Healthcare marketing giant W2O just snapped up two more companies as it seeks to take on consultancies like Accenture and Cognizant

Jim Weiss, CEO, W2O Group

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W2O Group, one of the largest healthcare marketing and communications firms in the world, just acquired two more companies as it races to scale and take on large consultancies like Accenture and Cognizant and analytics firms like Komodo.

Swoop is a data and analytics company that helps healthcare clients identify potential patients for certain treatments, while data insights company IPM.ai provides data to speed up the research, development, and commercialization of therapies for patients affected by rare diseases.

The two companies, which collectively have a data pool of more than 300 million anonymous patients, will help expand W2O’s offerings to services like designing and executing clinical trials and launching products for clients. Previously, W2O got data from publicly available sources and social media through its own platform and Symplur, which it bought in 2020.

“Data is collected everywhere now,” W2O CEO Jim Weiss said. “It’s changed how we can leverage data and analytics and how we can find more efficient ways to target audiences, and market and communicate with them. The whole industry has been moving in this direction, and we modeled our business around those inevitabilities.”

Read more: 8 big investors like Golden Gate Capital and Stagwell Group that are betting billions on public relations firms

Most of W2O’s clients have been large biopharma companies like Astellas and Takeda, but it also wants to branch out to healthcare organizations like hospitals and medical technology companies, Weiss said.

W2O and Huntsworth Health have led consolidation in healthcare communications and marketing in recent years.

Healthcare marketing spending was a rare bright spot in the pandemic, and W2O flourished, with revenue up 50% to $350 million in 2020, in part on increased demand to promote telehealth clients to patients in lockdown, Weiss said. 

Growth also came from nine acquisitions W2O made since selling an undisclosed stake to private equity firm New Mountain Capital in 2019. W2O has acquired 11 companies since 2016.

Weiss projects the company will top $450 million in revenue in 2021; it’s hired McKinsey to help scale the company. Long term, W2O wants to expand to areas like healthcare e-commerce and launching therapeutic products through licensing agreements with pharmaceutical companies.

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10 public relations companies that are prime M&A targets in 2021, according to experts

Summary List PlacementPublic relations industry experts predict M&A will ramp up in 2021 as the economy improves.
PR firms are eyeing acquisitions in healthcare communications, which has been a consistent source of growth, as evidenced by financial communications firm ICR’s acquisition of Westwick Partners in 2019.
Deals like BCW’s 2018 acquisition of HZDG, which specializes in branding, advertising and digital, and W2O’s 2021 acquisition of Swoop, a data analytics company, show agencies also have an appetite for digital expertise and data analytics to inform and measure their campaigns.
After the pandemic had a cooling effect on M&A in PR software in 2020, deals are likely to pick up in 2021, said Chris Porter, an associate at Burton-Taylor Consulting, which analyzes the media intelligence industry.
Insider asked seven PR industry executives and consultants which firms and software companies could be hot acquisition targets in 2021. To be clear, none of these people said these companies were actually in talks.
Most of these companies either declined to comment or said they weren’t interested in a deal.
Below are 10 companies they named, listed in alphabetical order. Where available, their financial information is provided.BlueFocus

Recent troubles at China-based marketing giant BlueFocus has jumpstarted chatter across the PR industry, with one insider saying its stagnant stock price makes it particularly ripe for acquisition.
Market headwinds forced BlueFocus to shelf its plans to list subsidiary Blue Impact on the New York Stock Exchange via a merger with a SPAC called Legacy.
BlueFocus continues to own Blue Impact, a 2,400-person group with international assets like PR firm Citizen Relations and creative agency We Are Social, according to ProvokeMedia.
BlueFocus recorded annual revenue of $329 million in 2019. Its clients include Samsung, P&G, and Tencent.
Brunswick Group

