General Catalyst-backed Commure to buy Augmedix in $139M deal

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Source: Modern Healthcare
Author: Gabriel Perna
Date: July 19, 2024

Health data platform company Commure plans to buy ambient artificial intelligence documentation company Augmedix, the companies said Friday.

Under the all-cash, $139 million deal, Augmedix shareholders would receive $2.35 per share. The deal, which includes the assumption of debt, is expected to close in the fall.

Commure CEO Tanay Tendon said he always has been a fan of Augmedix. The two companies were connected through a common customer in Nashville-based HCA Healthcare. The companies were working on adjacent projects at the health system and realized they could do more by working together.

“We wanted to work together initially as partners, and then over time, we realized that you can actually bring these two missions together in a more concrete way,” Tandon said. 

An acquisition would mean Augmedix, which had an initial public offering in November 2021, no longer would be publicly held. Augmedix CEO Manny Krakaris would continue to lead the company, which would become a subsidiary of Commure. 

Health systems are increasingly buying ambient AI documentation solutions, technology that takes a recording of a doctor-patient conversation and turns it into usable clinical notes.  

Commure, which provides AI and other digital health tools to health systems on its platform, would offer Augmedix’s documentation tool as part of its larger offering to customers. An acquisition also would allow Commure to offer AI documentation tools for revenue cycle management and other tasks, Krakaris said.

“A lot of health systems are trying to consolidate the number of vendors that they have to work with, because it's an administrative headache for them,” Krakaris said. “And this kind of plays into that into that trend.”

Augmedix posted a net loss of $19.2 million, or 44 cents per share, in 2023, according to a regulatory filing. 

Commure acquired digital health company Athelas in October to form a $6 billion company. Commure is backed by venture capital firm General Catalyst and works with health systems in the venture capital firm’s health assurance network, Tandon said.

It has received approximately $620 million in funding from General Catalyst and other investors, according to venture capital database company Crunchbase.

A spokesperson for Commure declined to disclose its annual revenue.