In January, H1 picked up provider data management software company Ribbon Health to broaden its reach into the health plan, provider system and digital health sectors.
Five months later, the healthcare tech company has acquired Veda Data Solutions to build out its provider data and automation solutions for payers.
Financial terms of the deal were not disclosed.
Founded 10 years ago, Veda fixes bad provider data for healthcare organizations. Inaccurate and out-of-date health plan provider directories continue to be a thorny problem in healthcare and can make it difficult for patients to find a clinician when they need care.
Veda, a 2019 Fierce 15 honoree, developed an artificial intelligence platform that enables payers to transform and ingest provider rosters rapidly, reducing turnaround times from weeks to hours, according to the company.
Veda was founded by an astronomer, Bob Lindner. Ph.D., and a political entrepreneur, Meghan Gaffney. Lindner's research looked to the stars, using machine learning to uncover how galaxies were formed. Gaffney's career was focused closer to Earth, bringing together constellations of political and community leaders to solve problems in healthcare, energy and the environment. Currently, 93 million people rely on Veda's tools to power the healthcare industry, according to the company.
Veda is backed by investors Oak HC/FT and HealthX and raised $45 million in 2021.
The acquisition tackles one of healthcare's most vexing challenges: ensuring accurate information about doctors is available so patients can find the right care, according to Ariel Katz, CEO and co-founder of H1.
"Accurate information about doctors isn't just a data problem—it's the foundation for effective healthcare delivery. By solving this challenge, we're helping ensure everyone can find and access the care they need," he said.
Healthcare has long struggled with fragmented, outdated and incomplete provider information, creating inefficiencies for health plans and barriers for patients. It's not only an inconvenience for patients but can lead to administrative burdens for providers and health plans and may impact costs and access to care.
H1, a tech platform hosting healthcare provider profiles for life science, provider, health plan and digital health customers, acts as both a professional database and an analytics service.
The acquisition of Veda gets the company closer to its mission of connecting the world with the right doctor, Katz said.
With this deal, the majority of Americans that are in commercial insurance are now using an H1 product to find the right doctor for them, Katz contends, as 30 million individuals access Ribbon Health's information to find a provider.
With the acquisitions of Ribbon Health and Veda, H1 now offers expanded solutions that address critical needs for how health plans manage provider information.
"Ribbon has been a smashing success within the business, which gave our board and investors excitement around us continuing to do this. There's a lot of work going into making sure we have the best, most accurate, comprehensive information about doctors that power all these different offerings," Katz said.
“At Veda, we've always believed that solving healthcare's data problem would transform patient care," Gaffney, CEO and co-founder of Veda, said in a statement. "Joining forces with H1 turns that possibility into reality. Together, we can finally address this persistent challenge in healthcare, enabling health plans to operate more effectively and focus on what truly matters—delivering exceptional care."
The deal also advances H1's strategy to create the industry's first comprehensive end-to-end provider data platform for directories, networks, rosters, credentialing and provider data management, Katz said.
"Strategically, now we know which doctors Americans care about. Literally, we know what they're searching," he said in an interview. "Life sciences companies want to know which doctors patients are going to see so they can go and educate those doctors about the conditions and their new therapies for those patients. So, it builds this massive network effect as you work with different touchpoints in the healthcare ecosystem of insurance companies, digital health companies, life science companies and hospitals. You know which doctors are being searched and you get an incredible signal to know what to focus on. That's the network, data and product strategy that comes along with it as well."
H1 continues to be on the hunt for acquisition targets, with a focus on provider data companies, Katz said.
"We're going to continue to be incredibly aggressive. We have a strong thesis that in healthcare that in order to create something big, it's hard to grow organically," he said.
H1 wants to continue to grow at a time when many industry leaders expect increased M&A in digital health and health tech. Two weeks ago, health tech company Datavant announced plans to acquire real-world evidence company Aetion to be a bigger player in the real-world data space. Tempus AI picked up Deep 6 AI, a leading AI-powered precision research platform for healthcare organizations and life sciences companies.
"There's going to be a massive wave of consolidation healthcare. We're in inning two, and it will happen over the next 18 months," Katz said.
"That wave of consolidation is happening because, on a macro basis, in 2020 to 2021, there was a bubble when it came to health tech VC funding around COVID time. As a company that got funding back then either you grow into being profitable or into the valuation, or you go public at a lower valuation or you can't and it is a good option and it's incredibly successful to have an exit. You're seeing all three of those things happen right now," he said.
The majority of venture capital funding now is pouring into healthcare AI companies. Many digital health companies that raised funds in the 2020-22 time frame are now struggling to raise additional funding, which creates fertile ground for M&A.
Like many health tech companies, H1 is investing in AI-powered capabilities, including an internal AI agent to improve provider data accuracy, Katz noted.
The company also launched a natural language search function to look for doctors and generative AI tools to summarize information about doctors. Those capabilities were launched in beta to life sciences customers and will eventually be rolled out to digital health companies and health plans, Katz noted.
Katz and Ian Sax founded H1 in 2017 based on the idea of developing a platform to connect healthcare professionals to help pharmaceutical, biotech and medical device companies develop drugs and devices. The company has developed a massive digital professional database and data analytics platform that connects healthcare professionals and life science companies. It basically serves as a LinkedIn for the pharmaceutical and biotech industries.
H1 has raised $193 million to date, including a $100 million series C round in 2021 and a $33 million series C extension in 2022.