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Virtual care enabler OpenLoop raised $15 million in Series A funding and released a new revenue cycle offering, CEO Jon Lensing tells Erin exclusively.

Why it matters: As virtual care is encumbered by antiquated administrative burdens, many startups have emerged to address individual pain-points — but OpenLoop seems to offer many of those solutions in one place.

Deal details: Nava Ventures helmed the round and was joined by new backers UnityPoint Health Ventures and PrimeTime Ventures, plus insiders SpringTide Ventures and ManchesterStory.

Fast-growing OpenLoop is using the money to launch its insurance-as-a-service program, which is aimed at helping telehealth entities accept insurance.

"If companies can’t accept insurance, digital health can only scratch the surface of what it’s trying to be," says Nava Ventures founder and OpenLoop investor Freddie Martignetti.

Lensing expects the company will raise a Series B around the end of the second or third quarter. "We're very close to a profitability marker," he says.

How it works: Based in Des Moines, Iowa, OpenLoop bills itself as a one-stop-shop for virtual care companies.

Its white-labeled services span tools for e-prescribing and note charting, legal and financial support, staffing and onboarding, licensing and credentialing, scheduling and payroll, booking, payments and compliance.

The company takes a commission on its staffing products, charges an SaaS fee for its tech, and charges an RCM fee for its insurance processing services.

Flashback: The company in January acquired the medical practice group of Austin, Texas-based telehealth company Reliant to expand the depth of its clinical services.

State of play: Venture backers are rushing to power telehealth enablement startups with seed and Series A rounds. For example:

AI-powered revenue cycle service provider CodaMetrix in February collected $55 million in Series A capital.

Capable Health, maker of a plug-and-play software platform for nascent virtual care startups, last spring raised $6 million in seed funding.

Opkit, which offers an insurance verification platform for telehealth companies, this month debuted with $1 million in seed financing.

Of note: OpenLoop currently works with roughly 140 heath care clients, Lensing says.

It also recently made another acquisition of Imaging Panda, a Los Angeles-based, API-first method for clinicians to order imaging to any imaging center across the country and have the results inputted back into its electronic heath record system.

What's next: Martignetti sees OpenLoop's next challenge as continuing to diversify its client base from early-stage startups to larger and publicly traded businesses.

"That's a new chapter we're really excited to pursue," he says.

1 big thing: OpenLoop raises $15m Series A

Illustration of a phone wearing a doctor's coat and a stethoscope. 

Private equity-backed PointClickCare acquired value-based care EHR and care management platform Patient Pattern, the company tells Aaron exclusively.

Why it's the BFD: The deal helps the senior care giant build its value-based care engine as health care shifts away from fee-for-service.

Details: Hellman & Friedman and JMI Equity-backed PointClickCare — valued at $5 billion as of 2022 — declined to disclose deal terms or updated valuation details.

Patient Pattern offers care management solutions for Medicare Advantage Special Needs Plans, ACO REACH participants and PACE programs.

The company also helps practices manage fee-for-service patients in tandem with VBC frameworks, and facilitates VBC reimbursement for skilled nursing facilities.

What they're saying: "The shift to value-based care continues to accelerate each year, especially as providers are increasingly taking on more risk," says PointClickCare SVP and general manager of senior care Travis Palmquist.

"Institutional Special Needs Plans [I-SNPs] specifically, demonstrate the enormous potential of aligned value-based care models," he adds.

The deal lets PointClickCare "potentially take on more risk-bearing responsibilities, particularly with high-needs populations," Palmquist says.

By the numbers: The number of patients treated within the value-based care landscape could roughly double in the next five years, according to a recent McKinsey and Co. study.

Growth in valued-based care creates about $500 billion in enterprise value today and may be on track to reach $1 trillion as the landscape matures, the study says.

State of play: Senior-focused value-based care is booming, with several players emerging to tackle various ends of the market.

Lifespark, a senior care tech startup, was seeking $50 million in growth equity funding, Axios reported in September. 

Upward Health, an in-home primary care provider, raised a $15.8 million Series B led by Heritage Group in September.

Remote home care company Biofourmis tipped its Series D round to $320 million in August with a $20 million extension from Intel Capital.

Wellvana Health, a Martin Ventures-backed value-based care enabler, has explored strategic alternatives, Axios reported in October. 

