When it comes to data, perhaps no other sector has as much data, divided into so many separate silos, as the healthcare industry.
Hundreds of millions of patient records are stored in various electronic health records (EHRs) managed by vendors such as Epic, Cerner, and Athena. Insurers maintain extensive data sets regarding coverage, reimbursement rates, and patient demographics. Pharmacies and laboratories provide additional data points on drug usage and diagnostic results.
Over the past decade or so, multiple companies have attempted to unify all patient data across health systems and practices, but in recent years San Francisco-based Innovaccer has taken the lead in this effort, according to various investors. It has emerged as a leading company in the field. .
Innovaccer currently counts six of the top 10 U.S. healthcare systems among its customers and is making strides in selling its platform to insurance companies, pharmaceutical companies, and government agencies.
The company already offers a suite of applications for value-based care, population health management, and customer relationship management (CRM), all built on cloud-based infrastructure.
And now, Innovaccer plans to deploy multiple AI co-pilots and agents, including an AI medical scribe, tools to simplify prior authorizations, and tools to assist with denied claims.
To support its grand ambitions to become what Innovaccer co-founder and CEO Abhinav Shashank calls a “one-stop shop for healthcare AI solutions,” the company has secured investments from B Capital Group, Banner Health, Danaher Ventures, and others. Raised $275 million in Series F from home. , Generation IM, Kaiser Permanente, M12.
Shashank said the round has both primary and secondary components, with approximately 35% of the funds allocated to provide liquidity to the company's seed and Series A investors. Despite this secondary element, this is sufficient capital to fuel Innovaccer's next phase of growth.
The company declined to disclose its latest valuation, but people familiar with the deal said it was valued at about $3.45 billion after the first round of financing. This is a slight increase from the $3.2 billion valuation Innovasser received when it raised $150 million in its previous round in late 2021, when pandemic tailwinds were still strong. The secondary transaction may have valued the company at a significant discount to the primary transaction, but the valuation could not be known.
The latest funding confirms a TechCrunch report last May that Innovaccer was in talks to raise $250 million with Kaiser Permanente as lead investor.
medical data fabric
Innovaccer was founded in 2014 with the purpose of unifying data from all types of companies. However, after three years, the company decided to start focusing solely on healthcare.
“Healthcare existed before the internet. There were no connected information structures,” Shashank told TechCrunch.
So Innovaccer set out to build its data infrastructure by connecting its platform to all major EHR systems. Shashank said the company spent about two years and more than $100 million building that connection.
It seems that his efforts have borne fruit. Innovaccer's revenue has grown 50% in each of the past five years, and the company is on track to reach $250 million in annual recurring revenue (ARR) this year.
Abhinav Shashank, co-founder and CEO of Innovaccer, said: Image credit: Innovaccer
It is unclear how many healthcare providers can compete with Innovaccer in terms of the breadth of services it offers, but the company does compete in certain niches. For example, in population health management, we compete with large companies such as Optum and Health Catalyst. In the CRM space, Salesforce is a significant competitor.
Shashank said Innovasser is eyeing an IPO, but won't seriously consider that route until ARR is between $400 million and $500 million.
The company is now serious about building a platform for AI applications on top of the infrastructure layer. Shashank hopes that customers will choose Innovaccer for all their AI needs instead of buying AI tools from different companies.
This vision resonated with investors. Rashmi Gopinath, who first invested in Innovaccer when she was managing director at M12 and is now co-founder and manager partner (also an investor) at BAM Corner Point, said the company is active in integrating AI solutions. I admired something.
“I think the rapid advances we are seeing in generative AI will provide significant tailwinds and momentum for the company,” she said.
Innovaccer plans to develop some AI solutions in-house, while partnering with or acquiring other promising AI products.
Shashank said if the company successfully executes on its vision, Innovasser has a chance to become the largest healthcare business within five years. “It was disappointing,” he added.