Exclusive: Particle Health collects $25M for data sharing

Riding a wave of recent regulatory changes, patient data sharing startup Particle Health collected $25 million in Series B funding, CEO Troy Bannister tells Axios exclusively.

Why it matters: Tech giants and startups have been striving to shake up the electronic health record (EHR) industry for decades, and companies such as Particle Health are finally starting to gain traction.

Driving the news: Recent anti-data-blocking legislation — which allows patients to access their health information with apps — has reinvigorated those efforts.

• "We’re now at the precipice of the rules turning into penalties," says Bannister. "So finally there’s some teeth that should start allowing people to share their records."

Deal details: Canvas Ventures led the round with support from Menlo Ventures, Story Ventures and Pruven Capital.

• The deal more than triples Particle's valuation, which was last pegged at $52 million, according to Pitchbook.
• It brings Particle's total capital raised to $39.3 million.

Context: A handful of patient data sharing startups have gained investor attention in recent months, such as:

• PicnicHealth, which helps people gain access to medical records and partners with drugmakers to match patients with clinical trials, in June raised $60 million in Series C funding.
• PocketHealth focuses on helping patients share medical images from their records and in March raised $16 million in Series A funding.
• Flexpa lets patients share health information with the health apps of their choosing and in June raised $8.5 million in seed funding.

How it works: Based in New York, Particle makes an API that combines data from patient medical records and standardizes it to the FHIR standard for health care data exchange.

• While rivals in patient data sharing market directly to consumers, Particle's B2B model serves digital health companies and clinicians.
• Current customers include primary care company One Medical, diabetes-focused Omada Health, kidney care company Strive Health and genetics company Invitae.

By the numbers: Particle's annual recurring revenue rose 450% this year while its number of customers increased 300%, Bannister says.

What's next: Particle will use the fresh funds to grow its analytics products, help launch its partner platform, and hire more customer service and engineering staff, Bannister tells Axios.

• The company also plans to offer its tools directly to consumers, possibly as early as this fall, he adds.
• "The moment the rules and regulations allow it is the moment we start going full forward into that space," says Bannister.