Technology companies that help employers manage healthcare costs are seeing significant tailwinds due to the financial pressures brought on by the COVID-19 pandemic.
Carrum Health, a digital marketplace that links employer-sponsored insurance plans with surgical centers of excellence, is seeing rapid growth and nabbed a $40 million series A funding round.
The round was led by Tiger Global Management with participation from GreatPoint Ventures and Cross Creek and return investors Wildcat Venture Partners and SpringRock Ventures. Carrum Health will use this funding to expand its offerings to more employers, provide access to additional healthcare services and enhance technology to support its clients and providers, the company said.
Carrum Health developed a service that enables employers to purchase healthcare services directly from top providers for a bundled price. This approach helps employers curb rising healthcare spending at a time when surgery-related costs account for as much as 50% of expenses, with 25% of surgeries not being medically necessary, according to data from Carrum Health, the company said.
"Working with Carrum, self-insured companies can offer their employees the best care from top surgeons while effectively managing their spend. Carrum is going after a $100 billion market opportunity, and we're very excited to partner with Sach and his team," said Scott Shleifer, partner at Tiger Global Management, in a statement.
The company uses analytics to integrate data from numerous sources, including claims information, to monitor cost and quality. Using machine learning, Carrum Health identifies the people most at risk for surgery and utilizes post-discharge data collection to monitor recovery and prevent complications that contribute to readmissions.
Employees have access to a mobile application that gives them access to virtual care before, during and after surgeries.
Here's a snapshot of other health IT funding deals of $20 million or more in January:
- Digital MSK solution: Hinge Health offers a digital platform that uses wearable sensors and one-on-one health coaching to deliver in-home musculoskeletal therapy. The startup raised a massive $300 million series D round jointly led by Coatue Management and Tiger Global with participation from existing investors Atomico, Insight Partners, Quadrille, 11.2 Capital, Lead Edge Capital, Bessemer Venture Partners and Heuristic Capital.
- Teletherapy solution: Employer-focused startup Lyra Health scored $187 million in new financing as it looks to expand its digital mental health services and bring more technology to its platform. The series E financing was led by investor Addition and joined by new investors Durable Capital Partners LP, Fidelity Management & Research Company and Baillie Gifford, along with other existing investors.
- Health data infrastructure: Health technology company Color scooped up a $167 million series D financing round that now values the company at $1.5 billion. The round was led by General Catalyst and funds and accounts advised by T. Rowe Price Associates Inc. with participation from Viking Global Investors and others.
- Virtual primary care: K Health, which provides patients remote access to healthcare services through their smartphones, snapped up a $132 million series E round of funding led by GGV Capital and Valor Equity Partners. Kaiser Permanente's pension fund and LTS Investments also participated in the round as well as 14W, Max Ventures, Pico Partners, Marcy Venture Partners, Primary Venture Partners and BoxGroup.
- Disrupting primary care: Aledade, the startup company that is working to reshape primary care, banked a $100 million series D funding round. Returning investor Meritech Capital led the round, which included new growth investors Tiger Global Management and IVP along with returning investor OMERS Growth Equity.
- AI-powered cancer pathology: Paige (formerly Paige.AI), an AI-enabled diagnostic and treatment platform, got a $100 million series C round led by Casdin Capital and Johnson & Johnson Innovation. The company will use the new funding to boost its development of biomarkers as clinical applications, Fierce Biotech reported.
- Teletherapy for college students: A telehealth provider solely focused on colleges and universities, TimelyMD, closed a $60 million investment from JMI Equity. The company has experienced unprecedented growth as the demand for telemedicine and teletherapy increased exponentially during the COVID-19 pandemic. TimelyMD offers on-demand medical, immediate and scheduled mental health counseling, psychiatry and health coaching services—all designed specifically for students and offered at no cost to them, without the hassle of traditional health insurance.
- Sleep technology: Maker of AI-connected and robotics-powered beds Bryte scored $24M in series A funding led by ARCHina Capital. Additional investors include John Warnock, co-founder of Adobe, and Dave Mooring, former president of Rambus. The company is looking to license its patented restorative sleep technology as a turnkey solution and is now engaged with multiple global mattress manufacturers.
- Clinical pharmacy services: Aspen RxHealth secured a $23 million series B funding round led by Bessemer Venture Partners. Multiple strategic partners participated in this round, including Takeda Digital Ventures, dRx Capital (Novartis' Digital Venture Fund) and McKesson Ventures. Previous investors Humana and Flare Capital Partners also participated.
- Behavioral health integration: Managed care company Magellan Health backed a $20 million series B investment in NeuroFlow, a company that facilitates healthcare management for patients in between traditional office-based visits. The company’s platform aggregates mental health data and builds comprehensive patient profiles, which care teams can use to identify patterns and treatment decisions.