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$200 million deal by private-equity firm is latest sign investors see opportunity in the health-services sector

By Melanie Evans
Sept. 12, 2018 12:03 a.m. ET

Private-equity firm General Atlantic has agreed to invest $200 million in a startup that aims to manage independent cancer-treatment clinics, the latest sign investors see opportunity in the health-services sector.

The investment makes General Atlantic the majority owner of OneOncology, a startup that launched this month. Its founders, three cancer-treatment practices in Tennessee and New York, are the other owners and its first customers.

OneOncology, based in Nashville, Tenn., aims to address the challenges the practices face managing their operations, navigating patient insurance reimbursement, adopting information technology and negotiating drug-purchase contracts by taking over the administrative work.

Independent physician practices also often lack the capital needed to keep up with mounting costs for delivering cancer care and installing electronic record-keeping systems. Yet they can generate profits if administered the right way.

The heavy capital needs and high profit potential has driven hospital consolidation, said Jeff Vacirca, a OneOncology director who is chief executive of New York Cancer & Blood Specialists, a cancer-treatment group that is one of the startup’s owners.

Better-capitalized hospitals have been buying up the cancer-doctor practices, and businesses such as McKesson Corp.’s US Oncology unit are getting paid to run them.

OneOncology aims to provide an alternative to the other suitors, according to board members. The startup plans to acquire the assets of additional cancer practices, hire their nonclinical employees and use its heft to negotiate better terms for business services.

In return, the practices it acquires will receive an ownership stake in OneOncology.

“We need to bring scale, better economics to these practices,” Dr. Vacirca said.

Health-care services has emerged as an attractive investor target. At nearly $2 billion in the first six months of the year, investment in the sector has surged toward the 2015 high of $2.61 billion, Dow Jones VentureSource data show.

General Atlantic, of New York, invested earlier this year in Landmark Health LLC, which takes care of chronically ill patients at their homes.

The private-equity firm takes stakes in companies with the potential for strong growth, and sees high demand for cancer care given the prevalence of the disease and complexity of its treatment, said General Atlantic Principal David Caluori.

OneOncology will look to grow in part by financing consolidation of cancer-doctor practices, according to executives involved in the effort.

Write to Melanie Evans at

Appeared in the September 12, 2018, print edition as ‘Cancer-Clinic Startup Attracts $200 Million Health Startup Lures General Atlantic Cash.’