At the end of October, WELLSTAR Technologies, a majority-owned subsidiary of WELL Health Technologies Corp., announced an approximately C$62 million Series B preferred share investment at C$1.50 per share, expected to close in early December 2025. On November 20th, WELL announced that it achieved quarterly revenue of over $110 million as part of its Canadian Patient Services business, reflecting growth of 41% on a YoY basis.
Key Points
- WELLSTAR secured C$62 million in Series B financing at C$1.50 per share from three Canadian institutional investors: Mawer Investment Management, Edgepoint Wealth Management, and PICTON Investments, plus approximately C$3 million from WELLSTAR and WELL management teams. The financing builds on a C$50.4 million Series A round at C$1.00 per share completed in December 2024 with Mawer and Edgepoint.
- The company describes itself as a SaaS healthcare technology provider serving over 40,000 providers across Canada with practice management software and digital transformation tools. WELLSTAR is part of WELL Health Technologies, which operates over 200 healthcare clinics in Canada.
- WELLSTAR aims to complete a public listing in 2026 through an IPO, reverse takeover, or alternative liquidity transaction. The Series B Shares will automatically convert into subordinate voting shares upon a qualifying public transaction.
- The Series B Shares include redemption rights exercisable by holders after December 31, 2026, and will not accrue dividends until 2026, after which dividends accrue as notional preferred shares at increasing rates over time. WELL Health plans to maintain majority economic and voting control of WELLSTAR following the transaction.
- The company plans to use proceeds for future acquisitions, AI-related innovation, organic growth initiatives, and general corporate purposes, though specific allocation amounts were not disclosed.
The financing is designed to provide capital for WELLSTAR’s expansion as it separates from WELL’s clinical operations to become an independent healthcare technology company focused on the Canadian market.
The Data
- Series B financing totals approximately C$62 million at C$1.50 per share, with C$59 million from institutional investors and approximately C$3 million from management teams.
- The company previously raised C$50.4 million in Series A financing at C$1.00 per share in December 2024, representing a 50% price increase between rounds within approximately one year.
- WELLSTAR reports serving over 40,000 healthcare providers across Canada, though the press release does not specify revenue figures, profitability metrics, or growth rates beyond describing the company as “high growth” and “profitable.”
- The financing is expected to close in early December 2025, subject to unspecified closing conditions, with a public listing targeted for 2026.
- The Series B pricing implies a post-money valuation that would need to be assessed against current market benchmarks. According to SaaS Capital, private SaaS companies under $50 million in revenue typically command 3.5-7x revenue multiples. Healthcare-specific SaaS valuations declined from 7.5x revenue in July 2021 to 2.5x in July 2023 before recovering somewhat, reflecting broader market corrections in the healthcare technology sector.
Industry Context
This financing reinforces investor confidence in WELLSTAR’s strong performance and growth outlook, and provides significant balance sheet strength as we scale our AI-enabled solutions, expand our product portfolio, and pursue strategic acquisitions.
Amir Javidan, CEO of WELLSTAR
WELLSTAR operates within the healthcare practice management software sector, providing technology for clinical workflows, patient engagement, and administrative processes. The company is positioned as part of WELL Health Technologies’ broader ecosystem, which includes both technology solutions and owned clinical operations across Canada.
The spinout strategy aims to allow investors to access a pure-play healthcare technology investment separate from clinical operations. The healthcare technology sector has seen several notable spinouts in recent years, including GE HealthCare’s 2023 separation from General Electric and 3M’s 2024 spinoff of Solventum, its healthcare business. These transactions reflect a broader trend of parent companies separating specialized healthcare divisions to sharpen operational focus and potentially unlock shareholder value.
Healthcare practice management software is experiencing sustained growth, with the global market projected to reach $19.52 billion by 2030 at an 8.92% compound annual growth rate.
Cormark Securities, Beacon Securities, and Stifel Nicolaus Canada are serving as co-lead agents for the financing, with Cormark Securities as sole bookrunner.
