- Datavant is on the hunt for more acquisitions in 2025, Business Insider has learned exclusively.
- The healthcare data startup has made 11 acquisitions since its founding in 2017.
- While Datavant isn’t rushing to IPO, the startup’s growth could signal an exit in the future.
Datavant is hungry for more acquisitions as the $7 billion healthcare data startup inches closer to an IPO. The company is planning at least “one or two” more acquisitions in early 2025, CEO Kyle Armbrester told Business Insider exclusively.
Datavant, which manages patient data exchanges between providers, payers, and life sciences organizations, has made 11 acquisitions since 2017. The company kicked off a fresh M&A rush in the fall, picking up data privacy organization Trace Data and two data analytics products from healthcare AI startup Apixio in September.
Datavant hasn’t publicly announced funding since its $7 billion merger with Ciox Health in 2021. Private equity firm New Mountain Capital is the company’s controlling shareholder.
With “well over” $1 billion in revenue and steady profitability, CEO Kyle Armbrester said Datavant expects to make these acquisitions with the cash on its balance sheet.
The M&A flurry could be a good sign for Datavant’s IPO potential. Flare Capital Partners’ Parth Desai told Business Insider in December that he expects private-equity-backed healthcare companies to make tuck-in acquisitions in 2025 as they look ahead to potential IPOs in 2026.
While Datavant won't be first in line to IPO when digital health companies start going public again, Armbrester didn't rule out the possibility of a Datavant IPO in the next year.
"If market conditions are right, and there's a need for cash to continue to grow the business, that's great," he said. But, he added, "there's no drop dead date."
AI's big data business
Datavant works with a range of customers, including health systems, insurers, and life sciences organizations, to digitize and manage patient data exchange for tasks like clinical research and population health analytics. Today, the startup says it works with more than 70,000 hospitals and clinics.
As demand for digitized healthcare data has exploded — even more so with the advent of AI, with mass amounts of data needed to train advanced models — Armbrester said Datavant's business is booming.
"There's been a pretty rapid pace of digitization of a lot of manual workflows in healthcare, and we've been a benefactor of that," he said.
With cash flowing into the business, Armbrester said, Datavant is looking for "one or two" additional acquisitions going into 2025. The startup is looking for companies building technology for healthcare providers and life sciences organizations, he said.
Armbrester said he's primarily hunting for great products with existing market traction that Datavant can elevate with its deep data pools and customer bases.
"We're large and diversified, and I think we're in a really good space to take a smaller smarter and apply their logic or artificial intelligence or analytics across that vast network to see a lot of benefit," Armbrester said.
Datavant could be a strong IPO candidate for the next wave of digital health IPOs, investors and bankers told Business Insider in 2024.
Armbrester's entry as Datavant's CEO also bodes well for the company's IPO prospects. Armbrester stepped up into Datavant's CEO role last June after six years leading Signify Health, where he steered the healthcare analytics and services provider through its 2021 IPO and its $8 billion acquisition by CVS Health in 2023.
While Datavant has stayed quiet in recent years about any fundraising, the outlet Buyouts reported in September 2023 that New Mountain Capital was looking to extend its investment into Datavant through a continuation fund in a deal that would give Datavant additional capital.
Armbrester didn't comment on the fundraising reports but acknowledged that Datavant's business maturation could lend itself to a public market debut.
"We're certainly at a size and scale where going public could be something that we contemplate," he said.
But Datavant isn't feeling any short-term pressure from New Mountain or the rest of its board to make an IPO decision. "We've got plenty of cash on the balance sheet to do all the M&A I've just described and fund product roadmap investment as well," Armbrester said.