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BFD Expert Voices - Health Tech Deals

BFD Expert Voices

Laudio, a health care operations management software company, raised a $13 million Series B to shore up AI capabilities, CEO Russ Richmond tells Aaron exclusively.

Why it matters: Laudio automates administrative tasks — a longtime contributor to health system workforce burnout, and an initial use case for generative AI.

Details: This round was led by Define Ventures with participation from existing investors .406 Ventures, InHealth Ventures, MemorialCare Innovation Fund and TeleTracking Technologies.

"We should be cash flow positive in the next two or three years," Richmond says, noting the fundraising process took about two months.

Boston-based Laudio has raised $25 million to date.

How it works: Laudio automates repetitive work and provides frontline health care workers with recommendations and best practices.

"Unfortunately, today’s health systems are stuck in a never-ending cycle: employee turnover creates staffing crisis, which in turn costs health systems more money as they look to inefficient labor pools," says Richmond.

Its software automates tasks like employee rounding, checking with new hires, checking in on patients, assessing overtime, and doing audits on the quality of work.

One example is let's say a nurse has worked five straight shifts with newly trained employees — Laudio will pick up on this and alert the manager to reach out to that nurse, thank them, and arrange their schedule.

Laudio is used by more than 20 health systems.

What's next: "Laudio is making larger investments in its AI and analytics platform, which nudge leaders to take the right action at the right time through real-time recommendations," Richmond says.

Richmond wants to establish Laudio as the future of work within the health care space this year.

What they're saying: "Laudio is targeting the number one challenge faced by every health system and every patient in the US: clinician burnout," says A.G. Breitenstein, venture partner at Define Ventures.

"Laudio’s team, technology and deep industry leadership are best positioned by far to make the work of frontline health care staff faster, simpler and easier," he says.

The bottom line: "Clinician burnout is the top issue for every single health system in the US, and simply adding more staff is only a partial solution," Breitenstein says.

1 big thing: Laudio snags $13M Series B for automation

two medical record clipboards surrounded by circles and cutouts of money 

Pomelo Care, a virtual maternal and infant health medical practice, raised $33 million to fuel partnership expansions with major health plans, CEO Marta Bralic Kerns tells Aaron.

Why it's the BFD: The company addresses underlying risk factors to improve maternal and newborn health, increase access to care and reduce avoidable costs.

Details: Andreessen Horowitz led both funding rounds, with additional participating investors First Round Capital (who co-led the Seed round), SV Angel, Operator Partners, Allen & Company LLC and BoxGroup.

The round is broken down into $8 million in seed funding and $25 million in Series A funding.

Additional investors included Adam Boehler, managing partner of Rubicon Founders, and Puneet Singh, former chief growth officer of the diversified business group at Elevance.

How it works: Pomelo is a virtual medical practice that addresses underlying risk factors.

The company supports its patients from preconception through an infant’s first year, with personalized and proactive 24/7 care from a dedicated, multi-specialty team.

Customers include Penn Medicine, Mount Sinai Health System, Koch Industries, Elevance Health, Healthy Blue Nebraska, and Nebraska Total Care.

What's next: Pomelo is targeting expansion in Medicaid populations and rural geographies — where access is limited and outcomes desperately need improvement.

"There are still so many maternity care deserts, where people are traveling over an hour to get care," says Kerns. "Our mandate is to go where the need is the highest."

The company is well-capitalized and doesn't anticipate needing more capital for "the next couple of years," Kerns says.

What they're saying: "Our country has one of the worst mortality rates for infancy, plus there is a huge socio-economic disparity," says Vineeta Agarwala, general partner at Andreessen Horowitz.

"Pomelo's business model augments and enables the existing obstetricians, rather than try and replace them," she says, noting Pomelo focuses equally on mother and child health.

"You can’t just look at mom but you have to look at baby, too," she says. "It does not make sense to separate baby care from mom care from a patient journey perspective."

Of note: Despite spending over $100 billion on maternal health care, the U.S. has some of the highest rates of preterm birth and preventable complications in the developed world.

The bottom line: "There is not one answer across the country when it comes to value-based care," Kerns says. "We have seen lots of movement to VBC in Medicare advantage world and the next frontier will be Medicaid."

2. The BFD: Pomelo Care collects $33M for maternal and newborn VBC

Illustration of a stork carrying a red cross

Choosing a risk-based health care contract felt more like picking among a series of mystery flavors at an ice cream shop, Syntax CEO Rachael Jones learned after 25 years in the business — so she started a company to melt away the opacity.

