New Eye Care Investor RevOptix Grabs Majority Stake in RevolutionEHR
San Francisco investment group RevOptix has acquired a majority stake in RevolutionEHR, a Madison, WI-based provider of electronic health records software for eye doctors.
The amount of the investment wasn’t disclosed. RevolutionEHR isn’t calling the deal an acquisition because its staff will stay in place, including co-founder and CEO Scott Jens, and previous investors are maintaining stakes in the company, Jens says. But the deal provided a return for the startup’s Wisconsin angel investors, who have put $1.4 million into RevolutionEHR since its 2006 founding. Those investors include Jeff Rusinow in Milwaukee and Sean Cleary in Madison.
“It’s the same CEO, the same team—just with more muscle,” Jens says.
RevOptix is a new private investment group focused on the eye care industry, Jens says. Its executive chairman, Gunnar Bjorklund, previously founded and was a managing director of private equity firm Sverica International.
Electronic health records software has become a booming industry over the past several years, driven by federal government subsidies and an effort by healthcare providers to make their processes more efficient. Verona, WI-based Epic Systems is the leading software provider in hospitals and clinics, and has grown to more than 8,000 employees and $1.75 billion in annual revenue.
Optometry is a much smaller corner of the healthcare market, mostly made up of small private businesses, but it has still provided a lucrative niche for software companies to target. Despite competition from more established players like Eyefinity and Compulink, RevolutionEHR has grown to $5.5 million in annual revenue, according to Inc. 5000 data last year. It employs 70 people, about a third of them in Wisconsin, and intends to hire at least 20 people in the next couple of years, Jens says.
Some of the company’s growth has been driven by federal subsidies encouraging optometrists to switch from paper-based records to electronic systems, but those incentives are winding down, says Jens, a practicing optometrist for more than 20 years. The biggest challenge for his software company is convincing late adopters that RevolutionEHR’s software is useful and can help their practices be more efficient, which will allow them to see more patients—and make more money.
“They find some of the software processes to be a challenge,” Jens says of the late adopters. “A bunch of practitioners out there are still on paper systems, and we have to find a way to move them.”
His company has attracted customers with its cloud-based software-as-a-service model, and it aims to further distinguish itself by adding new services and building new product features, such as more mobile capabilities, he says. RevolutionEHR has customers in the U.S. and Canada, and Jens wants to make a bigger international push now.