Cityblock Health, a company primarily focused on providing care for urban Medicaid and dual-eligible members, plans to acquire Homeward Health to expand deep into rural markets, the company announced Thursday.
Combined, the two companies will serve nearly 250,000 people and are positioned to reach the120 million people receiving government-funded healthcare in the U.S., Toyin Ajayi, Cityblock Health CEO and co-founder wrote in a blog post.
Cityblock said it signed a definitive agreement to acquire Homeward in an all-stock transaction. Financial details of the deal were not disclosed.
Both companies have focused on building scalable care models for hard-to-reach populations. The acquisition will pair Cityblock's data and care-orchestration platform with Homeward's rural provider relationships and care model, according to executives.
Brooklyn, New York-based Cityblock also picked up a $116 million series E funding round led by General Catalyst. The company has raised approximately $1 billion to date. Its largest financing was a $400 million late-stage funding round in 2021 that pushed the company's valuation to roughly $5.7 billion.
It launched in 2017 out of Alphabet's Sidewalk Labs with the goal of delivering integrated health and social services to historically marginalized communities with complex needs. Cityblock combines primary care, behavioral health and chronic disease management services that address social determinants like transportation, housing and access to healthy food.
Cityblock currently serves almost 200,000 members and its annualized revenue is $2.2 billion, up 77% year-over-year, according to Ajayi's blog post.
The company works with national and regional Medicaid plans, as well as health systems, in over 10 states. It offers members mobile urgent care and at-home care and connects members to community-based organizations for social services. Cityblock routinely partners with payers and managed care organizations to identify high-risk patients and claims to reduce hospitalizations, acute utilization and medical spend. It does this through its multidisciplinary care teams that include primary care providers, behavioral health specialists, community health partners, nurse care managers, pharmacy navigators and more providers.
Jennifer Schneider, M.D., former chief medical officer and president of Livongo, teamed up with other Livongo alums, including Amar Kendale, to launch Homeward Health in 2022 to tackle rural healthcare.
There are many healthcare disparities facing rural communities, and it's a sizable problem. About 60 million people, or 1 in 5 Americans, live in rural America. In the U.S., 80% of rural counties lack a sufficient number of primary care providers, according to the National Rural Health Association’s policy institute.
Homeward Health, also backed by General Catalyst, aims to fill gaps in rural healthcare to help patients get care in their homes and with local providers. The company employs a multidisciplinary care team, available both virtually and on the ground via community-based mobile care units, with in-home remote monitoring that keeps patients connected to their care team.
Schneider told Fierce Healthcare in 2024 that improving rural healthcare was "personal" for her as she grew up in the small town of Winona, Minnesota. She was diagnosed with Type 1 diabetes at a young age and experienced firsthand the lack of primary and specialty care that millions of families across rural America deal with every day.
"Under Dr. Jenny Schneider and Amar Kendale, Homeward built something significant: a rural-first Medicare Advantage model that has deep ties with plans like Blue Cross Blue Shield of Michigan, nearly 50,000 members, and rural care expertise few competitors match," Ajayi wrote in the blog post. "Like Cityblock, Homeward went after a space with the biggest challenges in our health system at a time when the stakes couldn’t be higher, where funding challenges and rural provider access shortages have resulted in a desperate need for care, particularly among the most vulnerable and hard to reach populations."
Homeward built an AI-native technology platform purpose-built to solve the rural health crisis at scale, Schneider said in a LinkedIn post.
By uniting Cityblock with Homeward’s rural care expertise the two companies are building "a national care delivery model capable of reaching over 120 million Americans across both urban and rural communities," she wrote.
"My relationship with Cityblock goes back a long way. Having served as a past board member, I’ve had a front-row seat to their impact in care delivery for the country’s most complex populations. That’s why today’s news feels like such a natural alignment of mission, vision, and values," she wrote.
In the past four years, Homeward has delivered comprehensive care to more than 50,000 rural patients across 50 counties, in partnership with 5,000 providers, according to Schneider.
The acquisition comes as Medicaid programs face significant funding cuts as a result of the One Big Beautiful Bill Act. At the same time, reimbursement rates for Medicare Advantage are tightening and healthcare costs are quickly rising.
"We think the answer to funding pressures in government programs isn’t to retreat from them—it’s to get radically better and more efficient at delivering outcomes for the people who depend on taxpayer-funded healthcare," Ajayi wrote.
Cityblock plans to apply its AI-native, outcomes-first model that is has used for Medicaid members to rural Medicare Advantage and dual-eligible populations, executives said. "These aren’t three separate bets. They’re one bet: that scaling provider capability which improves outcomes is the only way to make government-funded healthcare sustainable for the people who need it most, at a moment when access and affordability are getting harder," Ajayi wrote.
Cityblock built an operating system, called Care Orchestration and Resourcing Engine (CORE), that pulls together fragmented data, including member clinical data, to power predictive analytics for proactive outreach and to close gaps in care for high-risk members. The company's predictions are right 62% to 87% of the time, Ajayi noted.
The company also is building and deploying a growing suite of AI tools handling routine engagement and administrative work.
Since 2021, Cityblock has increased revenue by 323%, improved corporate opex as a percent of revenue by 64%, scaled from five to 18 customers, improved EBITDA margins by 81%, and delivered positive operating margins in our markets, Ajayi wrote in the blog post.