Scoop: Circulo Health prepares major layoffs

Circulo Health, an Ohio-based health tech startup, plans to lay off up to 50% of its staff this week amid a larger shift in its business plan, Axios has learned from four sources.

Why it matters: Circulo is one of a small but growing number of tech-driven health care companies focused on people who use Medicaid, a population the vast majority of digital health entrepreneurs and investors have long ignored.

Context: The Columbus, Ohio-based startup is co-founded and led by Sean Lane, who also founded and leads health care company Olive AI. Olive recently saw the departure of more than 20 high-level employees, Axios reported earlier this month.

Flashback: In January, Circulo acquired primary care startup Huddle Health.

• The following month, Circulo said it raised $50 million in Series A funding from Drive Capital, General Catalyst, Oak HC/FT and SVB Capital.
• The company currently has between 300 and 350 employees, the sources say.

What they're saying: Sources, including some current employees, say Circulo has undergone some big shifts to its business model, including shelving plans to build a Medicaid-focused insurance product.

• Instead, Circulo is now focused almost exclusively on at-home care for individuals with intellectual and developmental disabilities (IDD), the sources say.
• "The program they decided to concentrate on is IDD," one current employee tells Axios, "so in other words they put everything else aside."

Update: A Circulo spokesperson said "we do not disagree" with Axios' reporting but declined to comment further.