Indeed, Alphabet Inc.’s life sciences unit, which experimented with diabetes-detecting contact lenses and launched Covid-19 testing programs, said it raised $1 billion in new investment led by the parent company, padding its war chest as the health-tech market heats up. up.
As part of Friday’s announcement, Verily also said two executives would leave their positions at the company. Founder and longtime CEO Andy Conrad will become executive chairman, and Verily’s current president, Stephen Gillett, will step into the role of CEO in January. Chief Financial Officer Deepak Ahuja is leaving “for another opportunity.”
The capital infusion will be used to support the company’s efforts in data platforms, research and technology aimed at making healthcare more individualized, Verily said. The company will also consider further investments in strategic partnerships and potential acquisitions. Indeed said the new roles are part of succession planning as the company becomes more operationally and commercially focused.
Verily, formerly Google Life Sciences, was a division of the company’s semi-secret research and development group called Google X until it split off as an independent subsidiary of Alphabet in 2015.
The infusion of cash prepares Verily to better compete as dealmaking in the health-tech arena accelerates, said Daniel Ives, an analyst at Wedbush Securities. In July, Amazon said it would acquire the One Medical chain of clinics in an all-cash deal valued at $3.49 billion.
“It’s an arms race with Amazon, Apple, Microsoft and other tech stalwarts building their strategic partnerships and muscle in healthcare,” Ives said. “I see that billion dollars of capital as dry powder just to do more M&A and really go more into investment mode at a time when it’s crucial 12 to 18 months ahead.”
Alphabet is working to push its Other Bets businesses toward profitability. The group recorded an operating loss of around $5.3 billion last year. The development at Verily reflects a restructuring of Alphabet’s self-driving car unit, Waymo, that took place last year and could pave the way for a divestment, Bloomberg Intelligence analysts wrote in a note after the announcement.
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