On 12 October 2021, Best Buy, an American multinational consumer electronics retailer, acquired Current Health, a developer of a patient monitoring platform designed to manage patients at home, for an undisclosed amount.
Tech – Current Health: Founded in 2014 in the United Kingdom, Current Health is a developer of a patient monitoring platform designed to manage patients at home. The company's platform assimilates data from the home to detect and predict health deterioration, enabling patients to share their daily activities, report symptoms and answer structured questionnaires with their doctor.
Non-Tech – Best Buy: Best Buy is the largest pure-play consumer electronics retailer in the U.S., with roughly 10% share of the aggregate market and nearly 40% share of offline sales. The firm generates the bulk of its sales in-store, with mobile phones and tablets, computers, and appliances representing its three largest categories.
As the COVID-19 pandemic has taken millions of lives and affected billions more, it has led to extreme pressures on our healthcare services, healthcare professionals, and the broader society.
As a result, bringing quality healthcare into the home has become an increasingly important part of the healthcare system, often allowing patients better access and quality of life while helping to reduce costs.
Best Buy management believes this trend towards offering health care in the home has accelerated the reliance on the consumer-friendly technology that Best Buy offers, allowing the company to play an even more crucial role in bringing virtual care to life.
Best Buy established a division, Best Buy Health, which has a mission to help enrich and save lives through technology and meaningful connection. The company believes Current Health fits very well with this mission, as both companies share a similar vision for the future of healthcare and the home becoming a primary site of care.
Current Health originally launched its model in the U.K. and has grown by over 3,000% since the beginning of 2020. After the company raised ca $42 million in July 2021 to scale up its remote patient monitoring solution, it found a strategic partner in Best Buy.
With Best Buy’s reach, and experience with supply chain logistics and support services, Current Health CEO Christopher McCann said it would be easier with Best Buy to provide a high-touch consumer experience at scale.
Three years ago, Best Buy made headlines when it made its first big bet on healthcare, acquiring GreatCall for $800 million.
Now, the tech retailer is taking its plans a step further with the techquisition of Current Health.
“We have the distinct expertise in helping customers make technology work for them directly in their homes and by combining Current Health’s remote care management platform with our existing health products and services, we can create a holistic care ecosystem that shows up for someone across all of their healthcare needs.”
- Paolo Deborah Di Sanzo, President of Best Buy Health
Like most techquisition deals, the market reacted favourably to the Current Health announcement given the positive outlook associated with the strategic potential of the techquisition and how it fits with Best Buy’s strategy.
Best Buy’s share price increased by approximately 5.8% from 12 October (day of Current Health announcement) to 18 October 2021, compared to an increase of approximately 3.1% in the S&P 500 index during the same period, implying a net additional increase of 2.7% or $710 million to Best Buy’s market capitalisation.
This net increase in Best Buy’s market value represented an approximate 7x increase on Current Health’s funding valuation approximately two months earlier (31 July 2021), thus containing the prospects of a value-enhancing deal for Best Buy.
The COVID-19 outbreak not only brought the global economy to a standstill but it also exposed the inadequacies of the developed world’s health systems in addressing fast-spreading pandemics. As governments, health systems and businesses scrambled to contend with the crisis, they renewed the interest in technologies and initiatives that can provide solutions.
HealthTech is the fastest growing vertical within the healthcare sector. It includes any technology-enabled healthcare product and service that can be delivered or consumed outside of a hospital or physician’s office, with one notable exception being hospital and practice management software.
In 2020, venture funding for health tech innovators crossed a record US$14 billion. Even as the economy and industries, including the health care industry, reel under the impact of the COVID-19 pandemic, venture funding for these innovators nearly doubled in 2020, compared to 2019.
In terms of revenue, global healthTech market was valued at US$96 billion in 2019 growing at a CAGR of 19% over the forecast period (2020-2028). The study analyses the market in terms of revenue across all the major regions.
Health technology continues to push the boundaries of how healthcare is delivered and has the power to create breakthroughs in our understanding of disease. Emerging spaces within healthcare and healthTech include:
“The future of consumer technology is directly connected to the future of healthcare,”
- Christopher McCann, CEO of Current Health
The techquisition of Current Health is evidence that Best Buy understands the huge opportunity of health care in the home that will become dependant on consumer technology.
Indeed, Best Buy sees an opportunity to build a broader care ecosystem by combining Current Health’s platform with its existing health products, Best Buy Health President Deborah Di Sanzo said in a news release.
The “ecosystem” opportunity in health care is potentially transformative for Best Buy. Currently, the company has its Jitterbug phones for seniors and emergency alert systems that it acquired through GreatCall, along with a suite of senior-focused home monitoring services it bought with Critical Signal Technologies.
In an August investor call, Best Buy CEO Corie Barry noted that the company had doubled the number of vendors it offered for its fitness, wellness, and health products, specifically focusing on products to help people monitor health conditions by tracking blood glucose levels or monitoring heart data. She also said the company was working with hospitals and clinics to curate health products for their patients.
“Over the coming decade, significantly more healthcare can be delivered in the home. We started Current Health to make that exciting transition radically easier for healthcare providers to achieve,”
- Ananth Christopher McCann, CEO of Current Health
Along with the likes of Amazon (Nasdaq: AMZN) and Walmart (NYSE: WMT), Best Buy has been one of the retail giants that has steadily increased its interests in both health care and the home over the last few years.
“We remain really optimistic about how the future of healthcare can be changed through technology and the role that we can play in that,”
- Corie Barry, CEO of Best Buy
Best Buy’s acquisition of Current Health is an example of how a non-tech traditional incumbent is actively engaging in the journey of transforming itself to deliver greater value to its stakeholders – particularly its shareholders and customers – by properly positioning itself for the future.
The essence of such a transformation unfolding is embedded in a strategy execution approach we have trademarked and call Techquisition, which my firm, Aquaa Partners, has designed and delivers to its clients every day as an experienced and trusted expert partner.
Sources: Aquaa Partners, company websites, Pitchbook, Tracxn, Capital IQ, LinkedIn, Frost & Sullivan, McKinsey, PwC, BCG