Why it matters: Syntax raised $7.5 million in seed funding to launch publicly on Thursday, Jones tells Erin exclusively.

"In value-based care today it’s kind of like Baskin-Robbins with its 31 flavors — there are all types of arrangements and [people] enter into them without a good understanding of what they signed up for, and then 6 months later when they aren’t saving money, they lose trust," says Jones.

Driving the news: The Centers for Medicare and Medicaid in 2021 set a goal to bring all 63 million-plus Medicare beneficiaries into a value-based care model by 2030, and escalating costs are pushing even commercial providers to experiment with risk-based models.

"We see this as an opportunity to drive that growth," Jones says.

Details: Based in New York City and built at Redesign Health, Syntax is using the funds to launch, get its tools to market, and start collecting feedback from payers and providers.

Jones declined to say when the company aims to collect a Series A but said the seed funds give the company "a healthy runway."

How it works: Syntax offers a two-sided virtual workspace that lets health plans, actuaries and providers collaborate on a value-based contract design that fits parties' needs and preferences.

The company charges a per-patient, per-month fee that reflects the number of lives on health plans' value-based contracts.

The backstory: Before starting Syntax, Jones was SVP of performance analytics and quality at Cotiviti.

"At Redesign, the biggest difference is I can start something and find product-market fit very fast," Jones says of the shift to the startup world.

What they're saying: "Risk contracts aren’t super complicated, but they’re much more nuanced than fee-for-service contracts," says Syntax advisor and HVC Incentives Advisory Group senior partner François de Brantes.

De Brantes sees Syntax's model as helping to address that problem by allowing both parties to "understand the terms and conditions" of the contract, and providing "ongoing monitoring to the providers."

3. Syntax seeds $7.5M to demystify VBC contracts

Illustration of a health plus-shaped price tag with dollar signs printed on it.

While Syntax's approach is unique, it joins a growing cadre of value-based enablement companies that have attracted recent market attention.

Vytalize Health, which assists small and independent senior care practices to take on risk, in February collected $100 million.

CVS Health in March closed its $8 billion acquisition of Signify Health, which helps health systems and health plans shift to VBC arrangements with upside and downside risk-bearing contracts.

Aledade, which uses data analytics to help independent clinical practices adopt VBC models, last summer raised $123 million in Series E funding at a reported $3.1 billion valuation.

4. State of play: VBC enablement

Illustration of an overhead projector illuminating a square that says State of Play

• Carta Healthcare, an SF-based clinical data company, raised $25m in Series B funds from Memorial Hermann Health System and UnityPoint Health. https://www.carta.healthcare/

• Yuvo Health, a New York City-based administrative and managed-care tool provider for community health centers, raised $20.2m in Series A funding led by Mastry Ventures with participation from insiders AlleyCorp, AV8 Ventures and New York Ventures. New backers HLM Venture Partners, Route 66 Ventures, VamosVentures and Social Innovation Fund also joined. https://www.yuvohealth.com/

• Significo, an Austin, Tex.-based provider of personalized health recommendation API tools for digital health companies, raised $12m in Series A funds. https://www.significo.com/

• Loopback Analytics, a Dallas-based provider of analytics serving health systems and academic medical centers, received a strategic growth investment from PSG. https://www.loopbackanalytics.com/

5. Deals o' the day

• Amir Gueron left a role as VP of finance at TytoCare to become CFO of BehaVR. He joins Marc Griffin, who recently became BehaVR's chief commercial officer, and Jillian Ahrens, who was recently named the company's chief product officer.

• Michael Robin was named VP of marketing at Significo, joining newly named EVP of sales Gary Rust and director of financial planning Daniel Schuster.

• Collin Bailey, CTTO of Hudson's Bay Company, became a member of Providence Mutual's board of directors.

• Josh Rapperport, an investor at Innovation Endeavors, started a new position as a board member at RevSure AI.

 6. It's Personnel

💸 Situational awareness: Blackstone-owned physician staffing business TeamHealth reportedly received competing offers from two of its largest creditors to repay over $1 billion in debt due next year. 

🍄 Aaron's body, mind, and stomach are still on Italy time, making truffle pasta and preserving the remaining truffle into an oil.

🧡 Thanks for reading, and extra thanks to newsletter editor Claire Rychlewski and copy editor Mickey Meece. Please ask your colleagues, friends and family to sign up.

June 08, 2023

1 big thing: Laudio snags $13M Series B for automation