Pace of Digital Health Venture Funding Accelerates

March 24, 2021
Eight companies announce new investments, led by Ro’s $500 million

The last 10 days has seen a flurry of digital health company venture capital investments, led by Ro, a company creating a vertically integrated primary care platform, which announced raising $500 million.

Total corporate funding for digital health, including venture capital, debt, and public market financing, reached $21.6 billion in 2020, according to Mercom Capital Group. “COVID-19 supercharged funding activity in digital health in 2020. Ten digital health categories had their best year with record funding amounts. It was also the biggest year for IPOs with six digital health companies raising over $6 billion. We could see a lot more companies going public in 2021 if the current IPO and SPAC boom continues,” said Raj Prabhu, CEO of Mercom Capital Group, in a statement. "The pandemic has mainstreamed the consumer side of digital health technologies in less than a year. Digital health products that were a novelty a year or two ago are now a necessity."

Clearly, the pace of investment has not slowed down in 2021.

Zachariah Reitano, co-founder & CEO of Ro, described it as the only company to combine a nationwide telemedicine, pharmacy distribution, and in-home care network. “Through this vertically integrated platform we're making high-quality care available when and where patients need it, with no insurance required so patients are the ones in control. We're powering a patient revolution, and we're just getting started,” he said in a statement. Ro will use the newly raised capital to strengthen its vertically integrated primary care platform. It plans to expand its pharmacy distribution network, continue to enhance its proprietary EHR (the Ro Collaborative Care Center), build new capabilities such as remote patient monitoring with integrated devices, and broaden into additional treatment areas that leverage its diagnostic capabilities.

San Francisco-based Ginger, which is an on-demand mental health company, announced a $100 million Series E financing round led by funds managed by Blackstone Growth. This latest round of investment will bring the company’s total funding to over $220 million.

Over 10 million people have access to Ginger in over 40 countries around the world through the company’s partnerships with employers, health plans, and strategic partners.

Last year, Ginger introduced a value-based model that allows employers to offer every eligible employee and adult dependent access to Ginger’s entire spectrum of care for a fixed fee, including unlimited self-guided care, 24/7 on-demand behavioral health coaching, and a predetermined number of therapy and psychiatry sessions. In the last 12 months, nearly 60 percent of Ginger’s new clients have adopted this option for their employees, demonstrating a significant desire for value-based models in mental healthcare.

San Mateo, Calif.-based Evidation Health announced the close of $153 million in Series E growth funding to expand its virtual health programs on Achievement, which it calls the largest digital health network in the United States. The round was co-led by OMERS Growth Equity and Kaiser Permanente Group Trust; existing investors, including McKesson Ventures and B Capital Group also participated.

Evidation will use this additional capital to fuel the expansion of virtual health programs on the Achievement platform, building on its relationships with individuals and its experience synthesizing and analyzing person-generated health data for stakeholders across healthcare. Evidation’s new programs will provide personalized insights and tools to motivate and empower individuals to take evidence-supported actions to manage their health and conditions, the company said. 

Komodo Health announced a $220 million Series E funding round led by Tiger Global Management and joined by Casdin Capital. Existing investors ICONIQ Growth, Andreessen Horowitz, and SVB Capital also joined the round.

The additional funding will allow Komodo Health to accelerate investment in its enterprise technology platform, application suite, and core data assets. Komodo Health said it pairs a complete view of patient encounters with enterprise cloud technologies that connect the dots between individual patient journeys and large-scale health outcomes. Founded in 2014, Komodo said this combination is helping life sciences companies, health plans, and patient advocacy groups close gaps in care, address unmet patient needs, improve engagement, and ultimately help drive novel therapies into the market.

Unite Us, whose  platform connects healthcare and community-based organizations, raised $150 million in a Series C financing led by ICONIQ Growth. In 2020 Unite Us that expanded into 42 states, including 16 new statewide networks, driving cross-sector coordination and improved health in community-based settings. Investors in the round include Emerson Collective, Optum Ventures and Transformation Capital, as well as existing investors, Define Ventures, Salesforce Ventures and Town Hall Ventures, and several healthcare partners. The company said it is now valued above $1.6 billion.

The financing will catalyze the company's ability to bring its core product, Unite Us Platform, to all communities across the country by 2023, as well as accelerate Unite Us Insights and Payments solutions to amplify support and investment for all community partners. "We are excited to double-down on our vision for a person-centered, coordinated, nationwide, social care network," said Dan Brillman, CEO and co-founder, in a statement. "Our community-based partners' ability to drive improved outcomes is critical in a value-based care world, and we know that bringing the necessary technology into every community will accelerate our impact."

Denver-based Strive Health, a national company focused on value-based kidney care, announced that the organization has secured a $140 million Series B round of funding. This funding round was led by CapitalG, Alphabet’s independent growth fund. Redpoint also joins current investors NEA, Town Hall Ventures, Ascension Ventures and Echo Ventures to complete the round.

The financing will “support the growing demand for Strive’s whole-patient solution for kidney disease populations,” and it brings Strive’s total funding to $223.5 million, officials stated. Strive’s model combines technology with patient care, with the aim to slow kidney disease progression, prevent unnecessary and costly hospitalizations, and expand access to optimal renal replacement therapies such as home dialysis and transplants.

The growing national spotlight on kidney care and the demand for value-based healthcare solutions has helped Strive more than double its presence in regional markets and grow its employee base by more than 600 percent in the last year, its officials touted. Indeed, recent efforts at the federal level have set out to transform approaches to kidney care treatment by encouraging providers to intervene early and provide more holistic care for patients.

San Francisco-based Clarify Health raised $115 million in Series C funding. New investor, Insight Partners, led the round alongside Spark Capital, Concord Health Partners, and HWVP, with participation from the company’s largest investor, KKR, as well as Rivas Capital and Sigmas Group.

The new funds will be used to further scale the company’s self-service healthcare analytics cloud and business applications. Clarify said it has created one of the largest longitudinal data sets in the industry, linking government and commercial claims, electronic health records, prescription, and social and behavioral data on over 300 million unique patient lives. It said it has patented methods for enriching and sequencing traditionally siloed and unstructured data, which allow its machine learning models to be trained on large cohorts and deliver a more complete picture of each patient’s healthcare journey.

“Healthcare data is rapidly becoming a commodity. It’s what you do with it that matters,” said Todd Gottula, president of Clarify Health, in a statement. “We’ve applied the big-data efficiencies of the banking industry and the analytics methodologies of baseball to healthcare to deliver the speed and precision of insight required to make better decisions.”

Finally, DexCare Inc., a newly formed digital health company, announced a $20 million investment led by Define Ventures, and also including Frist Cressey Ventures, Kaiser Permanente Ventures, SpringRock Ventures and Providence Ventures.

DexCare, a platform-as-a-service (PaaS), is a digital care operating system that manages health system capacity and demand across all lines of care. It has secured half a dozen customers, including Community Health Network, the Froedtert and the Medical College of Wisconsin health network, Houston Methodist, and Providence. Concurrent with funding, DexCare has been spun out as a separate company after being incubated at the Washington-based Providence, within the health system’s Digital Innovation Group

DexCare was developed by Providence, one of the largest health systems in the U.S. Initially developed as the platform for Providence's ambulatory care business, DexCare has been driving patient acquisition, navigation and capacity optimization for the organization since 2016, according to officials.

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