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 the 120 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 more than $900 million 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.
When asked about plans to go public, the company said in a statement that the Cityblock team is not focused on an exit at this time.
With the Homeward deal, Cityblock sees opportunities to scale its value-based, tech-enabled care model to reach high-need Medicare Advantage and dual-eligible members across markets.
“As we grow our scale, it puts us in a position to keep building tools that are accelerating the pace and effectiveness of value-based care,” Mike Roaldi, Cityblock Health president, told Fierce Healthcare in an interview. “The additional scale gives us that many more members to continue to iterate and test our new AI-enabled tooling to learn what different types of members' needs are and teach those tools to get better and better at identifying those needs, and then empowering our care teams to deliver great outcomes. It’s really a combination of the rural expertise as well as the additional scale that it provides us.”
Cityblock 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. It combines primary care, behavioral health and chronic disease management services to address social determinants such as 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.
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.
Funding and reimbursement pressures make value-based care more important, not less, Roaldi stressed.
Health plans facing tighter budgets are increasingly focused on reducing costs while improving outcomes. Cityblock’s track record of lowering total cost of care while improving quality gives it confidence that demand for value-based care will continue to grow despite policy and funding challenges, he said.
Cityblock sees big opportunities in the Medicare Advantage space—it recently announced a partnership with insurer Humana to serve 20,000 Medicare Advantage and dually eligible members in North Carolina.
“What we have found is that our care model really can have a huge impact on some key components of Medicare members’ care. In particular, our ability to engage the population helps close HEDIS gaps, especially for those members that are infrequently seeking care or maybe have challenges to finding and accessing care and then ensuring that they're actually engaging with the system on a longer-term basis, and sometimes that requires a different type of setting for care, such as in home or virtual, in addition to our clinics,” Roaldi said. “By acquiring Homeward, a company specifically focused on rural MA, that really accelerates our penetration into that market and gives us a chance to build off of that foundation to scale more quickly with tools that are specifically designed for that rural MA population.”
Both companies have a track record of building trust with hard-to-reach patients, he noted. Urban and rural patients face different barriers to care, but both require proactive outreach and can benefit from care teams who are willing to meet them where they are, Roaldi added.
Cityblock plans to apply its AI-native, outcomes-first model that it 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 is also building and deploying a growing suite of AI tools handling routine engagement and administrative work, and the series E funding round will fuel further investment in AI technologies, executives said.
Cityblock's AI-powered CORE platform moves beyond broad risk categories by creating individualized member profiles, identifying specific needs and recommending interventions. The platform also synthesizes complex medical histories into actionable insights, reducing administrative work and giving clinicians more time to spend with patients. Cityblock's CORE platform and AI tools are key differentiators that enable the company to scale personalized, value-based care, Roaldi said.
“We believe that AI is a huge part of the future of care for underserved populations in Medicare and Medicaid. We believe it unlocks the underlying capacity of the care teams to focus on engaging and providing care to those members,” he said.
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.
Editor's Note: This story has been updated following an interview with Cityblock Health President Mike Roaldi.