VC Firm Bambu Ventures Acquires Lemonaid for $10 Million

Bambu Ventures, an early-stage venture capital firm, has acquired the telemedicine company Lemonaid Health for just $10 million. This transaction marks a significant shift following Lemonaid’s previous valuation of $400 million when it was part of 23andMe. The acquisition emerged from the bankruptcy proceedings of 23andMe, which filed for Chapter 11 earlier this year. Bambu Ventures’ purchase illustrates a strategic approach to revitalizing distressed assets in the current startup landscape.

Lemonaid Health was previously a division of 23andMe, a leading DNA testing company that acquired it in 2021. Following the bankruptcy filing, Bambu Ventures negotiated with Chrome Holding Co., the rebranded entity of 23andMe, to purchase Lemonaid. The deal highlights how an early-stage venture capital firm can operate using techniques more commonly associated with private equity.

The acquisition was not merely an opportunistic buy. Kyle Pretsch, COO of Lemonaid SPV Inc. and general partner at Bambu Ventures, explained the firm’s motivation during a recent interview. Pretsch noted, “Lemonaid wasn’t just a company. It was a vision. It’s an incredible market, and it’s a mission that we can all feel good about, which is increasing accessibility to healthcare.”

While Bambu Ventures is paying a fraction of what 23andMe invested, Pretsch emphasized that they do not view this as a reflection of diminished value. Instead, he stated, “We don’t believe the value of the asset has eroded since 2021.” The acquisition was facilitated by a competitive bidding process in which both Regeneron and TTAM Research Institute, founded by 23andMe co-founder Anne Wojcicki, made bids but ultimately excluded Lemonaid from their offers.

Pretsch acknowledged that while this type of transaction is unusual, it reflects a unique approach that Bambu Ventures employs. He noted, “Our firm specifically brings a very PE style to venture capital.” This method combines the agility of venture capital with the disciplined approach typical of private equity.

The structure of the acquisition is also noteworthy. Lemonaid SPV, a newly formed entity, will own the company, with Bambu Ventures acting as a guarantor. Pretsch outlined the firm’s strategic aim: to identify undervalued companies and reinvigorate them through disciplined management and targeted investments.

Looking ahead, Bambu Ventures plans to operate Lemonaid independently. Pretsch expressed optimism about the potential for growth, stating, “There are immediate opportunities to advance within patient care, adding products, and reaching more patients.” He noted that under 23andMe, marketing expenditures had been significantly reduced, but Bambu intends to increase investment in this area to stimulate growth.

Pretsch was also confident about Lemonaid’s competitive landscape. He remarked, “There is more than enough white space that we can all operate within our own moats and in our own domains.” This strategy aims to create a holistic offering that enhances consumer experience while avoiding direct competition with other telehealth providers.

As the startup ecosystem continues to recalibrate, Bambu Ventures’ acquisition of Lemonaid serves as a case study in leveraging distressed assets for potential growth. With significant changes in funding dynamics and an increasing focus on sustainable business models, this deal exemplifies how innovative strategies can reshape the future of health technology.