Contributed: Blank check-up uncovers a digital health SPAC attack

Contributed: Blank check-up uncovers a digital health SPAC attack

The 2020s are on course to become the decade of the special purpose acquisition companies (SPACs), also known as “blank check” or “shell” companies. SPACs are set to outpace IPOs once again in 2021, after a record year that saw SPACs mature from a once obscure method of going public to a rabid, flavor-of-the-month frenzy amidst both institutional and retail investors.

The year of COVID-19 saw 227 SPACs top traditional IPOs for the first time in history, raising $76 billion, compared to 67 billion raised from traditional IPOs. The first two months of 2021 have so far generated 144 SPACs, raising $44 billion. Digital Health has certainly ridden the recent SPAC wave, with yet a few more splashes yet to come. 

As of the writing of this article, there are over 400 SPACs at various levels of development chasing the blessing of 500-plus unicorns (private, mostly venture capital-funded companies worth over $1 billion).

The following is a select list of blank check companies that have either merged with or are planning to merge with a digital health darling. Note that since a SPAC has two years to find an acquisition target, many of the earlier SPACs were listed as far back as 2019. The typical process after a listing is for the SPAC’s management team to announce a potential acquisition target.

Usually, the announcement must be unanimously approved by both management teams and boards of the SPAC, and the private target company. The stockholders of the SPAC must then vote on the acquisition, which is usually unanimous. The final step involves the close of the combination and completion of the merger, resulting in a ticker change and symbolizing the start of the once private company officially becoming public.

(Editor’s note: Of the companies listed below, Razouki said he is an angel investor in Cera Care, and is long BFLY, HIMS, VGAC, SBG, HEC, HAAC, MTAC and CPUH.U by investing in a combination of stocks, warrants and units.)


Longview Acquisition Corp. (LGVW)

Date of listing: 7/17/2020

Merged with: Butterfly Network Inc.

Date merger announced: 11/20/2020

Date merger approved: 2/12/2021

Date merger completed: 2/16/2021 with LGVW ticker changing into BFLY

Performance of SPAC (as of March 3rd, 2021): 67.7%

Longview started as an affiliate of leading healthcare investment firm Glenview Capital Management, which owned, along with its affiliates, 7.6% of the combined SPACs outstanding shares. Longview is chaired by Glenview CEO, Larry Robbins. Leading institutional investors including Eldridge, Fidelity Management & Research Company LLC, Glenview, Ridgeback, Tenet Healthcare Corporation, UPMC Enterprises and Wellington Management had anchored a $175 million private investment in public equities (PIPE) at $10 per share, which is the usual floor price of a SPAC.

Butterfly Network is a medtech company that manufactures the Butterfly iQ, an ultrasound transducer that can perform “whole-body imaging” with a single handheld probe, using semiconductor technology. Connected to a mobile phone or tablet, it is powered by Butterfly’s proprietary Ultrasound-on-Chip technology and harnesses the advantages of artificial intelligence (AI) to deliver advanced imaging that aims to improve patient outcomes and lower the cost of care.

All of existing Butterfly Network’s existing investors, including Baillie Gifford, The Bill and Melinda Gates Foundation and Fosun Industrial Co., Limited, converted their equity into shares of the combined company.

Oaktree Acquisition Corp. (OAC)

Merged with: Hims & Hers

Date of listing: 9/13/2019

Date merger announced: 10/1/2020

Date merger approved: 1/19/2021

Date merger completed: 1/21/2021 with OAC ticker changing into HIMS

Performance of SPAC (as of March 3rd, 2021): 50.2%

OAC is the first SPAC launched by Oaktree Capital Management, a global investment manager specializing in alternative investments, with ~$150 billion in assets under management. Oaktree Capital launched its second SPAC, Oaktree Acquisition II (OACB) in September of 2020, raising $225 million in the process.

Originally focused on men’s health, Hims & Hers prefers to now label itself as a telehealth company modernizing the delivery and accessibility of digital, consumer-focused healthcare services. The transaction will enable further investment in growth and new product categories that will accelerate Hims & Hers’ plan to become the digital front door to the healthcare system

The combined company is to have an implied initial enterprise value of approximately $1.6 billion, with the company expected to have an estimated $330 million in cash after closing. Top-tier investors, including Franklin Templeton and clients of Oaktree, anchored a $75 million PIPE, again at a $10 floor price.

