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If you want to get a pulse on digital health, Missy Krasner is an excellent person to ask.
For the last several years, Krasner was the venture chair at Redesign Health, a venture studio that builds health tech companies. Before that, the digital health veteran was an integral part of Amazon’s healthcare push, working on connecting Alexa devices to the healthcare system.
Health startups are facing a challenging buyer market that makes it hard to grow organically, whether they’re selling to employers or Medicare Advantage plans, Krasner told Endpoints News in an interview. But the down market creates new opportunities for startups that are doing well and generating revenue to grow through acquisition, she said.
“For those that are heads down, revenue’s rich, executing well, it’s a fantastic M&A market,” Krasner said.
Krasner said she expects to see more winning startups pick up smaller ones that had some business but couldn’t sustain it or failed to execute. She pointed to UpLift, a virtual therapy and psychiatry startup founded in 2020 that acquired two mental-health companies in the past year.
Krasner, who stepped into an advisory role at Redesign at the start of this year, is now building a new generative AI health startup with Fawad Butt, former UnitedHealth Group chief data officer. Krasner serves on the board of five companies, including UpLift and Syntax, a company that helps providers and payers strike value-based care contracts.
Though the funding environment is still sluggish, Krasner said there’s still “a lot of money out there” for seed and Series A startups. She predicted that VCs will keep placing their bets in three areas: behavioral health, value-based care enablement, and generative AI, particularly for back-office tasks.
She’s most bullish on the behavioral health space, where the demand for care is huge but access remains so poor.
“You’ve got all these really interesting digital health companies that are trying to solve the access problems, trying to solve the insurability and affordability problems, and also trying to just do a better job with medication management and diagnostics,” she said. And, she said, there are still big populations like those on Medicaid that need better behavioral health services. “That’s why it’s still an investable category.”