One of the largest private equity and alternative investment firms in the world just bought a majority stake of a promising healthcare software company. News broke on Monday afternoon that Blackstone Group (BX) will become the majority owner of HealthEdge, a healthcare software developer for health insurers.
HealthEdge develops a cloud-based software platform that helps health insurers keep track of their plans, enroll participants, and handle other administrative tasks. The company's revenue grew by 30% in 2019 compared with last year, while its customer base has risen by 25%. Although the full details of the transaction weren't disclosed, one person close to the matter said this deal puts HealthEdge's value at around $700 million.
While Blackstone has made deals in the tech sector before, healthcare is an area that the private-equity giant has less experience in. Other recent Blackstone acquisitions include a deal in November to acquire a majority stake in MagicLab, the maker of dating app Bumble, for around $3 billion.
Are further healthcare investments on the horizon?
Back in January, news broke that Blackstone had raised three-quarters of the $4.6 billion target it set for a new life science sector investment fund. This would be one of the largest funds in this sector, a testament to the appeal of the high-growth, high-risk nature of the healthcare and biotech markets.