K1 Investment backs healthcare IT provider Rethink First

K1 Investment Management is betting on the growth of the telehealth market through Rethink First.

The private equity firm has made a nine-figure strategic investment in Rethink Autism, a New York City-based healthcare IT company.

The investment was made as part of a majority recap with its founders, who will continue to operate the business, K1 told PE Hub.

K1’s investment comes amid Rethink’s recent acquisition of TheraWe, a telehealth and parent engagement platform focused on ABA pediatric care.

The investment in TheraWe is set to accelerate growth in Rethink, further helping educators, clinicians and parents in need of services that have been magnified by the current work-from-home and limited-healthcare environment.

Rethink First, formerly Rethink Autism, provides online clinical tools to support assessment, treatment planning, video-based training, practice management services, as well as customizable data collection and progress reporting. Rethink reaches more than 10 million employees, students, clinicians, and family members of children with developmental disabilities, such as autism, down syndrome, and speech-and-language problems, through its various services and tools.

According to the company, 10 of the top 15 largest tech firms on the planet are Rethink customers.

K1 plans to accelerate the advancement of the product features and scale Rethink through additional acquisitions, Ron Cano, a managing partner at the firm, said.

The investor also considers Rethink’s new telehealth capabilities relevant as the world continues battling covid-19.

“The acquisition of a telehealth platform was timely to address the needs of our customers in the work-from-home environment,” Cano said.

The size of K1’s investment and the size of the company is unclear.

In 2018, the company sought a buyer with the help of financial adviser Evercore. The company at the time produced between $18 million and $30 million in revenue, sources told PE Hub. 

According to Crunchbase, prior to K1’s investment, Rethink raised $12.4 million in Series C funding round in 2014 with participation of a few venture capital investors.

K1, which developed a relationship with Rethink management over the last several years, worked directly with the company’s founders on the transaction.

K1, based in Manhattan Beach, California, specializes in backing high-growth enterprise software companies.

The firm has been quite active during the pandemic, especially on the sell side.

In May, K1 sold FMG Suite, a cloud-based marketing software company used by financial services providers, to Aurora Capital Partners.

In late April, the firm sold a portion of its stake in Israeli software security company Checkmarx to Hellman & Friedman.

PE Hub reported that K1 was set to make 26x its original investment on Chechmarx’ stake sale.

Action Item: See PE Hub’s previous reporting on Rethink First.

Update: The story was updated to reflect the company’s new brandname Rethink First.