A-Z of Healthcare: V-Z

In the final part of our A-Z we look at visualisation, wellbeing, X-rays and diagnostics, youth services and Zoom healthcare.


By using software to deliver resources traditionally deployed through on-premises hardware, virtualisation is allowing healthcare teams to perform important functions, such as accessing medical records, reading radiology scans or delivering telehealth visits, regardless of their location.

A-Z of Healthcare VisualisationIn so doing, the potential for safe, scalable tools to be developed that will allow health professionals to work from anywhere without sacrificing quality of care is creating countless opportunities for investors.

Rowena Gracey, director at 3i, argues the pace of change in the healthcare market has been accelerated exponentially in recent years, and not just by covid-19.

She says: “The real drivers of the adoption of virtual solutions are the technology, the consumerisation of healthcare, and the productivity benefits. Over and above that, the covid dynamics of the last 12-18 months have really driven even faster adoption because there have been limited alternatives.”

A classic example of the investment potential created by the virtualisation trend can be seen in 4Ways, which operates a 24-hour, tech-enabled service that provides routine, out-of-hours and specialist clinical reporting on diagnostic images to help hospitals and other healthcare providers deliver quicker results to patients.

ECI, the UK private equity firm, invested in 4Ways in 2018, after Synova Capital, a growth investor, generated a return of 6x and an IRR of 75 percent after three years backing the business.

ECI investment manager Laura Morrill says artificial intelligence and machine learning technologies have a key role to play in scaling such businesses: “The key thing looking forward is the idea of robots reading scans. We see AI as an opportunity rather than a risk, because AI can help triage and point humans in the direction of where to focus, which creates efficiencies.”

However, David Bainbridge, managing director at VSS, which partners with lower mid-market companies in US healthcare, cautions that such opportunities require careful evaluation.

He says: “The key issue is getting to understand the value proposition: are they offering access to better care, or better care at lower cost than the current models. If they aren’t doing either of those, then the chances are they’re not sustainable long term.”


With mental health and wellbeing top of the agenda for employers during remote working, this is creating investment opportunities at the intersection of healthcare and business services.

A-Z of Healthcare WellbeingUK growth-company investor ECI invested in CIPHR, a specialist provider of HR software, in 2020 and quickly identified an opportunity to expand into wellbeing.

“That’s a really topical area for us, both in terms of portfolio growth opportunities and standalone opportunities,” says investment manager Laura Morrill.

Standalone wellbeing investments are still in their infancy, however. “The challenge at the moment is that wellbeing has gone up the agenda so recently that many of these businesses are still quite small,” says Morrill. “For us, as a mid-market investor, we are waiting for certain scale and profit.”

Growth capital firm Puma Private Equity led a $7.5 million investment into health engagement company Tictrac in June last year, a provider of digital platforms designed for corporates and insurance companies to increase health and wellbeing engagement among employees and customers.

Rupert West, managing director, said at the time of the investment: “Tictrac’s ability to heighten engagement is delivering real value to their customers whilst simultaneously driving focus among individuals on their own wellbeing. We’re all aware of the importance of this.”

X-rays and diagnostics

Teleradiology is stepping up to meet burgeoning demand, with the need for telediagnostic services on the rise.

A-Z of Healthcare X-rays & diagnosticsIn 2018, the UK-based growth-focused private equity firm ECI invested in 4Ways Diagnostics, a business that operates a 24-hour, tech-enabled service to provide clinical reporting on diagnostic images to hospitals and other healthcare providers.

“There is a massive demand and supply mismatch when it comes to x-rays and diagnostics,” says ECI investment manager Laura Morrill. “Lots more people are getting scans, and that’s because of the ageing population, advancing treatments and knowledge of diseases, and technology allowing complex scans to happen more easily.

“But there is a limited pool of radiologists to look at and interpret those scans; it takes over 10 years for people to train as radiologists, a lot of them are coming up to retirement age and there are stringent rules on accreditation.”

There is also the chance to invest in technology, including AI, to speed the work. Phil Robinson, MD in CVC’s healthcare team, says: “The opportunity for advancing imaging techniques to support computer-aided, minimally invasive surgery is increasing, enabling faster recovery times, shorter hospital stays and overall better patient experiences. There is a lot more coming through in the precision diagnostics and associated imaging space that is guided by data and better technology.”

Youth services

Behavioural healthcare is an area of growing private equity interest, particularly in the US, where a growing number of investors have targeted mental health and autism provision to young people.

A-Z of Healthcare Youth servicesDavid Bainbridge, managing director of VSS, which partners in sectors including healthcare and education, says: “One area we like a lot is behavioural health for schools, providing better services to schools and school districts that maybe don’t have access to mental health support locally. The pandemic has shown that mental health is something we should address for everybody and especially the youth, and telehealth can offer solutions outside of schools’ immediate geographies.”

There is also a growing demand for support to young people with autism. “We have also invested in a few different schools, one dealing with children with autism and another supporting those with learning difficulties,” says Bainbridge.

Century Park Capital Partners, based in California, is another investor, having backed Dominion Youth Services in 2018. The business is a leading provider of behavioural and mental health services to young people in Virginia, including school, clinic and home-based counselling: “The highly fragmented industry provides plentiful consolidation opportunities,” Century Park says.

Bainbridge adds: “Providing those services to children has been proven to deliver a greater impact on their lives. Once those outcomes can be measured and positive impact demonstrated, there will be even greater demand.”

Zoom healthcare

Just as many of us embraced Zoom calls for our work meetings in 2020 despite having it at our fingertips for years, so patients have quickly woken up to the benefits of interacting with their healthcare professionals via videocall.

A-Z of Healthcare Zoom healthcare“Covid has accelerated the roll out and adoption of telemedicine (using tools like Zoom),which we have been waiting for over the last 20 years,” says Cathrin Petty, managing partner and head of healthcare at CVC. “We’ve seen a transformation in the way that medicine can be delivered, information and education shared with physicians and testing and diagnosis achieved remotely. This momentum has to continue in order to solve the huge burden of demand for healthcare against the backdrop of budgetary constraints and labour shortages.”

PE funds are queueing up to take advantage of the shift in delivery models, though identifying the right investments is not straightforward.

Greg Belinfanti, senior managing director at One Equity Partners, says: “We see this as an attractive space, though we have had difficulties finding assets that fit within our valuation parameters. The multiples on telehealth platforms are high and/or the assets are more growth companies that have yet to hit their stride in terms of sustainable profitability. But we think this is a trend that’s here to stay. “In some ways, covid has expedited and increased the use of telehealth and people have become more comfortable with it, though for us it’s a difficult sector to invest in. But most, if not all, of our portfolio companies are looking at some aspect of telehealth.”