Inside the Lemonaid Health Buy: Kyle Pretsch on Bambu Ventures’s Bold Play

Cheddar News

Bambu Ventures's Kyle Pretsch dives into Lemonaid’s $10M buyout, down from 23andMe’s $400M price tag, and what’s next after Chrome Co.’s dramatic pivot.

Transcript

00:00Today, we're taking a closer look at the state of digital health, including, of course, the

00:04bankruptcy of 23andMe and the recent $10 million acquisition of Lemonade Health by Bamboo Ventures

00:10and Innova Capital. Joining us now to discuss the deal, the future of the general telehealth space

00:16and his firm's plans is Kyle Prech, Kyle's general partner at Bamboo Ventures. Very grateful for your

00:22time. Thanks for joining us, Kyle. Good to have you. Thanks for having me. So what did Bamboo see

00:28in terms of Lemonade with regards to a strategic decision for the company, despite the well-known,

00:34very public struggles of 23andMe previously? I mean, I think we saw a gem in the rough. It was

00:40absolutely a diamond in the rough. It's a fantastic team. It's a fantastic regulatory environment with

00:46dynamic changes happening that are promoting telehealth and, you know, drug pricing and

00:52transparency. And there's still a need for patients to be able to access great care and good treatment

00:58and so we just saw a phenomenal asset that was operating. You know, yes, 23andMe has continued

01:05to cultivate a very, very powerful health division and we just saw an opportunity to take that to the

01:10next level. I wonder how significant you think that price tag is versus the $400 million deal,

01:17I believe it was, previously for 23andMe. That's it. They paid for the platform back in 2021.

01:22You know, I think we would all tell you, we think we got a phenomenal deal and a phenomenal

01:29opportunity. I think, you know, we're just very, very fortunate. If you look at that price tag,

01:34$400 million to $10 million, you would assume, you know, you eroded value. And honestly, we don't

01:40think that's the case. We don't think the value has eroded. We think it has grown, you know, and it

01:45just traveled in a vehicle that was tied to a much larger bankruptcy case and it gave us a fantastic

01:52opportunity. Yeah, like you said, that was a Chapter 11 bankruptcy protection that was filed back in

01:58March. There was, in addition to financial struggles, a well-known major data breach that

02:03compromised customer information. Anyone who now looks at this space with regards to the headlines

02:08is going to wonder, how does any new entity keep user data safe? How would you say you are approaching

02:14that conversation? You know, telehealth's not new. And, you know, the good news here is that we're a

02:21pioneer in the space. And, you know, the data, the breach happened quite recent in the terms of after

02:28the acquisition of Lemonade. So the system's never integrated. And the flip side of that, we don't have

02:34the genetic data. We are focused on people's health care. We're no different than a doctor's office,

02:39a hospital, and we provide the same, if not better data protection. And, you know, very fortunately,

02:46we're not connected with the breach. And so we just go to the consumers and remind them that we

02:50have great standards. The privacy team at 23andMe has done a fantastic job recovering from that breach

02:56and bringing even improvements in those standards that has positively affected Lemonade. And, you know,

03:02again, we provide, you know, better data security than you'll probably see at your local practitioner.

03:07Well, I think it's safe to say a lot of people were introduced more broadly to the theme of

03:12telehealth during the pandemic. How has this space evolved even in just the last five years? I got

03:17to imagine there's a new emphasis on AI, emerging technologies, and probably things you feel like

03:23you could do now you couldn't five years ago. 100%. I mean, we often talk about our biggest risk

03:28is all of the great things that are happening and staying focused. And so for us, you know, you're 100%

03:35correct. While there's great, great opportunities in AI, there's great opportunities in, you know,

03:40big data and how to analyze and work with patients. For us, it comes back to the same three things,

03:47accessibility to good care, right? Transparency and pricing, and creating a stable system where

03:54patients are given great care. But also, you know, we put them in a process that they're going to

04:00improve their lifestyle. And so we're really focused on making it easy for people to get,

04:05you know, what should be easy to get prescriptions and healthcare, right, that's previously been

04:10difficult. Let's make it easy to go get things that will change their life drastically. And

04:14Lemonade has done a phenomenal job of doing that. Is there a genetic data component to the deal as

04:19well? I think that's one thing that a lot of people understandably probably associate with the