As with Butterfly, existing institutional backers of Hims & Hers, including Founders Fund, Forerunner Ventures, IVP, Redpoint Ventures, Thrive Capital, McKesson Ventures and the Canadian Pension Plan Investment Board, rolled 100% of their equity into the SPAC.

Social Capital Hedosophia Holdings Corp. III (IPOC)

Date of listing: 6/12/2020

Merged with: Clover Health Investments, Corp.

Date merger announced: 10/6/2020

Date merger approved: 1/6/2021

Date merger completed: 1/8/2021 with IPOC ticker changing into CLOV

Performance of SPAC (as of March 3rd, 2021): -17.1%

IPOC is one of several SPACs launched by Silicon Valley scion and erstwhile enfant terrible Chamath Palihapitiya. The transaction valued Clover at an enterprise value of $3.7 billion and provided up to $1.2 billion in cash proceeds, including a fully committed PIPE of $400 million and up to $828 million of cash held in the trust account of Social Capital Hedosophia Holdings Corp. III. The PIPE was led by a $100 million investment from Palihapitiya and $50 million from Hedosophia, as well as commitments from Fidelity Management & Research Company and funds affiliated with Jennison, Senator Investment Group LP, Casdin Capital and Perceptive Advisors.

Clover is a next-generation Medicare Advantage insurance company offering best-in-class plans that combine wide access to healthcare and rich supplemental benefits with low out-of-pocket expenses. A unique model in health insurance, Clover partners with primary care physicians using its software platform, the Clover Assistant, to deliver data-driven, personalized insights at the point of care.

Earlier this month, Clover Health revealed that it received a letter from the SEC following the publication of an article by renowned short seller Hindenburg Research. Allegations included claims that Clover Health had not properly disclosed that its business model and its software offering, Clover Assistant, were under active investigation by the Department of Justice (DOJ). The DOJ is still currently investigating at least 12 issues ranging from kickbacks to marketing practices, to undisclosed third-party deals. CLOV stock is down ~47% since the publication of the report, resulting in a market cap of around $1.19 billion.

Merger announced

Virgin Group Acquisition Corp (VGAC)

Date of listing: 11/20/2020

Merging with: 23andMe

Date merger announced: 2/4/2021

Expected date merger completed: Q2, 2021

Suggested new ticker: “ME”

Performance of SPAC (as of March 3rd, 2021): 9.2%

Virgin Group Acquisition Corp (VGAC) is the first SPAC backed by evergreen entrepreneur Sir Richard’s Branson’s eponymous Virgin Group. No stranger to SPACs, Branson’s space startup Virgin Galactic merged with Palihapitiya’s first SPAC back in the early days of April of 2020, somewhat sparking the current skyrocketing SPAC-mania.

23andMe is a leading consumer genetics and research company that offers a personalized health and wellness experience that has built a genetic database to unlock insights leading to the rapid discovery of promising new targets for drug development. The transaction will provide the capital to fund additional investment in key growth initiatives across 23andMe’s consumer health and therapeutics businesses.

The transaction will value the outstanding shares of capital stock of 23andMe at an aggregate enterprise value of approximately $3.5 billion. It is important to note that the announcement was made a mere two months after 23andMe disclosed closing an $80 million venture financing round led by Sequoia Capital and NewView Capital.

Both 23andMe CEO and Cofounder Anne Wojcicki and Virgin Group’s Branson are each investing $25 million into a $250 million PIPE and are joined by leading institutional investors including Fidelity Management & Research Company LLC, Altimeter Capital, Casdin Capital and Foresite Capital. The pro forma cash balance of the combined company will exceed $900 million at closing and the current shareholders of 23andMe will own 81% of the combined company.

