Health data startup Komodo Health has laid off 9% of its staff as part of a larger restructuring of its business.
The COVID-19 pandemic created opportunities for the analytics company, Komodo’s cofounders Arif Nathoo and Web Sun wrote in a message to employees that was also posted on LinkedIn. But the current economic environment is forcing its customers to seriously consider their purchasing decisions.
“As a business, we continue to be well positioned to weather these changes — we provide critical visibility into the healthcare system to support the strategic decisions enterprise healthcare leaders need to make,” they wrote. “That said, we have a responsibility to all of you — our team and shareholders — to invest responsibly in that growth. We have always prided ourselves on running a capital efficient business, and today we’re taking steps to ensure that we are well positioned for the current world around us.”
According to reporting by TechCrunch and Fierce Healthcare, Komodo also recently closed a $200 million structured equity infusion led by Coatue Management with participation from Dragoneer Investment Group.
The startup last announced a $220 million Series E round in March 2021 that boosted its valuation to $3.3 billion.
THE LARGER TREND
Founded in 2014, Komodo offers a data platform that collects de-identified patient encounters. That information can be used to create software for life science companies and insurers to determine how patient experiences connect to health outcomes.
Though rumors suggested the company was targeting an IPO this year, Insider reported last month that challenging economic conditions pushed the company to reconsider its plans.
After a booming year of digital health investment and public exits in 2021, few companies have taken the plunge into the public markets this year. A number of digital health and health tech startups have laid off staffers.
Dr. Sunny Kumar, partner at GSR Ventures, told MobiHealthNews the economy and threats of recession will encourage healthcare industry players to analyze their spending next year.
“If you look at all of the buyers — whether that be health systems, payers, pharma, even consumers themselves — all of them are going to be a little bit more conscientious with their spending,” he said. “So, what we’ve seen already is that anybody selling to those customers has to make sure that their solution is either mission critical or generating an extremely high value proposition.”