March 15, 2023
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.
1 big thing: OpenLoop raises $15m Series A
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.