04:2423andMe. Absolutely. I mean, and look, the original vision is fantastic in how they want to go grow and

04:31use genetics in combination with healthcare. And there's no doubt that's where the industry is

04:35going. As part of this transaction, we are staying focused on going to the general public with

04:40accessibility, transparency, and in great care to problems that we know exist everywhere, regardless

04:47of genetics. I think we're well cultured from the genetic benefits and the education we've received

04:52with 23andMe is going to be fantastic. But we're not taking data or building a genetics business,

04:57we're building a broad spectrum healthcare business. What role would you say, Kyle,

05:01Innova Capital played in making this deal possible? And what should people know there about the

05:06relationship? And I suppose for a deal like this, you probably have a pretty good variety of partners

05:13to choose from. Why them? Well, you know, the first thing is, with all partnerships, the reason there

05:20are named partners in this is because they have been equal participants in this, and we couldn't

05:25be here without them. So that's number one. Second is, you've got to assemble a team of the right people,

05:31not the most interested people. And so for us, their partnership brought, you know, filled opportunities

05:36for our team to give us a robust board, a robust set of directors, to add confidence. And just,

05:43you know, you're trying to build a team that has the right skill set to guide in a complicated and

05:49innovative space. And so when we think about our partnership with Innova, they really brought in

05:54a phenomenal quality. And that's been a longstanding relationship that we're excited to

05:58grow together with. Yeah, certainly the broader spirit to the financial markets, any company is

06:03about growth, outlook, projections for the future. And I'm curious where you see the biggest market

06:08opportunities in telehealth. And more specifically, where do you think Lemonade fits into that?

06:13You know, I go back to the original vision of Lemonade, which was to improve healthcare.

06:18I go back to the regulatory environment that is striving to go make transparency and accessibility

06:24a hallmark of the American healthcare system. And, you know, we want to do that far more broadly than

06:30I think our competition. We want to be able to be a way to provide that care, that accessibility,

06:36that convenience, which is a huge part of our model, and to make it affordable, you know, irrelevant of

06:42all those other factors. You know, we're reading today about the government stoppage in Medicare.

06:46You know, we've built a system that's agnostic of those risks, and does it at what we believe is

06:51an affordable price, and will continue to become even more affordable. What makes us different is,

06:56you know, we do it broader, we keep our own pharmacy, we keep our own doctors. So we're not,

07:01we're not nickel and diming you for the ability to access healthcare. We're in fact, building our

07:05business off of getting you a consistent stream of the drugs you need to have a better lifestyle,

07:10you know, out the door when you. You have mentioned regulations and the kind of easing of the

07:18regulatory environment a couple times since we started chatted. And I'm curious, you could just

07:22walk me through a bit more. What has that conversation looked like now in 2025 relative to

07:27previous years? And are you confident that the next three years of this administration may continue

07:33to allow a pathway, an ecosystem, an environment where regulations overall, and maybe the burdens

07:41associated with them can continue to be eased a bit more? Absolutely. I mean, the announcement of

07:47Trump Rx, right, is a huge reform that brings transparency to drug pricing. And so when we think

07:53about what Lemonade is built to do, it's built to thrive in an environment where patients and providers

07:57see real value. And it's built on a model where there's no hidden costs. And so as there's a push

08:03for recognition of that, where there's a push for patients to move to that model and to value that

08:08model, you know, we see this as being a phenomenal environment where, again, we thrive. And when we

08:12think about, you know, the more global regulatory aspect, people are following these footsteps.

08:18Pharma plays a huge role in innovation. And, you know, we're seeing there be a drive to get

08:22patients more affordable and accessible care, generics, branded drugs, innovative new therapies,

08:27and we're well poised across all three. And so when we think about then taking that global,

08:32our platform is designed to work with different payer systems, different regulatory frameworks.

08:36And so we see that opportunity for us to expand and adopt into the regulatory environment that,

08:41to your point, is changing in a post-COVID world. Kyle Pritch is the general partner at Bamboo

08:46Ventures. Thanks a lot for taking the time to join us on the show. Give us the much needed context on

08:51the deal. Best of luck, Kyle, to you and your colleagues on the road ahead. Thanks for being here today.

08:56Thanks for having me.

Category

Transcript

Be the first to comment

Recommended