Aledade notches $123M series E to grow value-based care for independent practices

Aledade, a startup that uses data analytics to help independent doctors’ offices transition to value-based care models, has added another $123 million to its fundraising haul with a series E round.

The raise comes in the wake of continued growth for the startup. According to the announcement, Aledade currently partners with more than a thousand independent primary care practices comprising over 11,000 physicians and has nearly 150 contracts covering over 1.7 million patients and $17 billion in total healthcare spending.

In comparison, at the time of its $100 million series D round in January 2021, the company had just under 800 practices with more than 7,800 providers and 86 plans covering 1.2 million patients and about $12 billion in total spending.

"When we started Aledade nearly a decade ago, we made a bet that if we empowered primary care doctors with the right insights, technology, and contracts that paid for value, we could improve patient outcomes, cut wasteful spending and create a scalable business model for these practices and Aledade to thrive," Farzad Mostashari, M.D., CEO and co-founder of Aledade, said in a statement.

"With this financing, Aledade is extremely well-positioned in this market environment to accelerate our work to meet patients where they are, especially in Medicare Advantage, and seize new opportunities to expand wraparound patient care services,” he said.

Aledade has raised $429 million to date and is now valued at $3.1 billion, according to an Insider report.

Prior backer OMERS Growth Equity led the latest round, which also saw participation from Fidelity Management & Research Company as well as other existing investors.

“OMERS Growth Equity has invested in Aledade's series C, D and now E funding rounds, and we are excited to continue to partner through its next phase of growth,” OMERS Managing Director Teresa Lee said in a statement. “We share in Aledade's conviction that technology can and should transform the healthcare experience for patients, physicians and payers,"

The company said its business was EBITDA-positive in 2020 and 2021 and currently brings in revenues exceeding $300 million. It’s active in 36 states and the District of Columbia and said its model is projected to have created more than $1 billion in total healthcare savings.

Medicare contracts make up about two-thirds of its plans, with the startup noting that it increased its number of Medicare Advantage patients by 85,000 in 2021 to a total of more than 200,000.

Aledade said in the announcement that it’s planning to direct the new funds toward further growing the number of Medicare Advantage seniors under its wing as well as toward innovative investments that can improve care and increase savings.

“Difficult market conditions can create exceptional opportunities for strong businesses to get stronger and that is our plan,” Mostashari said.

Aledade’s latest fundraising comes about five months after the announcement of its first tuck-in acquisition, Iris Healthcare.

The company’s advance care planning technology solutions were integrated into Aledade’s model as part of Aledade Care Solutions, its recently established health services business unit.

“Aledade intends to deliver more direct services through [Aledade Care Solutions], empowering and extending the capabilities of primary care practices, improving patient health and driving long-term financial returns,” the company said of its subsidiary in Monday’s funding announcement.