What's next: "Acquisitions have and continue to be a key mechanism for us to accelerate PointClickCare’s vision and growth," Palmquist says, though he noted there are currently no plans for another buy.

The bottom line: "We’re focused on positively impacting the care of high-need populations, and investing in value-based care — the future of senior care — allows us to do that," Palmquist says.

2. The BFD: PointClickCare buys Patient Pattern

Illustration of binary code surrounded by abstract shapes, red crosses, and dollar elements.

Digital health founders were rocked by Silicon Valley Bank's abrupt explosion, and although the dust is settling, wariness remains.

Why it matters: Health tech startups may be facing an entirely new fundraising environment post SVB fallout, Claire writes.

What they did: Family First (FKA VillagePlan), a caregiving solution for employers and health plans, pulled its money from SVB at the first signs of trouble Thursday, CEO Evan Falchuk tells Axios.

"I hate to say it, but we had zero communication from SVB" during the height of panic, Falchuk says.

Osso VR, which offers virtual reality for surgical training, had all of its capital in SVB coffers, CEO Justin Barad tells Axios.

Barad says Osso "was in close contact with SVB" as well as its board and investors from the outset — and although wiring out funds was gummed up by system overload Monday, the company was able to get it done.

What's happening: Family First, which has raised a little over $10 million to date, moved its money to a regional bank, Falchuk says.

"You worry about it," Falchuk says, when asked about contagion. "It's hard to know what banks are safe."

To offset that fear, Falchuk and Allermi CEO Shani Bocian say they're diversifying their banking, spreading capital across a handful of entities.

"I think every founder now is pivoting to sweep accounts and diversification between multiple banks," says Bocian, whose allergy telehealth startup did not bank with SVB.

Falchuk says he's heard some founders are considering working with a custodian of assets instead of a traditional bank.

"This really was an event that went to show that the age of keeping large rounds in checking accounts is probably over," Bocian says.

What's next: VC risk appetite is about to shrink in a big way.

“Rounds are still happening, but valuations will continue to be much lower and we will continue to see less willingness from VCs to take risks," says Osso's Barad.

The bottom line: "It’s been a good opportunity to put the 'controllables' vs 'externalities' into sharp relief," says Ian Strug, chief revenue officer at clinical trial startup Virgo.

"I’d imagine VCs will be closely watching how founders chose to deal with this crisis as a metric around future fundraising," Strug says.

Aaron Weitzman contributed to this report.

3. Digital health founders talk SVB fallout 

Illustration of a person looking over the edge of a large cliff chasm shaped like a medical cross

Fire1, a remote monitoring company for chronic disease management, closed a $25 million financing round led by Andera Partners and Novo Holdings. https://axios.link/3FpCp6h 

Medwing, a German recruitment marketplace for health care workers, raised €44m in Series C funding from Northzone, Cathay Innovation, Cherry Ventures, Quadrille Capital, Atlantic Labs, Hambro Perks and SVB Capital (yup, that one). https://axios.link/3lfYZrm

Amboy Street Ventures, a VC firm focused on women’s health and sexual health for all genders, raised $20m for its debut fund. www.amboystreet.vc

4. Deals o' the day

Hims & Hers named Daniel Lieberman senior VP of mental health.

5. It's Personnel

CMS Administrator: Telehealth Flexibilities Greatly Expanded Access, But Up To Congress To Extend — MedCity News

6. Your daily dose

Illustration of a prescription with a handwritten note saying "daily dose."

Happy hump day, Health Techies! Congrats on making it halfway through this insane week.

🧑‍⚖️ Situational awareness: A hearing starts in Texas today concerning a lawsuit seeking to overturn the FDA's approval of mifepristone, used in medication abortions.

🗓️ Programming note: Join Dan Primack and Senior Deals Editor George Moriarty on Friday at 1pm ET for a subscriber-only conversation on the SVB fallout and what happens next. Register here. 

📖 Claire is tearing through Jenny Jackson's debut novel, "Pineapple Street," a send-up of NYC's millennial milieu. 

🧡 Thanks for reading, and extra thanks to newsletter editor Claire Rychlewski and copy editor Brad Bonhall. Please ask your friends, family, colleagues and travel buddies to sign up.

March 15, 2023

1 big thing: OpenLoop raises $15m Series A