The health technology sector has seen extraordinary enthusiasm among private and public investors this year. In 2021, investments have so far totaled $23.8 billion, nearly tripling 2019’s tally, according to a Deloitte analysis. And more than two dozen companies began trading on public markets, capitalizing on sky-high valuations and the continuing popularity of the blank-check IPO.
But cracks are beginning to show in the industry’s foundation, including those companies whose performance is now subject to the scrutiny of public investors. Among health tech companies that went public in 2021 — both through SPAC mergers and traditional IPOs — stock prices have fallen an average of roughly 45% since the close of their first day of trading.
Some of those dives have been a direct response to emerging evidence of turmoil behind the scenes. Talkspace, the virtual behavioral health company that provides therapy via text and video chat, saw both its co-founders and its chief operating officer depart less than five months after going public in a merger valued at $1.4 billion. The company’s price had already been chopped in half since trading began; since the leadership announcements, it has dropped even further, down to a market capitalization of about $300 million.
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