The news: CVS Health, through its corporate digital health VC fund CVS Health Ventures, is investing $100 million in primary and urgent care provider Carbon Health. The funding is part of an initial close of Carbon’s Series D round.
How we got here: Carbon said just a few days ago it was slashing its global workforce by more than 200 people—marking its second major round of layoffs in the past 7 months. The startup also said it will be sunsetting certain segments of its business, including remote patient monitoring.
CVS’ primary care test run? As part of the deal, CVS will pilot Carbon Health’s primary/urgent care operating model inside select retail stores. That will include using Carbon’s home-grown electronic health record (EHR) to help improve the patient experience.
The retail giant has made its intent to acquire a primary care business blatantly clear. The Carbon investment is not an acquisition, which means CVS could still be on the lookout for one.
Our take: We see this investment in Carbon as a trial run. If the pilot goes swimmingly, then maybe an acquisition could follow. Or perhaps CVS would be granted the first right of refusal in the event of a Carbon sale.
In the meantime, don’t expect CVS’ explorations into primary care startups and the rumors that follow to stop anytime soon. But it’s likely that CVS’ interest in Oak Street won’t amount to an acquisition, particularly at a price that values the company at nearly 5x its expected 2022 revenues.
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