Olive AI plans to sell health assets to sibling company, clients depart
Sections
Axios Local
Axios gets you smarter faster with news & information that matters
About
Subscribe
Scoop Health startup Olive AI plans asset sale as clients depart
, author of Illustration: Sarah Grillo/AxiosExit Content Preview Health care automation startup Olive AI intends to sell a significant portion of its products and services to sibling company Rotera, per current and former employees and documents seen by Axios. Why it matters: Once considered the darling of health system automation, Olive's had a difficult year about its software's efficacy and executive departures. The divest to Rotera would effectively eliminate Olive's health systems product line, which represents 15-30% of its overall business.The assets for sale include Olive's tools for population health management and those for the 340B program, which mandates drug discounts for Medicaid and Medicare. Yes, and: Ten of Olive's health system customers gave notice between July and October that they would either terminate or not renew their Olive contracts. Departing customers include SureScripts, HMS Holdings Corp and TransUnion, according to the sources and additional documents seen by Axios. Per previous , Olive had roughly 80 health system customers in April. (The company has repeatedly told Axios it has 200 customers.) Details: In documents seen by Axios, Olive outlined plans to sell the assets to Rotera in exchange for a share of its revenue. The share amount could not be learned.The sale would impact seven of Olive's customers including Essentia Health, Gundersen Health System, Premier Health and TriHealth, per the documents and sources.Rotera, a health automation startup built out of Olive Ventures (the company's venture arm), has previously partnered with Olive. Its CEO and founder is a former Olive VP. Catch up fast: In the summer of 2021, Olive collected $400 million in Series H funding in a round led by Vista Equity Partners and joined by Intermountain Ventures, Tiger Global, Base10 Partners and other undisclosed investors.Axios in April alleging Olive — valued at $4 billion— promises to save hospitals millions of dollars with its software but the tools don't deliver, based on documents and interviews with 16 people.In July, Olive CEO Sean Lane announced in a company-wide email the company would by narrowing its offerings. The company also laid off 450 people that month.Last month, Olive , the company later confirmed to Axios. What they're saying: An Olive spokesperson told Axios in an email the customer departures are not surprising given the company's recent . They did not respond to questions about the planned asset sale."As with any business transformation, we expected to see customer attrition, specifically from customers whose needs no longer align with Olive’s product roadmap," they said. Go deeper