A local company raised an eight-figure chunk of financing as it bolsters its efficiency and scalability.
Centivo, a business that aims to make high-quality health care more affordable for employers and employees, recently announced it has secured a $75 million raise. The funding is about two-thirds venture debt and one-third equity, according to Ashok Subramanian, CEO and co-founder.
“There’s a lot to build and a lot to grow and a lot of continued impact we can have on health care affordability,” he said.
The financing, which is the Buffalo startup community's largest total of the year so far, included existing investors B Capital, Cox Enterprises, F Prime, Ingleside Investors and Morgan Health, a division of JPMorgan Chase, as well as new strategic investors and provider partners Cone Health Ventures and Memorial Care Innovation Fund.
The latter two have worked for years with Centivo and recently joined on the investment side.
Venture debt is being provided by ongoing banking partner JPMorgan Chase and new partner Trinity Capital.
Centivo is moving late this month from the University at Buffalo Downtown Gateway building to 199 Scott St., Buffalo. After acquiring New York City-based Eden Health earlier this year, the company employs 356, with 110 based in Western New York.
Subramanian plans to use the funding to:
- Enhance and scale Centivo’s product and technology, such as fully integrating the experience between virtual care patients and health plan members and boosting operational efficiency.
- Invest in growth capacity, both sales and marketing. That includes adding people in existing markets as well as adding selectively to new markets.
- Forge new strategic partnerships with health systems
The company has grown year-over-year revenue by more than 80% over the last two years.
Since it was founded in 2017, the business has raised $225 million in debt and equity, but Subramanian said ironically that’s been largely due to operating in a capital efficient way.
“The less we use, the better,” he said. “It’s easier to raise money if you consume less money. … That ends up being attractive to those who want to put money to work.”
Centivo is also targeting to alleviate a large problem and can show the impact of its growth.
Nearly eight out of every 10 Americans access health care through their employers. Meanwhile, health care costs continue to rise and in 2023 Centivo’s health plans reduced member out-of-pocket costs by 71% compared to the plans they replaced, according to a press release.
Startups can target different-sized markets, but they need to calibrate their capital consumption and their paths to get there, he said. There are different solutions and approaches for different problems.
“It’s ultimately not about the amount raised,” Subramanian said. “It’s the impact we have on people’s lives. … I’m proud of what we’ve done. We have lots left to do.”
Centivo is the 14th local company to announce the closing of a private, growth-oriented round of funding this year. The list includes Aille Design ($100,000), Strideful ($100,000), EmergenceTek Group ($100,000), Circular.eco ($100,000), Immersed Games ($100,000), Edenesque ($175,000), TeleSafety ($230,000), Top Seedz ($750,000), SelectFI ($4.5 million), MimiVax ($5.8 million), PostProcess Technologies ($17.7 million), Ognomy ($6.8 million), CleanFiber ($28 million) and Centivo ($75 million).
Correction: A previous version of this story incorrectly labeled the type of funding round. This story has been updated to reflect the correct type of financing.
