Zarminali Pediatrics, a technology-enabled pediatric multispecialty care platform, is looking to build a national pediatric brand largely by pursuing pediatric group acquisitions, founder and CEO Danish Qureshi said.

The Chicago-based company primarily looks to buy pediatric primary care groups but will also consider pediatric urgent care, therapy (including speech, occupational, and behavioral), allergy, and dermatology practices, Qureshi said.

Zarminali’s outpatient model integrates primary care, urgent care, specialty services, therapy, and telemedicine to streamline care and reduce clinician burnout. The business operates more than 30 clinics across 10 states, including about 20 acquisitions, Qureshi said.

Its largest acquisition generated about USD 10m in revenue across seven clinics, while the smallest had roughly USD 3m, Qureshi said, adding the company would consider larger, transformational deals despite a dearth of regionally scaled providers.

“We aim to build the first national pediatric brand under one name,” Qureshi said.

Zarminali looks at targets in major metro areas within the 30 most populous states, offering virtual services elsewhere, the CEO noted.

Deals could be financed using a mix of cash, debt, earnouts, and existing equity, with new equity reserved for rare large transactions, he said.

Zarminali is also looking to raise more capital within 18 to 24 months, which could bring the company to cash-flow positivity. This is expected to be the last funding round before a potential IPO in three to five years, the CEO said. Zarminali announced a USD 110m Series A led by Healthier Capital in January.

Since its founding in 2024, Zarminali has generated “tens of millions” in revenue and expects to more than double in size this year, according to Qureshi. The company is profitable at the gross profit level but is reinvesting in growth and plans to operate near breakeven for the next few years, he added.

Over the next five years, Zarminali expects roughly two-thirds of growth to come from M&A and one-third from de novos, with that mix expected to reverse thereafter, Qureshi said. The company plans to open about 15 de novo clinics this year.

Qureshi founded Zarminali after his young daughter developed an autoimmune disease, exposing the family to a fragmented pediatric specialty market that even Qureshi, with his extensive healthcare background, found difficult to navigate.

Previously, Qureshi co-founded and served as president and COO of LifeStance Health, one of the largest providers of outpatient mental health services. He also was COO of Accelecare Wound Professionals, which was acquired by Clayton, Dubilier & Rice-backed Healogics in 2015. Earlier in his career, Qureshi worked in investment banking and private equity at Bain & Company and Nautic Partners.

Zarminali has raised approximately USD 150m in capital, including some venture debt from Silicon Valley Bank and K2 HealthVentures, Qureshi said. In addition to Healthier Capital, equity investors include General Catalyst, K2, and Boston Children’s Hospital.

Qureshi said he and the management team still own the combined majority stake in the business.

Zarminali has about 500 employees, roughly half of whom are providers, Qureshi said. The company generates revenue primarily from commercial and government insurance, with Qureshi noting that around 50% of US children are covered by Medicaid.

Acute Medicaid pressure is weighing on the industry, Qureshi said, adding that Zarminali plans to use artificial intelligence to drive efficiencies. Historically slim pediatric margins, typically below 10%, have also deterred many investors, though “with scale, you can build margins.”

Outside of large health systems, there are no direct outpatient competitors as diversified as Zarminali, with “most going deep in one vertical,” Qureshi said.

Publicly listed One Medical, a tech-enabled primary care company focused on adults, was pursuing a similar model to Zarminali before its USD 3.8bn take-private by Amazon in 2023.

Nasdaq-listed Lifestance Health Group is a similar player in mental health services, Qureshi said.

Amir Dan Rubin, a founding partner at Healthier Capital and previous chairman and CEO of One Medical, sits on the Zarminali board.

Gunderson Dettmer provides legal services to the company.