1,200-person Brunswick Group is one of the biggest financial communications agencies in the world, with $324 million annual revenue, according to PRovokeMedia.
But Brunswick has had a bruising few years, starting in 2017 with the exit of Steve Lipin, who built the firm’s mergers and acquisitions practice. In 2018, women accused founder and chairman Alan Parker of allowing sexual harassment and bullying at nonprofit group Save the Children, where he served as chairman before resigning that year.
Brunswick declined to comment for this article.
However, the agency is clawing its way back, hiring prominent PR pros like Jonathan Doorley to revamp the mergers and acquisitions practice and CNBC’s Nik Deogun as CEO of the Americas and US senior partner.
Industry experts say Brunswick Group could be an acquisition target because of its strong financial communications business and because Parker hasn’t announced his personal plans.
Day One Agency

Six-year-old Day One bills itself as a “creative communications” firm, running campaigns that integrate social media, PR, and digital elements.
Along with an attractive client list, the company’s creative strengths would be valuable to PR agencies looking to grow outside traditional communications.
It helped Motorola launch its Razr flip phone, using a short film starring “Ozark” actress Julia Garner, a virtual premier, and promoted social media posts, according to PRWeek.
Day One’s other biggest clients include American Express, Chipotle, and Nike. It has offices in New York, Los Angeles, and Chicago and reported $24 million in revenue in 2020, a 13% year-over-year increase.
“We believe that by remaining independent, especially in today’s quickly changing world, we’re able to be nimble and move at the speed of culture — all qualities our growing team and established clients value,” CEO and co-founder Josh Rosenberg told Insider.
Finsbury Glover Hering

WPP-owned Finsbury Glover Hering was formed in 2020 through a merger of the three eponymous agencies, creating a $200 million agency that employs almost 700 people.
Each of the three focuses on a different aspect of PR: Finsbury handles crisis and financial communications in the US; Glover Park Group is a public affairs firm founded by former Clinton and Gore aides; and Hering Schuppener is a financial communications firm that handles business in EMEA.
Insiders see Finsbury Glover Hering as an acquisition target because of this combination of services and its global scale.
Speculation about the agency’s future was fueled by a Financial Times report that Roland Rudd approached WPP about buying back his business from the holding company in 2019.
Memo

PR startup Memo has won clients like Google and Walmart by pitching them precise measurement using data it obtains from publishers like Condé Nast, Forbes, and The Washington Post.
Memo has since started building on that service by packaging up the data with insights.
As marketers look to better measure the efficacy of their PR, Memo’s data assets could make it attractive to investors and competitors. CEO Eddie Kim told Insider he’s looking to raise funding in 2021.
The company has a headcount of 15 and growing, having recently hired Karlie Santucci as chief customer officer and Ashley Stires-Nouls as VP of people.
Muck Rack

Muck Rack is seen as a perennial acquisition target because of its high growth rate and software.
Founded in 2011 as a database of journalists, the company has expanded to other services like media monitoring and distribution.
The 100-person company is profitable and has grown 60% year-over-year since its founding, with clients like Taco Bell, Pfizer, and JP Morgan Chase.
Newswire

Founded in 2004, press release distribution company Newswire is attracting the attention of prospective buyers after increasing revenue 59% in 2020 on subscriptions and user growth.
A chunk of that growth can be traced back to the August 2019 launch of an earned media offering that helps clients publish their press releases, measures performance, and generates sales leads and web traffic.
Larger competitors may want to acquire the company to bolster their tech offering, one insider said.
Ruder Finn

PR firm Ruder Finn spun off Finn Partners in 2011, keeping the social media and digital business that’s considered its crown jewel.
That unit makes the $78-million Ruder Finn an attractive acquisition target, a former executive said. The firm is also the largest independent agency in China, surpassing even larger global players like Edelman, and it has a massive business in biotech and pharmaceuticals.
In recent years, Ruder Finn has acquired a number of businesses like marketing agency RLA Collective, internal communications firm SPI Group, video production house Osmosis Films, and PR firm Jacobstahl.
Sard Verbinnen & Co.

