Health tech company Transcarent pocketed $126 million in series D funding led by General Catalyst and 7wireVentures, the company announced Thursday.
New investors include Geodesic Capital and Memorial Hermann Health System, and existing backers such as Threshold Ventures, Kinnevik, Ally Bridge Group, Human Capital, Merck Global Health Innovation Fund, Alta Partners and Leaps by Bayer also participated. The investment brings Transcarent's total funding to $450 million at a valuation of about $2.2 billion.
The company plans to use the fresh cash to build out its artificial intelligence capabilities, continue to support its commercial growth and back future strategic growth, according to the announcement. Glen Tullman, CEO of Transcarent, told Fierce Healthcare that the team has largely built the scale that it's looking for and is now putting that focus on AI as well as continuing to expand its commercial reach.
Tullman said the company was contacted proactively by investors who were interested, as Transcarent itself wasn't courting investors actively at the time.
"I think they're seeing from some really top-notch customers that we're starting to win," he said.
Transcarent's platform aims to connect its members to a comprehensive suite of services that are accessible in one place, including medical, surgery, pharmacy and mental healthcare. It also aims to simplify the employer's experience in providing coverage and paying for care.
Tullman said that several market trends are likely converging as tailwinds to propel Transcarent's growth and help the company garner more attention from investors. For one, legacy telehealth players have run into headwinds as they adjust to a post-COVID sector. And, while there is no shortage of point solution providers available, there's a growing sense of fatigue from employers, health plans and other stakeholders in sifting through all those options.
He added that Transcarent has built the AI tools necessary to make providers' workflows easier and has deployed them in its Transcarent Clinic. For example, if a doctor connects to Transcarent's platform and reports that a patient has sinus pain, headache and nasal drainage as symptoms, the AI tools will identify that the patient likely has a sinus infection. It will then comb their records and flag in their history that they have regular seasonal sinus infections.
The tool can then pull prescriptions and pharmacies that they've used in the past, allowing the doctor to quickly have a likely diagnosis and identify medications that work. It can also note pharmacies or other locations that may be more convenient for the patient, Tullman said.
With that vision in place, the goal now is to make that technology more accessible for providers who can benefit, he said.
"Now we have people coming to us saying, 'Hey, can we use your technologies?'" he said. "That's how this is working for us."
The next challenge is to deploy these technologies to meaningfully drive down healthcare costs, which is the central focus at Transcarent at the end of the day, Tullman said.
Transcarent secured a $200 million series C funding round in January 2022 and since then has grown to offer programs for weight health, cancer care, behavioral health and pharmacy. It also acquired part of AI-enabled virtual care company 98point6 and in September 2023 launched its National Independent Provider Ecosystem, which has a number of notable health systems from Advocate Health to Mass General Brigham involved in making high-quality care more affordable for employers.
Transcarent said that more than 4.3 million people can access its services either through their employer or insurer.
“By building meaningful partnerships with local community healthcare providers, Transcarent is expanding opportunities for health systems to support national employers through innovative, value-based payment models,“ said Feby Abraham, executive vice president and chief strategy and innovations officer at Memorial Hermann Health System, in the press release. “Transcarent’s platform empowers employer benefits programs, making it easy for employees to seek high-quality care from trusted local providers.”