Illustration: Gabriella Turrisi/Axios
Homeward, a hybrid care startup focused on rural communities, raised $50 million in Series B funding just five months after its public debut.
Why it matters: At a time of market caution for digital health investors, it's notable to see a startup gather such a significant Series B round at this early a date.
Context: Long portrayed as a kind of easy button for health care, digital health tools are still failing to reach many of the 57 million U.S. residents in rural areas.
Deal details: ARCH Venture Partners and Human Capital led the round. Insider General Catalyst and 7wireVentures' Lee Shapiro and Glen Tullman joined.
Driving the news: Virtual care companies looking to serve rural ZIP codes recognize they face a Sisyphean task:
- Most rural residents have little to no broadband access, and there are no state or federal policies that mandate it.
- Providers must contend with unclear reimbursement and licensing requirements.
Flashback: The Biden administration last summer announced $19 million in grants for rural telehealth programs that will go toward helping local clinics overhaul their tech stack, train more providers in telemedicine, and help health systems better reach patients in rural areas.
What Homeward's CEO is saying: Value-based care is the only model that will succeed in rural communities, Homeward CEO Jennifer Schneider previously told Axios.
- Primary care has been front and center of emerging value-based care models and investment, but taking responsibility for the total cost of care is crucial when specialty care accounts for 88% of costs, she said.
- “The fee-for-service model can’t stay alive in rural (markets). There are not enough specialists,” said Schneider.
