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Exclusive: Upperline Health raises $58M for specialty VBC

Illustration: Sarah Grillo/Axios

Upperline Health, a value-based specialty care provider, secured $58.35 million to grow its accountable care organization, CEO David Thorpe tells Aaron exclusively.

Why it matters: Investors see specialty care as the next logical frontier for health care's shift to a value-based care (VBC) model.

Details: This round was led by Crestline Investors and had participation from previous investors Silversmith Capital Partners and Adam Boehler, CEO of Rubicon Founders.

  • The breakdown is half debt and half equity. Crestline provided debt with Silversmith participating in the equity.
  • Funding will go toward hiring more care team members, as well as improving the way Upperline collects and analyzes patient data, Thorpe says.
  • Upperline, which has primarily grown organically, will also weigh acquisitions of other providers, he says.

What they're saying: "Despite 70% of health care providers being specialists, there has been little focus on value-based care arrangements with these physicians,” says Crestline managing director Marc Strauss.

  • Unlike Upperline's prior fundraises, "the pool of people who were first-time interested investors in VBC was smaller," Thorpe says.
  • "It was mostly folks who have been in VBC and knew the space and know the opportunity, despite fluctuations, and can tune out the white noise," he adds.

How it works: Nashville, Tennessee-based Upperline provides treatment for lower extremity injuries and conditions.

  • Founded in 2017, the company currently serves 350,000 patients.
  • There are 122 Upperline Health clinics across seven states (Alabama, California, Florida, Georgia, Indiana, Kentucky and Tennessee).
  • Care teams include advanced practice providers, physicians, care navigators, pharmacists, dietitians and social workers.

What's next: "We are EDBITA positive right now, so the runway depends on how quickly we want to grow and deploy the capital," Thorpe tells Axios.

  • "This could be the last round of funding, outside of a possible recap down the road," he adds.

Catch up quick: Silversmith invested $29.75 million in Upperline back in 2018, when the company had only eight doctors.

  • The company has raised $79 million to date.
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