Sandbridge Acquisition Corp (SBG)

Date of Listing: 11/5/2020

Merging with: Owlet Baby Care

Date merger announced: 2/16/2021

Expected date merger completed: Q2, 2021

Suggested new ticker: “OWLT”

Performance of SPAC (as of March 3rd, 2021): -1.1%

Launched in 2012 by a committed team of parents, Owlet has built a connected and accessible nursery ecosystem that brings technology and vital data to modern parenting. Owlet’s flagship product, the Owlet Smart Sock baby monitor, uses proprietary and innovative pulse-oximetry technology to track a baby’s real-time heart rate, oxygen levels and sleep patterns to provide parents with invaluable peace of mind. The Owlet Smart Sock integrates seamlessly with Owlet’s camera product, the Owlet Cam, enabling parents to see and hear their babies via Owlet’s natively developed smartphone app.

The reverse merger with SBC values Owlet on a pre-transaction basis of $1 billion in equity value and values the post-transaction combined company at an enterprise value of approximately $1.074 billion. The SPAC is expected to deliver up to $325 million of cash to the combined company, after payment of estimated transaction expenses, through the contribution of up to $230 million of cash held in Sandbridge’s trust account and a $130 million concurrent PIPE of common stock. PIPE participants include leading institutional investors such as funds managed by Fidelity Management & Research, Janus Henderson Investors, Neuberger Berman Funds, OrbiMed, private funds affiliated with PIMCO and Wasatch Global Investors.

As part of the transaction, Owlet’s current management and existing equity holders, including Eclipse Ventures and Trilogy Equity Partners, intend to roll nearly 100% of their equity into the combined company.

Hudson Executive Capital LP (HEC)

Date of Listing: 7/31/2020

Merging with: Talkspace

Date merger announced: 1/13/2021

Expected date merger completed: Q1/Q2 2021

Suggested new ticker: “TALK”

Performance of SPAC (as of March 3rd, 2021): 1.3%

Hudson Executive Investment Corp. is a SPAC led by Doug Braunstein and Doug Bergeron of Hudson Executive Capital, which has an outstanding track record in healthcare and technology as both an investor and a strategic partner to public companies.

Talkspace targets a vast unmet need in behavioral health, improving access and outcomes while reducing costs via a telemedicine platform focused on mental health services. The transaction and partnership with Hudson Executive Investment Corp. is expected to help Talkspace grow its user base, add partnerships, and expand internationally. The pro-forma enterprise value of the transaction is approximately $1.4 billion including a 300 million fully committed PIPE anchored by leading investors including the Federated Hermes Kaufmann Funds, Jennison Associates, Woodline Partners and renowned healthcare alternatives investor Deerfield.

Still searching

Health Assurance Acquisition Company (HAAC)

Date of Listing: 11/13/2020

Performance of SPAC (as of March 3rd, 2021): 10.2%

Founded by a triptych of venture capitalist from General Catalyst; Hemant Taneja, Evan Sotiriou, and Quentin Clark, HAAC aims to partner with leading healthcare businesses leveraging technology to create consumer-centric, data-driven, cloud-based solutions that can both bend the cost of care and improve wellness. The aim is to support the target company’s efforts to become an iconic category winner that accelerates the digital transformation of existing healthcare into a new system of health assurance.

HAACU is supported by an independent board of directors that include digital health demigod Glenn Tullman, who was the former CEO of Livongo and Allscripts, as well as with Dr. Stephen Klasko, Dr. Jennifer Schneider and Anita V. Pramoda

MedTech Acquisition Corporation (MTAC)

Date of Listing: 12/18/2020

Performance of SPAC (as of March 3rd, 2021): -0.3%

MTAC was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with a company primarily operating in the medical technology sector in the U.S. The company is led by Medtech maverick and Chairman Karim Karti, who is the current COO of iRhythm Technologies and the former president and CEO of GE Healthcare’s Imaging Business. MTAC’s day-to-day management is led by CEO Christopher Dewey, CFO David Matlin, and Chief Administrative Officer Robert Weiss. In addition to Karti, Dewey and Matlin, the company’s board of directors includes Maurice Ferré, Martin Roche and Ivan Delevic, with Michael Stansky as a special advisor.

