If you had more than $300 million to try and fix the healthcare industry, how would you do it?
For a startup called Devoted Health, the answer involves a combination of providing more home healthcare and support to the seniors it serves, as well as incorporating telemedicine and other technologies as part of a business model that uses more experimentation. We’ll soon see whether the approach has merit.
On Tuesday, the Waltham, MA-based company announced it raked in $300 million in a Series B funding round to implement that new approach. The round was led by well-known Silicon Valley venture firm Andreessen Horowitz, which invested alongside Premji Invest, Uprising, and previous Devoted backers.
Formed in March 2017 by brothers Ed and Todd Park, Devoted Health had quickly and quietly assembled one of the most experienced teams and largest war chests of any healthcare technology startup in New England before announcing the huge investment. It raised nearly $70 million last year from investors, including Oak HC/FT, Venrock, F-Prime Capital Partners, Maverick Ventures, and Obvious Ventures. Now, with more money in hand, the startup said it has officially launched its products and services in the marketplace.
Devoted plans to use its latest cash infusion to further develop its technology and expand its team. The company wants to hire 250 people in Waltham over the next 36 months, according to a spokesperson.
The company describes itself as a combination of a health insurer and care provider. It offers Medicare Advantage plans, initially available in eight Florida counties. It also provides healthcare services meant to complement patients’ primary care doctors and nurses. Devoted hires “personal care guides,” who will help answer patients’ questions and make house calls when they need additional assistance. Devoted is also developing software to help deliver its products and services. For example, the company says it can facilitate tele-visits for urgent care and getting second opinions from remotely located physicians, and it can help set up transportation to and from medical appointments.
“In various parts of the country, there are local examples of organizations dramatically improving healthcare outcomes and bringing down costs,” said Bill Frist, a medical doctor and former U.S. Senate Majority Leader, in a news release. Frist, who invested in Devoted and sits on its board, said he thinks Devoted has the right “team, operating model, technology, and capital to scale this kind of performance nationwide.”
That will be the key question for Devoted. It’s too early to say whether the company has what it takes, but its team has an interesting mix of experience in healthtech, consumer software, and government. CEO Ed Park was previously Athenahealth’s (NASDAQ: ATHN) chief technology officer and chief operating officer. Todd Park, Devoted’s executive chairman, previously co-founded Athenahealth and Castlight Health (NYSE: CSLT), and served as U.S. chief technology officer under former President Barack Obama. Devoted’s other top executives previously held roles at Wayfair (NYSE: W), LinkedIn, eBay (NASDAQ: EBAY), Athenahealth, and Universal American, and served on the White House’s data science team.
Devoted certainly isn’t the only startup trying to transform healthcare with new business models and technology integrations. Another heavily funded example in New England is Boston-based Iora Health, which has raised more than $223 million in venture capital, including a $100 million funding round announced in May. There’s also San Francisco-based One Medical Group, which has raised about $530 million in venture funding, TechCrunch reported. Those startups are taking different approaches than Devoted, but they’re all interesting experiments that, if successful, could shake up the U.S. healthcare sector.