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Healthcare M&A Update: A Conversation with the Founder of Martis Capital

What began as an ordinary, pre-med student journey quickly evolved into a career in healthcare M&A for Nebraska-native, Barry Uphoff.  

After earning his MBA, co-founding and taking a consulting firm public, and leading the private equity and credit portfolio of the family office of eBay co-founder, Jeff Skoll, Barry began his own investment firm, Martis Capital. Fast forward a few years, and Martis Capital is now a leading healthcare-focused PE firm investing out of its third fund. 

Axial CEO, Peter Lehrman, recently sat down with Barry to discuss the current state of healthcare M&A. They also took a deep dive into the Martis portfolio to understand some of the firm’s investment themes and particular areas of interest.


Show Notes 

Introduction 00:00 – 2:40

  • Martis has been around for a decade and now has offices in San Francisco and Washington D.C.
  • Focus on three main areas within healthcare: healthcare services, healthcare IT, and healthcare products/consumer applications
  • Enterprise values of up to $250MM
  • Prefer to work with founder-led businesses 

Barry’s background + the beginning of Martis 2:40

  • Barry grew up in Nebraska, wanted to be a physician, and he went to Johns Hopkins on the medical track
  • After being accepted to medical school, Barry had the opportunity to go do a program in England for a couple of years that was actually law-focused
  • When he was there, Barry began to work with a few folks in healthcare who were more business oriented, and he came to the conclusion that he could have more of an impact if he focused on the business side of things rather than being a practitioner
  • Barry then went to The University of Chicago for his MBA rather than going to medical school
  • Started his career at Booz Allen Hamilton before he co-founded a consulting firm called Diamond Technology Partners
  • The consulting firm IPO’d in the late 90s and Barry then started his investing career with Trivest Partners 
  • Jeff Skoll — former president of eBay — was the biggest investor in the healthcare fund
  • After the second fund, the firm registered with the SEC and officially became Martis Capital for the third fund
  • The first healthcare investments were done directly off of Jeff’s balance sheet in the midst of the financial crisis from 2007-2010, and then fund I officially launched in late 2011/early 2012
  • Today Martis is investing out of fund III, which was raised & closed in 2019

The Healthcare sector macro snapshot 11:25

  • In March of 2020 when things began shutting down, no one expected the country to be closed for nearly as long as it was; the night that the NBA cancelled its season, a group of Barry’s colleagues were all together, and not one of them thought this would go on past June 2020
  • Fast forward to the summer, when another group of healthcare-focused professionals gathered with Barry and then asked how long things would continue, about ⅓ of the group said 2021, ⅓ of the group said 2022, and the last ⅓ of the group said they weren’t sure if we’d ever create a vaccine or fully return to normal
  • Both of those anecdotes show what uncharted territories we were in; we’d never seen a healthcare crisis like this and no one knew what to make of it
  • Now everyone sees the light at the end of the tunnel; things are opening up, jobs are returning very quickly

Remote versus in-person in today’s market 15:20

  • Martis is travelling again (everyone is vaccinated) 
  • Last Thursday — before Memorial Day weekend — the Detroit airport was as busy as Barry has seen it
  • Martis has always had a bi-coastal presence, so they were already fairly well-versed in using a lot of the digital tools to communicate across offices
  • Martis sold a fair number of companies in Q4 of 2020 and returned more capital than they ever have as a firm
  • New investments were a little bit slower, but they are getting done
  • Barry hosted multiple recruiting meetings for potential CEOs for Martis portcos in Lake Tahoe during COVID; they’d do socially-distanced walks & hikes 
  • In November/December of 2020, when people had more foresight into vaccines and also saw some potential changes in tax codes, things started getting very busy
  • A lot of that activity has just continued into 2021, especially since certain tax changes are even more imminent now

The labor shortage across industries 21:10

  • The labor supply shortage isn’t just occurring in the healthcare category, it’s also happening across QofE and other diligence providers as well as in investment banking
  • There is such a build up of supply and deals that that didn’t get done last year, plus the looming tax changes, and now there are so many deals that need to get done

