Par8o Picks Up $10.5M From Investors Moving Into Health IT
Get ready for an influx of venture funding in healthcare software. Especially to startups whose founders have prior experience at well-known companies.
A case in point is Boston-area startup Par8o (“par-eight-oh”), which said today it has raised a $10.5 million Series A funding round. The company’s investors include Atlas Venture (the tech side of the firm), Founder Collective, CHV Capital, and Allscripts.
Par8o, named after 19th century economist Vilfredo Pareto, is led by founders Daniel Palestrant and Adam Sharp, who are both physicians. The pair previously co-founded Sermo, the online community for doctors that built a business around selling access to its network to financial institutions and other organizations. Sermo raised more than $40 million in venture funding and was sold to New York-based WorldOne for an undisclosed price in 2012. WorldOne subsequently raised more money to expand Sermo.
Par8o started as a project within Sermo back in 2010 and was spun out three years ago. The 50-person company makes software that tries to improve the way doctors and hospitals refer patients to one another. The bigger idea is to match up patients with healthcare and resources more efficiently. For example, a medical center could use the software to improve care coordination—things like having test results or discharge plans on hand when they’re needed.
Palestrant, the company’s CEO, said in a statement that Par8o is trying to “bridge the problematic gaps” in electronic medical records technology, “facilitate better information sharing, and ease office workflows so that physicians have a smarter way to match patients to the right next step in their care.”
Lest we take a software analogy too far, it sounds like Par8o is trying to develop an “operating system” for healthcare organizations—namely, a unified way to track and manage patients through the whole mess of different specialists, tests, networks, and insurance plans.
Par8o’s financing highlights a trend of tech investors moving deeper, and earlier, into healthcare. Atlas Venture and Founder Collective previously co-invested in PillPack, an online pharmacy startup. Atlas—which is known for its involvement in companies like AngelList, Bit9, DataXu, and DraftKings—has also invested in health IT companies Keas and ZappRx. And Founder Collective, known for its investments in Uber and BuzzFeed, has also backed Omada Health, Kinsa, and GiveForward.
The timing seems right for VCs to take the plunge, after years of dipping their toes in. “With shifting demographics, policy changes, and cost pressures on the healthcare system, the environment is ripe for innovation,” Atlas partner Jeff Fagnan said in a statement.