Redesign Health has built and launched 40 healthcare startups since 2018, and it nabbed $65 million in fresh funding to jump-start dozens more.
General Catalyst led the series C financing round. CVS Health Ventures, UPMC Enterprises, the innovation and venture capital arm of leading health system UPMC, Eden Global Partners, Euclidean Capital, Samsung Next, TriplePoint Capital and founding investor Declaration Partners also participated in the financing.
The round brings the company’s post-money valuation to $1.7 billion, according to a source with knowledge of the funding, Fast Company reported.
Based in New York City, Redesign Health is a healthcare startup creator that builds tech-enabled healthcare businesses. Redesign has helped launch companies touching the lives of more than 10 million people across verticals including cancer care, teleaudiology, senior care, COVID-19 testing and metabolic health.
Companies Redesign has helped launch include Jasper Health, which helps cancer patients manage treatment, Dan Trigub's MedArrive, men's health startup Vault Health and metabolic health company Calibrate, among other ventures.
Redesign Health executives say the company's model is unique, and it sets itself apart from venture capital firms, incubators and accelerators.
"We're very focused and believe in enabling a new innovation model in healthcare," said Samantha Lynch, Redesign Health's head of strategy and finance. "We want to continue working with industry leaders like CVS and UPMC to transform the industry from within by investing in the platform from a team and technologist standpoint."
The $65 million boost will be leveraged to build out Redesign's team and technology, Lynch noted.
Redesign works with startups to bring a new model of innovation to healthcare, she said. The legacy systems, processes and incentive structures in U.S. healthcare can be dramatically improved but require a groundswell of technology adoption and business model innovation.
Following months of cross-functional ideation and research, Redesign Health assembles founding teams to address specific healthcare challenges. The company then arms startup teams with tools and technologies spanning more than 20 functional areas including product, design, engineering, user research, marketing, sales and compliance to craft go-to-market strategies, build user-centric digital products, prove product/market fit and scale, according to the company.
"Healthcare is a particularly challenging state to launch a business out in the wild given the regulatory complexity, the conservative nature of the ecosystem, the opaque value chains and the fact that it's super relationship-based," Lynch said. "We can use the platform, the technology, the tools, the insights at Redesign to lower barriers to change across the industry."
About 90% of startups fail, and many do for the same common reasons, such as lack of market or product fit, marketing and team problems.
"What our model does is really to decrease those type of risks and bring in corporate partners to bring impactful healthcare solutions to market," Lynch said. "Some of the things may be the wrong idea, the wrong team. If you're a healthcare seed stage company out in the wild, it's hard to get a pilot with a major enterprise because, for large incumbents, they can't take the same approach as startups, the 'break things, learn and iterate.' That doesn't work in people's health."
"Redesign can help build teams that represent healthcare, technology and business and then navigate the value chains to get into the right payers, providers, hospital systems, all those areas that are potential failure points for startups," she said. "We learned from our first companies, documented those pain points and then began to evolve our process and capabilities and our network of incumbent partners to help address those so that we could decrease risk and accelerate growth."
Alongside their investments, General Catalyst, CVS Health Ventures and UPMC Enterprises will leverage Redesign's platform tools, technologies and insights to help build and support dozens of businesses addressing unmet needs in the next few years.
"The past few years have put a spotlight on where the U.S. healthcare system falls short," Hemant Taneja, CEO and managing director of General Catalyst, said in a statement.
"We share a belief with Redesign Health that we’re at a moment of critical need and opportunity for industry transformation. They’ve made remarkable progress over a short period of time, and we’re excited to work closely with them to help healthcare institutions on their digital transformation journey with our principles of responsible innovation."
"Leaders like CVS and UPMC tap into the platform and the learnings we've gathered from launching 40 companies to date. We believe this new innovation model that we're trying to build can combine the vast expertise and distribution capital that large companies like them have with the startup DNA of entrepreneurs," Lynch said.
She added, "If you look at the path from writing down an idea on a napkin to bringing a company to market, there's hundreds of different jobs to be done. A large number of those can leverage repeatable components and tools, and so we're aggregating our knowledge across the ecosystem and to build technical solutions to enable better, faster and more efficient execution."