Martis investment themes & areas of interest (pre- and post-COVID) 22:20

  • “Aging in place” – home health & hospice has developed a tremendous amount during COVID because hospitals were trying to keep as many beds available as possible 
  • Telehealth also accelerated extremely quickly due to COVID
  • Prior to COVID, aging in place (living our your last days/weeks/years in your home versus in a dedicated facility) was already a trend that was happening before COVID
  • Hospice statistics in the U.S. lag behind Europe, so pre-COVID, Martis saw this as a growth area
  • Technology was not only a huge thing in terms of delivering care directly into the home, but there were also huge administrative advancements made during COVID
  • An example: a physician used to have to physically sign off on treatment, and COVID made that extremely difficult, so DocuSign and the like became acceptable and really sped up processes
  • FaceTime/video conferencing also was allowed in many situations during COVID
  • Coming out of COVID, the telehealth trend is continuing, and the shift to digital is likely permanent in a lot of instances
  • Patients are now getting used to this type of digital service
  • The technology will (and needs to) continue to improve and enable the shift
  • Reimbursement also needs to fit into this process seamlessly in order for it to work
  • The three things you need working together: the patient, the provider, and the payment

The Martis portfolio: ShareMD 30:15

  • Martis has a real-estate centric buy-and-build business that serves medical providers that they acquired in 2019
  • Real estate has gotten written off over the past 18 months (at least as the public markets were concerned), but the private market has a lot more flexibility, and ShareMD excelled during COVID
  • John Bardis, who Barry has known for 7+ years, is the CEO of ShareMD
  • Martis came across a very early-stage business — it was only a physician and a real-estate professional — who owned a few properties just north of San Diego, which is a strong-demand area for healthcare
  • They had a vision of providing flexible office space to physicians (that they could use as satellite offices), but having it be more patient-centric by providing ancillary healthcare services all in the same building (lab, pharmacy, imaging, etc.)
  • Hospitals historically have evolved in the heart of cities, but medical professionals (and patients) don’t necessarily live in those areas, so the idea was to bring convenient facilities to the fastest-growing areas
  • John was introduced into the mix very early, and Martis provided capital to expand outside of the initial Encinitas, CA area
  • They chose to expand into markets where there was a lot of growth opportunity; pre-pandemic they expanded to Florida (first in Jacksonville, then Miami, then Naples)
  • As COVID was introduced into the mix, Martis kept a close eye on the business because of the office space component, but they did very well
  • Part of this was because of the markets they were in; Florida in particular had a lot of migration
  • Another thing was that lot of doctors (and patients) were looking to get outside of the traditional hospitals where COVID patients were being treated
  • Additionally, on the technology front, ShareMD started enabling telehealth and digital communication tools to make the patient experience smoother
  • The business is not doing a lot of retrofitting when they buy the real-estate; they’re looking for existing medical offices that they can get at a good price so they don’t have to do much work
  • Because they’re not a REIT, they have the ability to be more strategic with their dollars

A deeper dive into ShareMD’s management 43:15

  • John Bardis’ background is in revenue cycle management with healthcare providers
  • When ShareMD enters into a market, they are ultimately trying to help fill gaps for healthcare providers, and John had the ability out of the gate to have the conversations to see where the real need was for communities
  • The real-estate professional had a history in both the California and Florida real estate markets (specifically dealing with medical offices), and he was very scrappy and knew where to look
  • The third piece of the puzzle was having a physician who was able to talk to the healthcare providers, medical professional to medical professional
  • All three of these people had very different skill sets, but they were all necessary; they were the “three legs to the stool”

The importance of being a founder-led business 46:25

  • Martis focuses mainly on founder-led businesses, which is not necessarily important to all investment firms
  • The reason they like this is first and foremost because of alignment
  • Second, is because they know the business extremely well; they’re aware of any skeletons 
  • If a founder is willing to keep their money in the business, it means they believe in the business, they just need help
  • If a business has a great leader who isn’t a founder — or it’s a great business that isn’t run by the founder — but then Martis would create an option pool that is aligned with the value of the company
  • Martis would rather create a larger option pool than many others would create, because it comes back to alignment

You can reach Barry and his team via the contact info that can be found at

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