New Harbor Capital has made an equity investment in IndeVets, a tech-enabled provider of veterinarian staffing services.
IndeVets uses its proprietary scheduling technology to provide staffing services to veterinary hospitals. Through its scheduling platform, the company’s veterinarians – IndeVets currently has more than a hundred veterinarians that are IRS Form W-2 employees – have full flexibility in choosing when and where they work across its network of over 1,300 veterinary hospitals. IndeVets is based in Philadelphia and was founded in 2017 by CEO Michael Raphael.
New Harbor invested in IndeVets based on its strong value proposition to its partner hospitals, its technology-enabled services and proprietary software, experienced senior management team, and the positive industry trends within the animal health market.
New Harbor has prior experience investing in the animal health sector. In June 2016, the firm acquired New Jersey-based Wedgewood Pharmacy, one of the largest veterinary drug compounders in the United States. After a 4.5 year hold, and a tripling of revenue, the firm sold Wedgewood to Partners Group, a large Switzerland-headquartered investment firm.
After its exit of Wedgewood, New Harbor sharpened it animal health and wellness investment thesis to focus on companies that provide services to veterinary clinics rather than participating in the highly competitive veterinary clinic consolidation strategy.
According to New Harbor, the United States veterinary services market is estimated at $50 billion and is growing at about 3% to 4% per year. Driving this growth is the “humanization of animals” trend of consumers spending more money on their pets, pets living longer, and modest increases in the pet population. The largest challenge facing the veterinary industry today is a growing imbalance between the demand for veterinary services and the supply of veterinarians, with the number of available jobs outstripping total applicants on a five-to-one ratio. This supply-demand imbalance is furthering the need for institutionalized staffing solutions for veterinarians as hospitals struggle to hire and maintain quality talent.
“We are thrilled about this partnership potential,” said Mr. Raphael. “New Harbor’s track record of scaling animal health and provider-centric companies will be extremely valuable as we expand IndeVets’ reach to new markets and help even more veterinarians reach their utmost potential.”
“We look forward to partnering with the IndeVets team,” said Jocelyn Stanley, a partner at New Harbor. “Their work sits at the unique intersection of animal health and tech-enabled services, which is in great alignment with our firm’s focus areas. New Harbor also has a long track record of partnering with clinician-centric healthcare businesses and IndeVets’ ‘vets first’ approach is unmatched in the industry. The company has incredible growth opportunities, and we look forward to helping them continue to expand and innovate.”
Chicago-based New Harbor invests from $10 million to $40 million of equity in education, healthcare, and tech-enabled services companies that have from $3 million to $15 million of EBITDA. In February 2021, after just three months of fundraising, New Harbor held a hard cap close of its third private equity fund, New Harbor Capital Fund III LP, with $362 million of capital.
New Harbor was co-founded in February 2013 by Tom Formolo and Ed Lhee, long-time partners at CHS Capital.
© 2021 Private Equity Professional | December 16, 2021