Compute Health Acquisition Corp (CPUH.UN)

Date of Listing: 2/5/2021

Performance of SPAC (as of March 3rd, 2021): 3.9%

Compute Health Acquisition Corp. is a recently-formed SPAC that raised just over $862 million, making it the richest SPAC so far on our list before deducting. The units began trading on the New York Stock Exchange (“NYSE”) under the ticker symbol “CPUH.U” on February 5, 2021. For a while, it was briefly known by the ticker CAHC.

In a unique structure compared to the SPACs we have so far covered, each unit of CPUH.U consists of one share of Class A common stock and one-quarter of one redeemable warrant. Think of warrants simply as long term options to buy more stock. Each whole warrant may be exercised for one share of Class A common stock at a price of $11.50 per share following the later of 30 days after the completion of the company’s initial business combination and 12 months from the closing of the company’s IPO. Once the securities comprising the units begin separate trading, the shares of Class A common stock and warrants are expected to be listed on the NYSE under the symbols “CPUH” and “CPUH WS,” respectively.

Like other blank check companies covered, CPUH is formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more healthcare businesses that are already leveraging, or have the potential to leverage, computational power, with an emphasis on companies in the medical device space, including imaging and robotics; and companies operating in the virtual care space, including telehealth, care delivery and next-generation payor and provider models. The company’s management team is led by the former Medtronic Chairman and CEO and current Intel Chairman Omar Ishrak, Jean Nehmé and Joshua Fink.

In mid-February, it was disclosed that the Public Investment Fund (PIF), the $400 billion sovereign wealth fund of the Kingdom of Saudi Arabia, had purchased a 8.7% stake in CPUH.U, while Medtronic PLC, a medical device giant with a current market value of about USD 155bn, had expressed interest in purchasing 1.5 million shares of CPUH in the offering, according to prospectus.

Just Filed

Blueprint Health Merger

Date Filed: 2/26/2021

Blueprint Health Merger is a recent blank check company that joined the SPAC race in February. Formed by Blueprint Health, which has not selected a symbol yet, Blueprint Health Merger will be targeting digital healthcare businesses and plans to raise up to $200 million in the public offering.

The company is Providence, RI-based and led by CEO and Director Dr. Rajiv Kumar, the former president and chief medical officer of Virgin Pulse who was also the cofounder and former CEO of ShapeUp; and Chairman Richard Harrington, the former CEO of The Thomson Reuters Corporation.

A Brown University and Brown Medical School Alumnus, Kumar is also the cofounder of Brown Angel Group; a global network of 700-plus angel investors who leverage capital, connections and community to support early stage startups founded by Brown University alumni. Their investments to date have been in wide-ranging industries including computer vision, robotics, consumer packaged goods, health & wellness, digital health and talent recruitment. Brown Angel Group portfolio companies include RootAI, KineticEye, Jiant Kombucha, Pangea, CandooTech, Minded, Premama and Siren Snacks.

Revolution Healthcare Acquisition

Date Filed: 3/1/2021

Revolution Healthcare Acquisition is the latest a blank check company to join the digital health SPAC race on Monday, March 1. It is formed by both General Catalyst (who are still actively searching for a target for their HAAC SPAC) and ARCH Venture Partners.

The Cambridge, MA-based company plans to raise $500 million by offering 50 million SAIL (Stakeholder Aligned Initial Listing) securities at $10. Similar to CPUH, each SAIL security consists of one share of common stock and one-fifth of a warrant, exercisable at $11.50. At the proposed deal size, Revolution Healthcare Acquisition would command a market value of $525 million, making it the second-largest health SPAC after CPUH. The sponsors promote is only 5% due to the SAIL construct, which uses a performance-based incentive structure to create alignment.

The company is led by CEO Jay Markowitz, who is a senior partner at ARCH Venture Partners, and Chairman Jeff Leiden, the executive chairman of Vertex Pharmaceuticals. The company plans to target businesses at the intersection of healthcare, life sciences and technology, and plans to list on the Nasdaq under the symbol REVHU.

Potential digital health unicorns in SPAC crosshairs:

Babylon Health

Babylon Health is a London-based health service provider that provides remote consultations with doctors and health care professionals via text and video messaging through its mobile application. It is founded by the former cofounder and CEO of Circle Health UK, Dr. Ali Parsa.

