Exclusive: Karoo Health seeds $3M for value-based heart care

Karoo Health, an Albuquerque, New Mexico-based value-based heart care company, raised $3.4 million in seed funding, CEO Ian Koons tells Axios exclusively.

Why it matters: Heart disease is the nation's leading cause of death, and cardiology care is the largest driver of U.S. health care spending.

Details: First Trust Capital Partners led the round.

• New backers GoGlobal and Inflect Health joined along with previous investors Panoramic Ventures, FirstMile Ventures and several individual backers.
• Funds will be funneled into Karoo's launch on June 19 as well as supporting partnerships with health plans and systems and honing its technology, Koons says.
• Koons envisions the company raising a Series A of between $15 million and $25 million early next year.

How it works: Karoo supports patients on-site and virtually and contracts with cardiology practices, health systems and health plans to share in per-patient, per-month savings.

• The company's core aim is preventing emergency room admissions with low-touch interventions such as nutrition support and daily weigh-ins.
• Karoo's tech also provides insight into clinician performance, and the company shares in cardiologists’ bonuses. "We're only successful if they’re successful," says Koons.

Of note: The company plans to bill providers on a fee-for-service basis for the first six to nine months, track progress, and transition to value-based contracts starting Jan. 1, 2024.

• "It’s a pragmatic way to get started and help these patients now," Koons says.
• Karoo stands out from its peers by offering not just a portion of heart care but rather wraparound services, according to Koons.

What's happening: The company is currently partnered with 100 providers including 75 cardiologists in Arizona and New Mexico.

• Koons aims for the company to be in five states by year's end.

State of play: An aging population combined with patient and provider interest in shifting cardiac procedures to lower-cost care settings is underwriting growth in demand for remote and home-based cardiac companies.

• Remote patient monitoring company Hello Heart last summer amassed $70 million in Series D funds.
• Virtual heart health management startup Moving Analytics last summer pulled in $20 million in Series A funding.
• Wearable heart failure detection technology developer Cardiosense last winter raised $15 million in Series A capital.

What he's saying: Koons was inspired to start Karoo after his best friend passed away at age 29 after a heart attack — and although almost a decade has passed, Koons says the work continues to remain "super personal."

• "This couldn't save my friend’s life, but I’d love to be able to say we helped save your mother or father or best friend from this preventable issue," Koons says.