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Keona Health, a Chapel Hill, N.C.-based health care software company, raised $7 million in Series A-1 funding, CEO Oakkar Oakkar tells Aaron exclusively.

Driving the news: Despite being early stage, Keona anticipates becoming cash-flow positive within a year and intends to fund its own growth from then on.

How it works: Keona's CareDesk platform is a customer relationship management (CRM) designed to simplify patient access to doctors' offices, from scheduling to telephone triage.

The software's Care 360 AI allows for dynamic branching, integration of patient 360 databases, and clinically safe automation, it says.

These features have allowed client organizations to double their provider and patient panel sizes without hiring any new staff, according to the company.

Meanwhile, Oakkar added that clients have slashed nurse training time by up to 60% and have improved call documentation by 100%.

In addition to AI-guided call support, CareDesk offers digital self-scheduling.

Digital scheduling has helped client organizations reduce call volume by 30% and boost online appointment bookings by as much as 40%, per the company.

Details: The round was led by Riverside Acceleration Capital (RAC), Riverside Company's growth capital arm.

Riverside has been working alongside Keona for three years, writing some convertible notes.

The company currently has a valuation of $26.70 million, per PitchBook.

Oakkar declined to comment further on the valuation.

What's next: Keona is about nine months away from hitting cash-flow break-even, Oakkar says.

"Companies who are rocketing right now have good financial discipline and are getting those premium valuations," Oakkar says. "We want to grow but also be disciplined at the same time."

Fresh funds will primarily go toward Keona's sales and marketing efforts, as well as adding new integrations with more electronic health records (EHRs) to its platform, Oakkar says.

Between the lines: Keona's customer base — primary and specialty care physician practices — is being consolidated at a rapid rate by private equity.

"These private practices are continually getting gobbled up by private equity and forming large-scale management services organizations — we are going after those as our go-to-market strategy because we can really help them streamline their patient access as they scale up," Oakkar says.

The MSO model centralizes all back-office functions across various doctors' offices and locations, which aligns with Keona's value proposition of streamlining patient communication, he says.

Of note: Keona serves orthopedics, women's care, urology, ophthalmology and multi-specialty groups, and plans to expand into more in the near future, Oakkar says.

State of play: There is no shortage of CRM businesses, as the fragmentation and consolidation in health care make this type of business ripe for sustained success.

hc1, an Indianapolis-based developer of a cloud-based health care relationship management personalized platforms, raised $3 million of venture funding from Claritas Capital and NWS Holdings in August of last year, per PitchBook.

Apixio, a San Mateo, California-based health care AI company that compiles and analyzes large volumes of unstructured patient information, including medical charts and physician's notes, into insights and curated data, was sold to New Mountain Capital from Centene earlier this year.

Kyruus, a Boston-based software company that provides provider search and scheduling solution, raised $35.10 million of Series E venture funding from Highland Capital Partners, Providence Ventures and Echo Health Ventures last year.

1 big thing: Keona Health collects $7M Series A-1

Illustration of a quarter as the earmuff of a woman's headset.

Pharma-focused decision analysis software provider Aily Labs added $20.7 million in Series A funds, CEO Bianca Anghelina tells Erin exclusively.

Why it's the BFD: The life science sector's opaque, manual nature results in delays in research, opening a window for startups trying to bring data and transparency to the area.

Funds will go to expanding Aily Labs' U.S. presence and honing its use of generative AI.

Anghelina declined to say when she foresees Aily raising a Series B.

How it works: The Munich, Germany-based company integrates data from various enterprise systems to help pharmaceutical companies with research and supply chain management.

For example, a pharmaceutical company running a clinical trial might license Aily's services to better understand the status of patient enrollment in various locations and to predict ideal go-to-market timing for its drug candidate.

Those insights are personalized to each member using the tool. A trial manager, for instance, could see data specific to a single trial, while a pharmaceutical company CEO could view data around the risks and opportunities across all of its trials.

"Our product can be used by a clinical trial manager and senior organization leader with everyone looking at a single source of truth and acting on the same recommendations," says Anghelina.

Catch up fast: Anghelina spent eight years leading financial planning and analysis at pharmaceutical giant Novartis before leaving to start Aily, which she had self-funded before this Series A.

🤖 One fun thing: "Aily" is short for AI laboratory.

State of play: Several startups focused on boosting transparency and automation in the life sciences have attracted financial interest of late...

Labviva, a digital marketplace for life science supplies, in March, closed a $20 million Series A.

Health care analytics company Definitive Healthcare earlier this month acquired medical insights startup Populi for $52 million in cash.

Tech-driven clinical trial startups Macro Trials and Altis Labs in June raised a collective $12 million in seed funding.

2. The BFD: Aily Labs inputs $21M for pharma analysis

Illustration of a machine claw lifting a beaker of red liquid.

TPG and Leonard Green-backed health tech Wellsky acquired Experience Care in a bid to solidify its post-acute foothold, CEO Bill Miller tells Axios.

Why it matters: The acquisition expands WellSky's investment in the long-term care market, where demand will increase as the baby boomer generation ages and care is increasingly shifted out of the hospital, Aaron writes.

Catch up quick: WellSky is backed by TPG, which recapitalized the business in 2020 and brought in new investor Leonard Green, valuing the business at north of $3 billion. 

Experience Care was formerly a division of Cantata Health but was spun out into its own brand in 2020.

By the numbers: Including Experience Care, WellSky is generating $750 million in revenue, Miller says.

