Physitrack, a London-based supplier of digital bodily remedy and affected person engagement expertise, is kicking off an M&A push with information that it has bought one among its main rivals.
Physitrack CEO and cofounder Henrik Molin instructed MobiHealthInformation that the corporate has acquired Physiotools, a Finnish firm that bought its begin promoting bodily remedy books, however through the years shifted its enterprise towards software program, telehealth and different options.
The deal comes simply weeks after Physiotools’ personal acquisition of Mobilus Digital Rehab, one other bodily remedy affected person engagement technology-maker based mostly in Sweden, based in 1996. As such, each corporations now fall underneath the Physitrack umbrella.
The deal was closed on Monday. Molin didn’t disclose the phrases, however mentioned that it was paid for in a mixture of money and shares. With it, Physitrack’s roughly 20 staff will be a part of Physitrack’s smaller group of 13, he mentioned.
The Physiotools acquisition is not prone to be Physitrack’s solely buy throughout the foreseeable future. The firm is framing that deal because the launch of an M&A program that can goal different digital well being corporations that Physitrack believes may also help its enterprise. Molin mentioned that the subsequent deal will seemingly prioritize a technical development for the Physitrack platform.
“There are other companies that we’re looking at that have tech that’s really interesting, that can really help us with the innovation side of things and fast-track some things we were looking at in the past,” he instructed MobiHealthInformation. “So, ideally, the next company we buy will be more [focused on that], but hopefully we can combine the tech side of things with some of the financial upside as well.”
Molin additionally hinted that his firm is already shifting into a possible lead, and to count on one other deal announcement inside the subsequent a number of weeks or months.
WHAT’S THE IMPACT?
While future purchases could also be eyeing new applied sciences, Molin described this week’s deal as “more financial than tech based” in its aim, with a concentrate on how every enterprise may complement or assist the opposite develop its operations.
Both Physitrack and Physiotools have wholesome margins and market management in several international locations or areas, he mentioned. Further, Physitrack’s enterprise serves greater than 20,000 smaller entities, whereas Physiotools has 6,000-entity clientele that skews heavier towards enterprises and bigger practices.
Looking extra long-term, Physitrack’s automated signups and processes could possibly be carried out amongst Physiotools’ extra handbook processes to drive effectivity, he mentioned, whereas Physitrack stands to learn from Physiotools’ “very competent sales support team” as they eye worldwide growth.
“The idea with Physiotools was really revenue focused. It’s a way to grow quickly and fill blank spots on the map,” he mentioned. “And there are synergies. It’s an old business. It’s conservative. It’s a similar mindset to us. We’ve grown very rapidly, but we’ve had that conservative focus on how everything was set up with making and spending money. Looking at it, there [are] so many things we can do as a joint company in terms of making things run more efficiently.”
Pre-merger, Molin mentioned that Physitrack was bringing in practically $5 million in income, whereas Physiotools was claiming roughly $2.5 million. The mixed corporations can even have a presence in 187 totally different international locations. Based on his data of rivals within the area, corresponding to MedBridge, Physiotec or PhysioWizard, Molin mentioned that Physitrack now stands as the most important supplier of bodily remedy digital care expertise by way of income and consumer base.
It’s price noting that his declare does not depend digital bodily remedy and musculoskeletal care platforms, like Hinge Health or the just lately acquired Physera, that additionally embody a human overlay. These enterprise fashions are extra sophisticated and far larger threat than a expertise supplier play like Physitrack’s, Molin mentioned, and are enabled by main funding help from VCs.
Physitrack, in the meantime, was largely self-funded, because of cofounder and CTO Nathan Skwortsow’s prior profitable exits. As a outcome, it was structured to remain out of the purple. Although the corporate has thus far aimed its capital at high-margin M&A alternatives, Molin wasn’t able to rule out a push past software program someday down the highway.
“If you’re big enough for that high-margin approach, you will have cash that you can deploy, and you can take the risk and pretty much act like a VC-funded company and take that risk,” he mentioned. “That’s not something that we’re ruling out … We could upgrade and take that risk.”
Human layer or not, there’s nonetheless a broad vary of digital musculoskeletal or bodily remedy apps accessible throughout the market – and it is no small feat for suppliers to pick the most suitable choice for his or her sufferers.
ON THE RECORD
“For where we are in patient engagement and tech, size really matters,” Molin mentioned. “That was one of many key deciding components for us doing this deal, as a result of it’s worthwhile to maintain innovating, continue to grow, maintain localizing and going wider together with your tech. And additionally it’s worthwhile to be extra refined. And the twist is which you can’t cost that a lot for it, as a result of this can be a extremely, extremely price-sensitive market. So you want absolutely the dimension by way of income to make this work.
“You need a number of customers who you charge [only a little bit of money] to make that business work,” he continued. “That’s, I think, the only viable way to justify your existence in the digital health space going forward, if you’re not VC-funded.”