Health care revenue cycle automation company Adonis raised a $31 million Series B led by Point72 Private Investments, CEO Akash Magoon tells Axios exclusively.
Why it's the BFD: Financially strained hospitals are keen to deploy new billing and automation tools to alleviate workforce burdens and boost efficiency.
Zoom in: New investor Kin Ventures joined the round alongside existing backers General Catalyst, Bling Capital and Max Ventures.
- Funds will go toward hiring (Adonis employs roughly 55 people and aims to reach 80 by the end of the year).
- Magoon foresees Adonis raising again in the next 12–36 months, adding that while the company's 2023 Series A was intended to last three years, high demand inspired the current raise.
- Adonis is not profitable, per Magoon. "We're tracking growth more than profitability and our board and investors are very much in line with that thesis," he says.
How it works: The New York City-based company automates roughly 90% of claims, per Magoon. The company uses a human-in-the-loop model where hospitals' existing staff can focus on the more acute details that its software is not able to automate.
- Adonis tracks outcomes including net collection rate, denials, and accounts receivable timelines, the latter of which Magoon says Adonis reduces from about 75 days to 25–30 days.
- Customers include Apollo MD, US Dermatology Partners, Brightside Health, Rippl Care and RubiconMD.
Flashback: Adonis last summer collected a $17.3 million Series A, bringing total funding to $54 million since the company's 2022 founding and $5.6 million seed raise.
What they're saying: "When [Adonis] can analyze a provider's data and say, 'Hey, here's how much money you're leaving on the table,' it becomes almost a natural sale and it's worked really well," says Point72 managing partner Sri Chandrasekar.
The big picture: The deal is at least the fifth health care finance automation transaction this year.
- It follows raises from health care administration startup Anterior and prior auth automation companies Cohere and Humata Health and an IPO from health payments software company Waystar.
- At a recent panel at Aspen Ideas Health, Lux Capital partner Deena Shakir called such "picks and shovels" players a "multibillion-dollar" opportunity.
Between the lines: Health care providers cited revenue cycle management as a top investment priority for 2024 in a fall 2023 Bain & Company and KLAS report.
- They anticipated investments across a broad set of subsectors including revenue integrity, charge capture and complex claims.
State of play: Hospitals now have a plethora of venture-backed and legacy options to choose from when it comes to revenue cycle automation tools.
- Revenue cycle management tool provider Sift Healthcare in May raised a $20 million Series B.
- AI-powered revenue cycle service provider CodaMetrix in March collected a $40 million Series B.
- Automation-driven medical coding company Fathom in 2022 pulled in a $46 million Series B.
