Datavant, the $7.5 billion healthcare data unicorn, is ramping up its acquisition strategy as it positions itself for a potential IPO in the coming years. CEO Kyle Armbrester revealed exclusively to Business Insider that the company plans to complete “one or two” more acquisitions in early 2025, continuing an aggressive M&A streak that has seen 11 deals since 2017.
The healthcare data startup, which manages patient data exchanges between providers, payers, and life sciences organizations, has been particularly active recently. In September 2024, Datavant acquired data privacy organization Trace Data and two data analytics products from healthcare AI startup Apixio, signaling its commitment to expanding its AI and analytics capabilities.
With “well over” $1 billion in revenue and steady profitability, Datavant expects to fund these acquisitions using cash from its balance sheet, according to Armbrester. The company hasn’t publicly announced funding since its $7 billion merger with Ciox Health in 2021, with private equity firm New Mountain Capital serving as its controlling shareholder.
The timing of this M&A activity aligns with broader industry trends. Flare Capital Partners’ Parth Desai predicted that private-equity-backed healthcare companies would pursue tuck-in acquisitions in 2025 as they prepare for potential IPOs in 2026. While Armbrester didn’t commit to a specific IPO timeline, he acknowledged that “if market conditions are right, and there’s a need for cash to continue to grow the business, that’s great.”
The explosion of AI in healthcare has been a major catalyst for Datavant’s growth. As advanced AI models require massive amounts of data for training, demand for digitized healthcare data has skyrocketed. Armbrester noted that “there’s been a pretty rapid pace of digitization of a lot of manual workflows in healthcare, and we’ve been a benefactor of that.” Today, Datavant works with more than 70,000 hospitals and clinics.
For its 2025 acquisitions, Datavant is specifically targeting companies building technology for healthcare providers and life sciences organizations, with a focus on products that have existing market traction. Armbrester emphasized the company’s ability to leverage AI and analytics: “We’re large and diversified, and I think we’re in a really good space to take a smaller smarter and apply their logic or artificial intelligence or analytics across that vast network to see a lot of benefit.”
Armbrester’s leadership credentials strengthen Datavant’s IPO prospects. He previously led Signify Health through its 2021 IPO and its subsequent $8 billion acquisition by CVS Health in 2023, demonstrating proven experience in taking healthcare companies public.
Key Quotes
There’s been a pretty rapid pace of digitization of a lot of manual workflows in healthcare, and we’ve been a benefactor of that.
CEO Kyle Armbrester explained how AI-driven demand for healthcare data has fueled Datavant’s growth, highlighting the company’s position as a key beneficiary of the AI boom in healthcare.
We’re large and diversified, and I think we’re in a really good space to take a smaller smarter and apply their logic or artificial intelligence or analytics across that vast network to see a lot of benefit.
Armbrester outlined Datavant’s acquisition strategy, emphasizing how the company plans to leverage AI and analytics from smaller companies across its extensive network of 70,000+ hospitals and clinics.
If market conditions are right, and there’s a need for cash to continue to grow the business, that’s great. But there’s no drop dead date.
The CEO addressed IPO timing, indicating flexibility while acknowledging that Datavant’s scale and profitability position it well for a potential public market debut when conditions align.
Our Take
Datavant’s story exemplifies a crucial trend in the AI economy: the companies building the infrastructure for AI may mature faster than many AI application companies themselves. While countless AI startups struggle with monetization, Datavant has achieved over $1 billion in revenue by solving a fundamental problem—providing the massive datasets AI models need to function.
The company’s acquisition of AI analytics products from Apixio and its explicit focus on applying “artificial intelligence or analytics” across its network reveals a strategic evolution from data plumbing to AI-powered insights. This positions Datavant not just as a data intermediary, but as an AI platform company that can leverage its unique data assets to deliver intelligence at scale.
Armbrester’s proven IPO track record with Signify Health adds credibility to Datavant’s public market ambitions. If successful, this IPO could signal that AI infrastructure and data companies represent the most viable path to public markets in the current AI wave, potentially ahead of many high-profile generative AI startups still seeking sustainable business models.
Why This Matters
This story highlights the critical intersection of AI technology and healthcare data infrastructure, revealing how AI’s explosive growth is creating massive opportunities in the healthcare data sector. Datavant’s aggressive acquisition strategy and billion-dollar revenue demonstrate that companies facilitating AI development through data management are becoming increasingly valuable.
The healthcare industry’s AI transformation requires vast amounts of high-quality patient data to train models effectively. Datavant’s position as a data intermediary makes it a crucial enabler of healthcare AI innovation, from clinical research to population health analytics. The company’s acquisition of AI-focused products from Apixio and its emphasis on applying “artificial intelligence or analytics” across its network shows how traditional data companies are evolving into AI-powered platforms.
For the broader AI ecosystem, this signals that infrastructure companies supporting AI development may be among the first to reach IPO maturity in the current market cycle. With over $1 billion in revenue and profitability, Datavant represents a new class of AI-adjacent companies that have achieved sustainable business models by solving the fundamental data challenges that AI applications require. This could pave the way for other AI infrastructure companies to pursue public markets in 2025-2026.
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Source: https://www.businessinsider.com/what-unicorn-datavant-looking-for-healthcare-acquisition-2025-1