Digital health and Fintech face pressure to be profitable

Hi there! Dan DeFrancesco in NYC, but more specifically, I’ll be at the Fintech Nexus conference today with my colleague Paige Hagy. Come say hello if you see me. Just mention the newsletter so I know you’re one of the good ones.

Today, we’ve got stories about why Janet Yellen is freaking out over the debt ceiling, AI tools that will make you more productive at work, and the best things to buy at Costco, according to a food critic.

But first, take two of these and call me in the morning.

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1. The doctors [bankers] am in.

A tech-focused part of an industry facing setbacks after a few monster years is ready to make some deals.

No, I’m not talking about fintech.

Digital health, once the darling of healthcare, is struggling. After a pandemic-driven increase when healthcare services and offers that use technology were prioritized, digital health has returned to earth.

But the decline in the market is not terminal… at least not for the entire industry.

Insiders Blake Dodge, Shelby Livingston, Rebecca Torrence and Yeji Jesse Lee spoke with 16 of the top healthcare bankers and dealmakers to get predictions about the future of digital health.

In short, there are deals to be made.

It’s obviously in a dealmaker’s interest to push back on M&A, but the bankers Insider spoke to provided a thoughtful, nuanced perspective on where the industry wants, and doesn’t want, to see activity.

The similarities between digital health and fintech are striking. Startups in both areas are leveraging technology to upgrade established, streamlined services and improve the overall customer experience. They also do it where the stakes are high: health and money.

Of course, it’s not just out of goodness in their hearts. The “tech” part of their strategy, they claim, gives them a higher valuation than would traditionally be assessed for companies in their respective areas.

It’s a pitch that, while initially successful, has fallen flat as investors scrutinize startups for signs of profitability. In some cases, digital health startups have moved from going direct to consumers to selling to businesses. They have even jumped on the generative AI bandwagon.

For both fintechs and digital health, this year has served as a reminder that they are only part technology companies. They still exist in industries that rely heavily on fundamentals. And ideas, no matter how big and ambitious they are, must ultimately be tied to kroner and øre.

Click here for predictions from 16 bankers and retailers on the future of digital health.

In other news:

2. We are now at the “catastrophic” threat level of US debt default. Treasury Secretary Janet Yellen didn’t mince words when she described the impact of not raising the debt ceiling. Here’s why she’s so worried. For more on a potential standard, check out my colleague Phil Rosen’s work on the 10 Things Before the Opening Bell newsletter.

3. Credit card fees are getting extra attention from regulators. Senator Elizabeth Warren asked the major credit card companies how much they make from these pesky late fees. It’s the latest criticism of card companies’ late fees, which cost Americans billions of dollars each year. More on how regulators want to change that.

4. Work harder. Be smarter. Unimpressed by the corporate grin, Gen Z takes matters into their own hands. The young generation is reselling Amazon, investing in crypto, and working content creation jobs, all to avoid a traditional 9-to-5 job. Meet the page mass generation.

5. AI tools you can use at work. If you’re looking to get on the AI ​​bandwagon, here’s a helpful guide. These 10 AI-powered tools can do everything from writing emails to building slideshows. So read this and get started on being able to avoid working.

6. Vanguard makes billions of dollars in the most Vanguard way possible. It’s not sexy or exciting, but the giant asset manager’s bond indexing business has made money for the firm, Bloomberg reports. Here’s how the sleepy business yields big returns.

7. Even banks hate handling your paper checks. The old payment method remains ripe for fraud, and banks sometimes struggle to replace victims quickly, reports The Wall Street Journal. Which begs the question: Why are we still paying with these things?

8. This luxury Swiss watchmaker went from obscurity to a one-year waiting list. Parmigiani Fleurier, which sounds like a dish my grandmother used to make for me, has exploded onto the bell scene seemingly overnight, Bloomberg reports. Here’s how a new CEO, and a single line of watches, turned things around.

9. The exclusive all-inclusive resort. Long considered a place to get cheap booze and mediocre food, some all-inclusive resorts are catering to a more luxurious crowd, The New York Times reports. Release the spring breakers and check out these exclusive resorts.

10. A critic goes to Costco. Don’t worry, this is not a criticism of our beloved Costco. Instead, a food critic shares the 12 things she loves to buy at the store. Add these to your next grocery list.

Curated by Dan DeFrancesco in New York. Feedback or tips? Email [email protected], tweet @dandefrancesco, or connect on LinkedIn. Edited by Jeffrey Cane (tweet @jeffrey_cane) in New York and Hallam Bullock (tweet @hallam_bullock) in London.