What's next: This marks WellSky's 13th buy in the last six years, and the company will continue to be acquisitive, Miller notes.

"This was an important strategic add, and we are always looking and on our front foot around ways to strengthen our portfolio," he says.

How it works: WellSky provides software for over 2,000 hospitals and 130,000 providers — including blood banks, cell therapy labs, home health and hospice providers, and other post-acute operators.

Experience Care offers an electronic health record (EHR) platform serving 150 long-term care clients with 850 facilities.

What they're saying:  "The country is experiencing a silver tsunami and an aging country where there are 10,000 people turning 65 every day," Miller says.

As patients look to receive more care in the home, payers are looking for solutions that move care out of the hospital, he adds.

"There are value-based care shifts, and from our perspective, this add supports demographic and consumer trends," he says.

Of note: WellSky wanted to penetrate nursing homes and long-term care facilities sooner, but COVID slowed that effort, Miller says.

"We waited longer than we wanted to for this, but the time is right now," he said. "Experience Care is a great set of solutions that fit perfectly in our portfolio. They have great retention rates and customer NPS scores."

3. WellSky acquires Experience Care

Illustration of an elderly man in a wheelchair with a giant quarter for a wheel

Ryan Breslow promised his pharmaceutical research startup Love would revolutionize the industry, but the polemical Bolt founder's venture has instead become reminiscent of Gwyneth Paltrow's Goop, Erin writes.

Why it matters: Love made its public debut in September 2022 with the tagline "people-powered pharma." It now sells tea and soap.

Catch up quick: Named Love because it aimed to crowdsource pharmaceutical R&D, the startup last August raised $7.5 million in seed funding at a $180 million valuation from investors including Human Capital and MaC Venture Capital.

The company, which was to launch a decentralized autonomous organization (DAO) and underwrite new kinds of medical research, has yet to do either.

Zoom in: Several former Love executives have since left the company, including...

Chief medical officer Kevin Horgan, who once served as GE Healthcare's head of internal medicine diagnostics; chief regulatory officer Stacy McIntosh, the former SVP of regulatory affairs for Ridgeback Biotherapeutics; and Love chief strategy officer Karissa Paddie, Breslow's former colleague at Bolt, per LinkedIn.

This February, Tom Gong, co-founder and CTO of Chinese eCommerce giant AliExpress, became Love's chief architect, according to LinkedIn.

Love in June faced a trademark infringement lawsuit alleging it was offering goods "identical" to those of Love Wellness, a lifestyle brand founded by "The Hills" reality TV star Lauren Bosworth.

In May, Breslow told TechCrunch that Love had secured additional financing, bringing total funding to nearly $20 million.

What they're saying: As Axios reported last August, crowdsourcing feedback based on individual experiences with alternative treatments is a tricky endeavor that could result in more anecdotes than data because, unlike drugs, alternative approaches are unregulated.

"It seems they're building out a lane for alternatives, but that's a tough lane to build in," Antonio Ciaccia, a pharmacy sector analyst and the CEO of research firm 46brooklyn, told Axios at the time.

"There's a lot of room for bullsh** there. It's kind of the Wild West, and from a consumer perspective, you're very much left guessing."

Meanwhile, Breslow has been seeking investors for a new accelerator and venture capital fund, Axios' Lucinda Shen reported earlier this week.

Breslow did not respond to a request for comment.

Editor's note: This story has been corrected to note Karissa Paddie was solely chief strategy officer of Love, not co-founder.

4. Ryan Breslow's Love gets the Goop treatment

Looking for a deal story? Search the Axios Pro Deals Tracker beta.

• NextGen Healthcare (Nasdaq: NXGN), an Irvine, Calif.-based EHR/EMR company with a ~$1.2b market cap, hired Morgan Stanley to explore a sale, per Reuters. https://axios.link/3EtgIlf

• Sanuwave Health, a Suwanee, Ga.-based ultrasound and shock wave tech provider, agreed to merge with SEP Acquisition Corp. (Nasdaq: SEPA). https://axios.link/3Ea2vJy

• Questa Capital, a health care-focused venture growth firm, raised $397m for its third fund. www.questacapital.com

5. Deals o' the day

• Jennifer Becker, the former head of operations at Amazon Care, became SVP of care delivery at Omada Health. https://www.omadahealth.com/

• Michael Cuello became head of operations at CardioOne. https://www.cardioone.com/

• Jing Chai left a post as a consultant at Boston Consulting Group to become senior manager of commercial strategy at Oshi Health. https://oshihealth.com/ 

• Kurt Hammond left a post as chief growth officer at eMed Digital Healthcare to become chief commercial officer at Exo. https://www.exo.inc/

• James Banares left a post as head of people at StreamNative to become VP of people at Resilience Lab.

• Ari Kellen, a former exec with Bausch Health, joined Water Street Healthcare Partners to focus on specialty pharma investments. www.waterstreet.com

6. It's Personnel

Happy Friday Eve, Health Techies! We've got a packed newsletter for you in anticipation of our break next week.

⬛ Situational awareness: All Axios Pro newsletters will be dark from Aug. 28 to Sept. 4.

🌄 Aaron is preparing for another weekend upstate to see some old friends who've moved on from city life.

🥇 Thanks for reading, and extra thanks to newsletter editor George Moriarty and copy editor Mickey Meece Please ask your colleagues, friends, and family to sign up.

August 24, 2023

1 big thing: Keona Health collects $7M Series A-1