Outcome Health is bootstrapped no longer. And it just became the most valuable tech "unicorn" in Chicago.
Outcome Health announced Wednesday that it has raised a massive round of funding--over $500 million--in its first outside investment in the company's 11 year history. The round values Outcome Health at $5 billion pre-money, and includes investors such as Goldman Sachs Investment Partners, Google parent Alphabet's growth equity investment fund CapitalG, Leerink Transformation Partners, Pritzker Group Venture Capital, Balyasny Asset Management, and other investors.
The company says health systems and other healthcare stakeholders participated in the round.
Outcome Health, previously named ContextMedia, has been known for its fast growth, but also for the fact that it has done so without taking any venture capital. That changed in a big way Wednesday. The new funding is the biggest round of VC raised for a Chicago startup since Groupon's $950 million in 2011.
The company is well known in Chicago, but the raise puts Outcome Health on the map nationally--and across the world. With the fundraise it officially puts Outcome Health in the unicorn club (privately-held startups valued at $1 billion or more), joining Chicago's Uptake, SMS Assist, Mu Sigma, ExteNet Systems and Avant.
Outcome Health makes tablets for doctor's waiting rooms and exam rooms to help patients better understand their healthcare. The company's exam room product, Digital Anatomy Board, shows 3D anatomical diagrams that physicians can annotate during a patient's visit to help visualize his or her medical condition.
The company designs and manufactures its own hardware, which allows it to customize its products, control the supply chain and keep costs down.
Outcome Health was founded in 2006 by Rishi Shah and Shradha Agarwal. Its technology works with 231,000 healthcare providers across the US and it expects to be in 70% of all US physician practices by 2020. That growth is fueled partly by its acquisition of AccentHealth, a New York City and Tampa, FL-based maker of interactive tablets for the exam room.
This $500 million doesn't come on a whim
"This $500 million doesn't come on a whim," said Fred Hoch, the former CEO and current executive chairman of the Illinois Technology Association. "It comes from a lot of hard work and a lot of strategy over a decade."
Hoch called Outcome Health a "tentpole company" for Chicago's technology ecosystem, adding that the city needs more companies like Outcome to raise its profile as a tech city.
"As for Chicago, we need 50 of these," he said. "We need to see more of these $200, $300, $500 million rounds to showcase Chicago."
"Outcome Health and its investors share a commitment to activate the best health outcome possible for every person in the world," Shah said in a statement. "We believe achieving this at scale will require building a ubiquitous network that brings together all sides of healthcare to support patients and healthcare providers whenever, wherever and however they make critical healthcare decisions. We are grateful to have been entrusted to realize this vision by so many important stakeholders. Together, we have the opportunity to create the exam room of the future, physically and digitally, and evolve healthcare decision making from the currency of information to the currency of intelligence."
Outcome Health has grown to over 600 employees in its Chicago and New York offices. It did $130 million in revenue last year, up from $60 million in 2015 and $7 million in 2012, according to the Wall Street Journal.
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