Sard Verbinnen & Co. sold a 40% stake to private equity firm Golden Gate Capital for $60 million in 2016.
The financial and crisis communications firm is approaching the five-year mark of that deal — the point when PE firms typically look for an exit — stirring chatter in the PR industry about possible buyers.
Since 2016, Sard has grown its headcount and revenues by more than 50%, opened new offices in Hong Kong and Washington, DC, made acquisitions, and expanded to public affairs and corporate governance.
A Sard insider said the firm sold to Golden Gate Capital because the private equity firm has a perpetual fund structure and Sard didn’t want to be under pressure to exit in five years.
Walker Sands

The 137-person B2B marketing firm recorded more than $20 million in revenue in 2020. Its services include PR, creative, and demand generation and it has offices in Chicago, Seattle, and San Francisco.
One agency CEO said Walker Sands would provide a foothold for any firm that wanted to get into B2B PR, calling it a “big area of opportunity.”
Walker Sands president Mike Santoro said the firm has no plans to be acquired. The firm got investment from private equity firm Stone-Goff in 2019 to open new offices and pursue acquisitions.
“We have an ambitious vision and anticipate making targeted acquisitions in the coming years,” he said.

A startup that raised $175 million to fix primary and urgent care is still struggling with what its CEO called the 'most complex' problem in healthcare

Summary List PlacementSome of healthcare’s problems are so complex that even the most well-funded startups struggle to fix them.
Carbon Health cofounder and CEO Eren Bali found out as much as his company tried to make prices for doctor’s visits, routine procedures like blood tests, and comparative prices for diagnostic tools like MRIs and x-rays transparent for patients, a feat that sounded simple at first but quickly ballooned into a much larger, systemic problem.
In a Twitter thread posted on December 27, Bali ran through the challenges he and his team had identified in trying to create a menu of sorts for different procedures and treatments for Carbon Health patients.
In the end, he ultimately said the fix lies with insurance companies — not healthcare providers — to fix the way patients and clinics are expected to pay for healthcare in the United States.
“The problem is on the payer side,” Bali told Business Insider. “The payer systems are old and antiquated, and that’s opaque to providers. We are doing all we can on the provider side.”
Read more: $1.5 billion digital-health startup Ro wants to be your online doctor. Here’s how its coronavirus response rooted in rapid at-home testing fits into the new unicorn’s long-term strategy.
Calculating prices ahead of visits proved difficult
Carbon Health serves a wide variety of patients with its urgent and primary care services. It offers booking through an app, and also added virtual visits to any patient seeking care but hesitant or unable to go into one of its physical clinics.
Ideally, Bali said, Carbon would be able to show patients the costs of these services upfront so that the doctor and patient can decide on the best course of treatment together, but hasn’t made as much progress as he would like.
Some relatively new healthcare entrants like Walmart have similar ambitions in making shopping for healthcare just as easy as shopping for groceries. Patients can find Walmart’s cash prices online, such as a primary care visit that costs $40.
Carbon Health has developed a system that works well for patients without insurance, Bali said, because pricing is more straightforward. It created a data analysis tool that looks at different inputs such as existing conditions, Carbon’s cost of service, and other factors to provide an up-front cost to uninsured patients, Bali said. For example, Carbon charges uninsured patients $195 for a primary care sick visit and $69 for a virtual visit, according to its website.
But it was when that same system was trained for patients with insurance that things started to unravel, Bali said. The calculated costs for patients with similar backgrounds, insurance plans, and symptoms only matched 40% of the time, Bali said.
“We can’t explain the difference,” Bali said.
Insurance companies are built on out-dated systems
Part of the variance can be explained by how complex insurance plans are, Bali said. Each plan is essentially unique to the individual that has it, and coverage can range widely even among similar plans offered by the same insurance company.
That’s not something that even the most sophisticated data analytics model can fix, Bali explained. If healthcare providers like Carbon want to tell patients how much they can expect to pay for a visit and associated procedures, insurance companies need to update how they bill both patients and providers.
“It’s driven around the inadequate system,” Angela Miles, head of revenue cycle at Carbon Health, told Business Insider. “We need to rebuild that from a payer standpoint to get to a more modern standpoint.”
More complexity leads to increased costs
Startups like Oscar Health are already attempting to bring insurance companies into a more modern model, Bali said, but larger companies have yet to shift in a meaningful way.
Those that do change, albeit in a more superficial way, actually make the problem worse by making it even more complicated, Bali said, because the added complexity adds time, which adds costs.
“A lot of work that goes towards decreasing healthcare costs is making the system more complicated,” Bali said. “My theory is that things that drive increased cost in healthcare is due to increasing complexity because you can’t be transparent and compete on price.”SEE ALSO: The founder of a healthcare venture fund that just raised $200 million shares why she wants to back founders that are building businesses for their communities
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The founder of a healthcare venture fund that just raised $200 million shares why she wants to back founders that are building businesses for their communities

