding will be both primary and secondary.
However, the valuation for the secondary transaction will be lower than its peak valuation. The company was valued at $3.2 billion in December 2021. A source who spoke to the Economic Times said, “The blended valuation would be around $2.5 billion.”
As per the report, the minimal increase in valuation for the initial fund injection into the company indicates the decreasing valuation multiples in annual recurring revenue. This is something that is seen in SaaS companies worldwide. From October 2021 to October 2022, there was a 75 per cent decrease in SaaS valuation, as per a report by TechCrunch. While having recorded valuations of up to 40x revenue in 2021, they have fallen to around 10-15x now, as per the report.
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Meanwhile, spokesperson for Innovaccer denied that any talks were taking place between the two companies, according to the report. Another existing investor who will take part in the round is Mubadala Capital, a global asset management firm from the UAE.
Innovaccer is backed by investors such as Mubadala Capital, Tiger Global, Lightspeed, Steadview Capital, and Microsoft’s M12 fund. Until now, the company has raised $375 million. As per a report by TechCrunch, the ties between Kaiser and Innovaccer go back a back a long time. Kaiser had been a customer of Innovaccer. Similarly, several executives from Kaiser had joined Innovaccer. Recently, Kaiser joined hands with Innovaccer to add AI solutions to its platform. Abhishek Shashank, co-founder and CEO of Innovaccer, said that this partnership will help advance the company's value-based care expertise, technology, and services.
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