Boston-based Bain Capital is propelling a local health-technology firm to the next growth level with a majority investment.
Bain is taking stake in LeanTaaS, a software company that uses artificial intelligence to manage availability for hospital beds, operating rooms and chemotherapy infusion centers with its iQueue platforms. Founded in 2010, LeanTaaS works with more than 500 hospitals and 130 health systems across the United States. Big local clients include Atrium Health (plus partner Wake Forest Baptist) and Novant Health.
Mohan Giridharadas, CEO and founder at LeanTaaS, said Bain first approached the company a couple of years ago, but the timing wasn't right. More recently, LeanTaaS felt ready for its largest transaction to date.
"We are very pleased with where this has ended up. ... This time, the timing was right because we've grown a lot," Giridharadas said. "We've got many, many lines of growth in front of us that we could now pursue much more aggressively given this investment from Bain Capital."
Financial details of the deal were not disclosed. It is expected to close in the third quarter.
Even with Covid, LeanTaaS is growing annual contract value by at least 40% each year. It plans to stay on that trajectory. The firm also plans to hire more employees in its two key markets — Charlotte and Santa Clara, California — plus remote positions, Giridharadas said. He declined to share any hiring targets.
Bain will hold a majority position on the LeanTaaS board and will be involved in strategy moving forward. However, the leadership team for day-to-day operations will remain as is, Giridharadas said. Insight Partners and Goldman Sachs are also stakeholders.
He said, with the investment, LeanTaaS wants to enhance its current products and invest in other areas, such as ambulatory care. It has proofs of concept for systems in imaging and phlebotomy labs. The surgery process also presents additional opportunities, with many steps between scheduling a surgery and post-operation recovery. LeanTaaS' technology could evolve to address more of those steps.
Paul Moskowitz, a principal at Bain Capital Private Equity, described LeanTaaS as "an exceptionally high-quality business."
"The company delivers a compelling value proposition to the entire care ecosystem. Second, the company is the clear leader in its space, having created its category, with a very large whitespace market penetration opportunity," Moskowitz said via email.
He said LeanTaaS' mission aligns with Bain's efforts to invest in companies that improve cost, quality and access in health care. Bain's private equity arm has made primary or add-on investments in more than 1,000 companies across multiple industries. Some of its other health-care investments include AthenaHealth, HCA Healthcare, Waystar and IQVIA.
LeanTaaS will not waver from its health-care focus, Giridharadas said. It started as a multi-industry company but later honed its expertise. The firm wants to be "air traffic control" for care delivery, he said. Its technology is built to scale, following infrastructure investments made years ago. Covid-19 has also increased awareness about where health systems need more efficiency and why it could be beneficial to look for third-party help, he said.
"We believe that the operational sophistication of health care is at least a decade behind the clinical sophistication of health care," Giridharadas said. "That's a big ... mission, and we don't see the need to either get distracted by going outside of health care or get distracted by going outside the United States."
William Blair is financial adviser to LeanTaaS. Willkie Farr & Gallagher LLP is legal counsel. Evercore is financial adviser to Bain Capital Private Equity. Kirkland & Ellis LLP is legal counsel.