Summary List PlacementOne of digital health’s only early-stage venture firms just raised a fresh tranche of funding to help the youngest startups get off the ground during a pivotal year for the industry.
Define Ventures raised $200 million for its latest fund, the second since it was founded by ex-Kleiner Perkins investor Lynne Chou O’Keefe in 2018.
The early-stage firm will continue making new investments in companies in the incubation stage all the way up to Series B, Chou O’Keefe told Business Insider.
The new fund’s timing, coming after a record-setting year of private investment in healthcare startups, was purely coincidental and on track with the typical two-year fundraising cycle at most firms, she said.
“We’ve had well-timed investment cycles,” Chou O’Keefe said “But the activity has increased, overall, post-COVID.”
Read more: A former Kleiner Perkins investor is staking out the future of digital health. Here’s why she just made an early bet on an in-home care startup founded by a former Uber exec.
Define wants to back early startups rebuilding the healthcare system with patients at its center
Chou O’Keefe said she anticipated keeping up the pace in 2021, writing more checks to companies she believes are reimagining what it’s like to be a healthcare patient in the United States. In Define’s first $87 million fund, she backed a wide range of digital health startups, including LGBTQIA+ primary care startup Folx and in-home care provider MedArrive.
She said to expect more of the same coming from Fund II, with consumer-focused healthcare startups taking center stage over other companies that want to sell services to hospitals or insurance companies. The firm’s thesis formed around backing companies that use technology to reimagine the patient’s experience of healthcare was successful enough in Fund I to earn a vote of confidence in Fund II, Chou O’Keefe said.
“We haven’t seen our strategy shifted, it’s more that the time to market has really shortened,” Chou O’Keefe said. 
In practice, the consumerization of healthcare Chou O’Keefe wants to back varies widely. It can look like Dawnlight, a startup that makes remote monitoring products that track fall risks, among other specialties. It can also look like Lightship, a startup that runs decentralized clinical trials that are easy for participants and researchers to use. All these startups, however, share the unique challenge of marketing to regular patients instead of working directly with hospitals, doctors, or insurance companies.
“The make-or-break of digital health is the commercial side of the business,” Chou O’Keefe said. “That’s something that is so critical, and when I started Define the lack of sector-focused early-stage players was a window of opportunity for us because these entrepreneurs need help to build. It takes a village to change healthcare for all of us.”
Chou O’Keefe is betting that founders want to build for their own communities
Chou O’Keefe will write checks from $1 million all the way up to $15 million, depending on the company’s needs. As a former Livongo board member and current Hims board member, she said Define can lead funding rounds that require the active board support, but ultimately leaves that decision to the entrepreneur. 
“Entrepreneurs recognize the oil from water here,” Chou O’Keefe said. “There are people that can partner with you and build these companies with you, but the lessons learned from tech don’t apply in the healthcare space.”
Her investment strategy is in part a bet on authentic founders, she said.
She is particularly interested in supporting the entrepreneurs that are building solutions for their own communities because that perspective can be a differentiating factor that contributes to a company’s success.
Of Define’s 12 portfolio companies, four are founded and led by women, one of the many communities Chou O’Keefe feels has been left out of high-level healthcare business decisions in the past.
“It’s important we have women founders and CEOs in this space because we make the decisions, and it’s really the right business decision as well,” Chou O’Keefe said.SEE ALSO: The 26 billion-dollar startups to watch that are revolutionizing healthcare in 2021
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