Tech-enabled Medicare Advantage startup Devoted Health is closing out 2023 with $175 million in fresh funding, marking one of the largest funding rounds of the year.
The series E round was led by a lead syndicate composed of The Space Between (TSB), Highbury Holdings, GIC, Stardust Equity, Maverick Ventures, and Fearless Ventures, according to a company press release. Returning investors Andreessen Horowitz and General Catalyst backed the round along with other investors including GreatPoint Ventures, Socium Ventures, Emerson Collective, The Private Shares Fund and affiliated funds and F-Prime Capital Partners.
The all-equity deal will help support Devoted Health's growth plans, a spokesperson said.
Devoted Health banked a $1.15 billion series D funding round two years ago in October 2021.
The series E round values the startup at $12.87 billion, according to a source close to the deal. Devoted Health's post-money valuation after the series D round was $12.7 billion.
The company, which was founded in 2017 by brothers Todd and Ed Park, says it provides "all-in-one" care for older Americans by combining Medicare Advantage coverage with its virtual and in-home care provider, Devoted Medical, as well as partnerships with leading providers.
Devoted Medical is a virtual-first and in-home medical group.
“In a healthcare system that isn’t always accessible or easy to navigate, we at Devoted Health are profoundly honored to provide each member with the same quality of care and service we’d want for our own families,” Ed Park, company CEO, said in a statement. “It’s deeply gratifying to have so many others believe in the promise of our model, and we’re very excited to bring the love and world-class care that is Devoted to more and more Americans.”
Devoted Health also provides full-service "guides," who help navigate each member through their healthcare journey. The company also built a proprietary technology platform, called Orinoco, to support payer and healthcare provider operations in a highly integrated way.
The new funding round followed a year of rapid growth for Devoted Health, which serves over 140,000 members as of December 2023, reflecting year-over-year growth of more than 70%, according to the company.
Devoted Health also expanded its services to serve a total of 299 counties across 13 states during this year’s Medicare Annual enrollment period.
The company also touted its Medicare Advantage Star ratings, noting overall MA Star ratings awarded by CMS to Devoted Health increased across the company’s membership in Star-eligible plans to 4.6, with 94% of all Devoted members in Star-eligible plans enrolled in a 4 Star, 4.5 Star, or 5 Star plan.
The company also claims its tech-enabled preventative care services help to improve patient outcomes. At least 83% of members with diabetes report having their HbA1c under control and at least 80% of members with hypertension have gotten their blood pressure under control, according to the company.
While overall health tech funding cooled down this year as investors wrote smaller checks and focused on early-stage startups, there were some companies that nabbed hefty checks. Among the larger funding rounds this year, value-based care company Main Street Health picked up more than $315 million in new capital.
In January, ShiftKey, a healthcare staffing technology company, scored $300 million, bringing its valuation to more than $2 billion. ShiftMed, a mobile app that connects healthcare workers and providers, clinched $200 million in fresh funding to fuel its growth. Boston-based Arcadia, which offers health data aggregation and analysis software for providers, payers and life science companies, picked up $125 million in April.