When it comes to data, perhaps no sector has more and more of it in such distinct silos as the healthcare industry.
Various electronic health records (EHRs) maintained by vendors such as Epic, Cerner, and Athena contain millions of patient records. Insurance companies keep extensive data sets on coverage, reimbursement rates and patient demographics. Pharmacies and laboratories contribute more data points on drug use and diagnostic results.
Over the past decade or so, multiple companies have tried to consolidate all that patient data across health systems and care settings, but in the past few years, San Francisco-based Innovaser has emerged as a leading player in the space, according to various investors. .
Innovaccer currently counts six of the top ten healthcare systems in the US as customers and is making progress in selling its platform to insurers, pharmaceuticals and government agencies.
The company already offers a suite of applications for value-based care, population health management, and customer relationship management (CRM), all built on its cloud-based infrastructure.
And now, Innovaccer plans to introduce multiple AI co-pilots and agents, including an AI medical scribe, a tool that facilitates prior approvals, and another to assist with denied claims.
The company has raised $275 million in Series F funding from investors including B Capital Group, Banner Health, Danaher Ventures to support what Innovaccer co-founder and CEO Abhinav Shashank calls “a one-stop shop for healthcare AI solutions.” . , Generation IM, Kaiser Permanente, and M12.
This round has both primary and secondary components: According to Shashank, about 35% of the funding is allocated to provide some liquidity to the company's seed and Series A investors. Despite this minor component, it's still enough capital for Innovacar's next-stage growth.
While the company declined to disclose its latest valuation, a source familiar with the deal said the initial funding's post-money valuation is around $3.45 billion. A slight uptick from that $3.2 billion valuation Innovaccer raised its previous round of $150 million in late 2021, when pandemic tailwinds were still favorable. The secondary transaction likely valued the company at a significant discount to the primary, but that valuation could not be learned.
The fundraising confirms TechCrunch's report Since last May Innovaccer is in talks to raise $250 million with Kaiser Permanente as a lead investor.
The Information Fabric of Healthcare
Innovaccer was founded in 2014 with the goal of aggregating data All types of initiatives. However, after three years, the company decided to start focusing exclusively on healthcare.
“Healthcare lived in a pre-internet era. There was no connected fabric of information that existed,” Shashank told TechCrunch.
So Innovaccer began building the data infrastructure by connecting its platform to every major EHR system. The company spent about two years and more than $100 million making that connection, Shawshank said.
That effort appears to have paid off. Innovasser's revenue has grown 50% per year for the past five years, and the company is on track to hit $250 million in annual recurring revenue (ARR) this year.
Shashank said that while Innovasa has its eyes on an IPO, the company won't seriously consider that route until it generates $400 million to $500 million in ARR.
The company is now focused on building a platform for AI applications on top of its infrastructure layer. Shashank hopes that instead of buying AI tools from different companies, customers will choose Innovaccer for all their AI needs.
This vision has resonated among investors. Rashmi Gopinath, who first invested in Innovaccer when she was a managing director at M12 and is now a co-founder and managing partner (also an investor) at BAM Corner Point, praised the company for being proactive in integrating AI solutions.
“I think the rapid advances we're seeing in generative AI are going to be a huge tailwind and momentum driver for the company,” he said.
Innovaccer plans to develop some AI solutions internally while partnering with or acquiring other promising AI products.
Shashank said that if the company executes its vision well, Innovaccer will have a chance to become the largest healthcare business within five years. “Fingers crossed,” he added.