Patient 21: Berlin HealthTech raises €100m

They not only offer software with which to plan the entire patient journey, but also manage medical practices: Founded in 2019, Patient21 has developed into one of the largest medical practice chains in Germany, with more than 300,000 patient visits per year, more than 30 clinics Doctor, eg gynecology, dentistry, and even a hospital in Heidelberg in the portfolio. Behind him is serial entrepreneur Christian Mohr, who previously co-founded Citydeal (exit to Groupon), served as COO of Auto1 and also appears as co-founder of McMakler, HeavenHR and Endy Sleep.

Patient21, which is headquartered in Berlin, is in a major funding round of €100 million. The funding round is being led by Israeli VC Pitango, who specializes in part in HealthTech. Other investors include Bertelsmann Investments, Artian, Target Global, Piton Capital, PICO Venture Partners, and angel investors like Mario Kohle (Enpal) and Maria Raga. The funding round consists partly of equity and partly of debt – the latter meaning borrowed capital in the form of credits or loans, which is particularly unusual in recent months given the economic situation. Recently, InsurTech wefox raised 110 million euros, half of which was a loan from banks.

Criticism of the business model

For Patient21, it’s not the first round of funding. At the beginning of 2022, the startup had already raised $142 million, and at that time Target Global was the lead investor. Until then, the lead investor said it’s important to run clinics, programs, and hire doctors. Not everyone likes the fact that companies funded by venture capital firms and private companies buy and pool medical practices. in Online petition German Health Minister Karl Lauterbach (SPD) has called for a halt to the “sale” of medical practices because it results in “expensive medicines, unnecessary checks and unnecessary operations”.

Investment companies are buying doctors’ offices across the country. They don’t care about our health – but about their profits. Because the healthcare sector is booming: more than 213 billion euros were spent in the outpatient sector in 2020. So investors hope for high returns, ”says the petition regarding business with medical practices.

Amazon enters the healthcare field with the acquisition of One Medical

“Improve, not replace, personal care”

But back to Patient21. Vertically integrated medical practices built on software are not uncommon. In the United States, for example, the prime example is Carbon Health. In 2022, e-commerce giant Amazon enters the healthcare field with the acquisition of One Medical for several billion dollars (Trending Topics reported). While US counterparts also offer TeleHealth services, Patient21 is (for now) focused on operating its 32 locations in Germany with more than 100 physicians, as well as on its dental department.

The current healthcare system places a heavy administrative burden on clinicians and physicians, leaving them with less time to spend with their patients. In some specialties, the physician spends, on average, less than seven minutes with the patient during a visit. Our technology is designed to improve personal care, not replace it, because we believe the focus should be on people,” CEO Mehr said in a press release. The new funds will be used to expand into other European markets.

Vertical integration in health is nothing new in and of itself. In 2021, for example, startup Qunomedical has teamed up with Dutch clinic group Bergman Clinics to take over Medical One. Was a provider of cosmetic and plastic surgery at 12 locations across Germany (common topics reported). This shows that the physical component is very important, especially in the health sector, and that often it is not enough just to deliver programmes.