Scoop: Commons Clinic clinches $11M for specialty care
Looking to build the One Medical for specialty care, Los Angeles-based Commons Clinic has raised $11 million in seed funding, CEO Nick Aubin confirmed to Axios.
Why it matters: Commons' potential value-add is helping people avoid costly hospital or emergency room visits associated with specialty conditions such as musculoskeletal (MSK) issues, which is the company's current focus area.
Deal details: Vast Ventures led the round and Oxeon Partners participated.
- Commons plans to raise a Series A in the first quarter of next year, Aubin says.
Context: During the pandemic, venture investors poured capital into a handful of virtual MSK companies, but several players are now looking to create a hybrid physical therapy experience. For example:
- In-personal physical therapy clinic operator Bardavon in June acquired virtual-first MSK startup PeerWell for 8 figures, the parties told Axios exclusively.
- Virtual MSK provider Sword in November 2021 clinched $189 million in Series D capital steered by Sapphire Ventures at a valuation of $1.8 billion.
- Hinge Health, another digital MSK company, in October 2021 soared to a $6.2 billion valuation after raising $600 million in Series E funding led by Coatue and Tiger Global.
How it works: Commons has been quietly building a physician group by acquiring small local practices. It then partners with independent local in-person facilities and sets up what Aubin calls a "Clear-style airport experience" to guide patients through care while integrating virtual forms of physical therapy.
- "To compete with the UCLAs and the Sutters of the world, you have to own the full stack," Aubin says.
The other side: The challenge for Commons is showing it can compete with the powerful incumbents by carving out its own niche and persuading enough people to pay for its services.
- "Nobody out there has really put this all together yet," Benjamin Schwartz, an orthopedic surgeon and investor in Commons, tells Axios.
- Commons is currently working with several employers including Home Depot and Target.
One fun thing: Aubin wrote the company's first pitch deck on his phone in April 2021 after watching hospitals throughout the Los Angeles area pause elective surgeries as their rooms filled with COVID-19 patients.
- "That was an aha! moment for me, realizing elective surgeries are key to maintaining that hospital-industrial complex," Aubin says. "Patients don't want to go to hospitals for this care anymore."
What's next: Aubin hopes to see Commons as a well-established ambulatory health system in five to eight major markets within the next decade.
- Beyond MSK, other areas he's considering for potential expansion include cardiology, urology, gastroenterology and surgical gynecology.
- "I’m in the business of taking cost out of less efficient systems," Aubin tells Axios. "If you’re not hurting hospital systems, you’re not swinging big enough."