Devoted Health, New Medicare Advantage Business, Raises $300 Million
As open enrollment for Medicare began Monday, in one of the largest healthcare company fundraises of the year, Medicare Advantage business Devoted Health says it's raised $300 million in a Series B round led by Andreessen Horowitz.
“The problem is the fact that the system itself is fundamentally not designed in a patient-centric way,” wrote cofounder Ed Park in a post on Tuesday. “People are stuck ping-ponging among an assortment of well-meaning primary care doctors, specialists, hospitals, and other facilities, resulting in a patient experience that is highly uncoordinated, fragmented, and reactive, compounded by administrative hassles that seem to emerge from every corner.”
Devoted’s answer to that problem is to become what it's calling a “payvidor,” a service that combines being a provider and payer. According to Park's blog post, that means being responsible for the full cost of member care through Medicare Advantage, partnering with health providers and also offering care services like a medical group that will make house calls to patients.
Devoted was founded last year by brothers Todd and Ed Park and Venrock venture capitalists Bryan Roberts and Bob Kocher (as founding investor), a group with years of experience in both the public and private healthcare sectors. Todd Park is a cofounder of Athenahealth, a healthcare network services firm, and Castlight Health, a healthcare price transparency company, and was the U.S. chief technology officer under President Obama. Kocher served during the Obama administration on the National Economic Council and focuses on healthcare IT investments at Venrock.
So far the company, based in Waltham, Massachusetts, has launched in eight counties in southern and central Florida. The latest round also included new investors, Premji Invest and Uprising, and previous investors such as Venrock and F-Prime Capital Partners. The funds will be used to expand operations and build out the company's technology further. Devoted had previously raised almost $70 million in seed and Series A funding. According to venture funding database Pitchbook, the company was valued at $295 million following the Series A. The company has not commented on its valuation following this funding round.
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