Redesign Health and Sheba's ARC Global merge and agree to buy AVIA

Redesign Health, the New York venture and applied technology firm, and ARC Global, the innovation arm founded at Israel's Sheba Medical Center, announced on 22 October 2026 that they are merging¹. The combined business has also agreed to buy AVIA, a US digital transformation adviser to health systems, subject to final approvals¹. Financial terms were not given in the announcement.

The deal

The three organisations say they work with more than 100 health systems across five continents between them¹. ARC brings a network active in 12 countries, 31 health systems and over 300 hospitals, supporting more than 130 startups, including three unicorns; it reports a $6.7 billion portfolio value, over $1.5 billion raised and 8 exits, two of them in 2024 totalling $800 million¹. Redesign Health, founded in 2018, says it and its portfolio companies have raised over $1.5 billion from institutional, sovereign and strategic investors, and it runs venture capital, venture buyout and health system transformation strategies¹.

AVIA adds a buyer-side data asset. Its intelligence platform is used by more than 90,000 health system leaders and staff to evaluate over 7,000 digital solutions¹.

Brett Shaheen, Redesign Health's chief executive, will run the combined company. Dr Stephen Klasko, former chief executive of Jefferson Health, becomes chairman, and ARC founder Prof. Eyal Zimlichman joins as vice chairman¹. General Catalyst is named as an investor in Redesign Health¹.

What it means for the market

The model is a direct challenge to the usual way health AI is sold. Instead of building products outside hospitals and selling them in, the merged group plans to place technologists, product leaders and AI researchers inside each health system's frontline and IT teams, build tools to fit local workflows, and let the institutions share in the value created¹. Klasko framed the gap it aims to fill: healthcare has "consultants who diagnose, vendors who sell and investors who fund", but no single player inside the hospital that does all three¹.

For AI vendors, that creates a competitor and a channel at once. Products built inside one member system are meant to spread to peers across the network, which competes with outside suppliers for the same budgets¹. Ownership of AVIA, whose platform many US health system staff already use to assess digital products, puts the group close to the point where buying decisions are made¹. The sources do not say how AVIA's evaluation work will be kept separate from the group's own products.

For investors, the structure combines venture building, buyouts and service revenue from health systems. Redesign Health says it will keep investing through its venture capital and buyout strategies¹. A proprietary AI operating system built on a knowledge graph of research and institutional needs is meant to direct where talent and capital go across the network¹.

Hemant Taneja, chief executive of General Catalyst, said healthcare technology "has too often been built outside health systems and sold back into them"¹.

Caveats

The account comes from the companies' own announcement. It gives no price or valuation for the merger or for AVIA, and the AVIA purchase still needs final approvals¹. The founding health systems, which the companies say include several ranked among the best in the world, have not been named and are due to be announced in the coming months¹.