Babylon Health could be an interesting target specifically for CPUH.UN as both entities share significant investments from of Saudi Arabia’s PIF. The PIF led the most recent $550 million round investment in Babylon during the summer of 2019 which also included investments from German reinsurer Munich Re’s ERGO Fund and an undisclosed U.S. health insurer — which a Sky News report identified as Centene.

It is interesting to note that both Alireza Zaimi, senior managing director at the PIF of Saudi Arabia and Babylon CEO Parsa share similar investment banking pedigrees at both Goldman Sachs and Merrill Lynch.

The PIF is no stranger to blank check bestsellers, having recently seen SPACtacular success with the completion of the long-rumored reverse merger of Lucid Motors with the undisputed King of SPACs, Michael Klein’s Churchill Capital Corp IV (CCIV). The PIF earned over a 30X return on its $1 billion venture capital investment in Lucid Motors made back in September 2018 plus an additional $600 million through a $2.5 billion private investment in public equity, or PIPE, the largest of its kind on record for a SPAC deal resulting in an ~62% super majority ownership of the high flying EV manufacturer. Michael Klein of Churchill Capital has since gone one to launch three more black check companies, bringing the King’s total to a realm of seven SPACs.

However, a reverse merger of Babylon would be tricky given both the financial downfall of Circle Health in 2012 and recent reports pointing to a complex corporate structure. There are a labyrinth of related offshore companies that ultimately lead to Jersey-based Minotaur Babylon Holdings, which, in turn is controlled by ALP Partners, yet another offshore company most likely owned by none other than the Daedalian Parsa. One of those entities, Babylon Partners helped develop the NHS branded GP at Hand, a 24-hour general practitioner video consultation service app, which recorded a loss of £95 million in 2019, up from £59 million, and the company has total liabilities of £261 million since it started in 2013. Another entity, Babylon Healthcare Services, actually runs GP at Hand, but is part of the same complex corporate structure and also lost £1.8 million for 2019.

Cera Care

Cera Care is a London-based technology-enabled home care company established to allow families to arrange, schedule and manage home care for elderly relatives, it uses an on-demand digital platform to match people seeking in-home assistance with professional caregivers, allowing them to stay updated on a patient’s progress, while also using AI to predict potential health deteriorations.

Cera Care was formally launched in early 2016 by Dr. Mahiben Maruthappu and since then has developed a £100 million M&A pipeline including a robust diligence process for selecting acquisitions of traditional home care service providers.

Cera Care introduced a chatbot, Martha, created in partnership with Bloomsbury AI, as a virtual assistant able to review patients’ digital records and answer questions for both patients and caregivers, basing the answers on data points gathered by care workers and digitized care records. Cera Care later developed a patient care dashboard to provide patients with on-demand access to care, medications, transportation, food and doctor’s services via tablet computer. It also claims to have developed a platform that predicts patient deteriorations by computing the risk of events such as hospitalizations based on caregiver input.

CMR Surgical

CMR Surgical (formerly known as Cambridge Medical Robotics) is a British medical technology company based in Impington. It produces a robotic surgery system called Versius and could be a match-made-in-heaven target for medtech-focused SPAC MTAC. It was incorporated in 2014 and in 2018 employs over 400 people.

Founded in 2014, CMR Surgical raised $100 million in the summer of 2018 in Europe’s largest ever deal for a medical devices company, including investments by Cambridge Innovation Capital, the Zhejiang Silk Road FundEscala Capital InvestmentsLGT Group and Watrium. The current valuation is considered to be around $1 billion.

Biomimicking the human arm, the Versius gives surgeons the choice of optimized port placement alongside the dexterity and accuracy of small fully-wristed instruments. With 3DHD vision, easy-to adopt instrument control and a choice of ergonomic working positions, the open surgeon console has the potential to reduce stress and fatigue and allows for clear communication with the surgical team. By thinking laparoscopically and operating robotically with Versius, CMR plans to help both patients and surgeons benefit from the value of robotic minimal access surgery (MAS).

Devoted Health

Devoted Health is a healthcare company serving seniors in the U.S. and aiming to launch Medicare Advantage plans. The firm’s mission is to help its silver tsunami users navigate the healthcare system with personal guides. It can be considered a competitor to Clover Health.

Devoted Health’s current valuation is $4.99 billion, having raised $369 million from Andreessen Horowitz, F-Prime Capital, Oak HC/FT Partners and Premji Invest amongst others.


HeartFlow is a digital health company aiming to transform how heart disease is diagnosed and treated. HeartFlow provides a new approach to non-invasive diagnosis of coronary artery disease (CAD), which is considered one of the leading causes of death in the U.S. Leveraging deep learning and trained analysts, HeartFlow creates a personalized, digital 3D model of patients’ coronary arteries based on data from CT scans.

HeartFlow’s current valuation is $1.77 billion, and it has raised from BlueCross BlueShield Venture Partners, US Venture Partners, Baillie Gifford & Co, Capricorn Investment Group, GE Ventures, HealthCor Management and Martis Capital amongst others.

Hinge Health

Hinge Health developed a digital care program to manage chronic back and joint pain. The company’s software application combines sensor-guided exercise therapy with health coaching and education and collects real-time insight into clinically valid outcomes such as pain, stiffness and functional ability.

Hinge Health’s current valuation is $1.77 billion, and it has raised $453.9 million from 11.2 Capital, Atomico, Bessemer Venture Partners, Coatue Management and Heuristic Capital Partners amongst others.

Lyra Health

Lyra Health provides mental health benefits for employees and dependents. Lyra Health uses a proprietary matching technology and digital platform to connect companies and their employees – plus spouses and children – to therapists, mental health coaches and personalized medication prescribing. Lyra can be considered as a direct competitor to Talkspace.

Lyra Health’s current valuation is $2.3 billion, having raised $284.1million from Adams Street Partners Addition Breyer Capital Castlight Health and Casdin Capital amongst others, the latter of which are invested in both IPOC/CLOV and VGAC.

Modern Health

Modern Health is yet another technology play on mental health, but this time as a benefits platform for employers. The company covers the full spectrum of mental well-being needs through both evidence-based technology and professional support from either a coach or therapist.

Modern Health’s current valuation is $1.17 billion, raising $94.1 million from 01 Advisors, Afore Capital, Battery Ventures, Felicis Ventures, and Founders Fund amongst others, the latter of which are invested in HIMS.


Formerly known as Roman, Ro is a patient-driven telehealth company that aims to put patients in control of their health. The company builds technology to make healthcare accessible, affordable and enjoyable. Ro powers three digital health clinics – Roman for men’s health (its original focus that was similar to HIMS), Rory for women’s health, and Zero for fighting smoking cessation – and Ro Pharmacy, a simple and affordable online pharmacy where every generic medication is priced at the attractive rate of $5 per month

Ro’s current valuation is $1.5 billion and it has raised $476.5 million from 3L, Aaron Harris, BoxGroup, FirstMark Capital, and Forbes Media amongst others.


Although patient booking pioneer ZocDoc recently raised $150 million earlier this month in a round led by Francisco Partners, the New York-based firm has been rumored to be a strong target of multiple technology-focused SPACs. Expanding beyond its core patient booking service, ZocDoc added a vaccine finder feature and a telehealth scheduler in 2020 as a response to the COVID19 pandemic. In December of last year, a lawsuit by former cofounder and CEO, Cyrus Massoumi was dismissed by the New York State Supreme court allowing current CEO and cofounder Dr. Oliver Kharraz to completely focus on continuing the company’s rapid expansion into telehealth.

ZocDoc’s current valuation is $1.77 billion, having raised a total of $383mn from Atomico, Baillie Gifford & Co. Bezos Expeditions, DST Global, Founders Fund, Khosla Ventures, Goldman Sachs amongst others.

Dr. Mussaad M. Al-Razouki is the chief business development officer of Kuwait Life Sciences Company (KLSC), a life sciences and healthcare investment company. An oral and maxillofacial surgeon by training, Dr. Razouki received his MBA with a focus on Healthcare Management and Finance from Columbia Business School.