Olive AI Inc. has acquired another healthcare artificial intelligence startup for $120 million, the company said, days after closing a $226 million venture capital round.
Verata Health, based in Minneapolis, makes software to automate the process of obtaining authorizations from insurance companies before a medical procedure. Adding its 60 employees, including Boston and Orlando offices, brings Columbus-based Olive close to 500 jobs nationwide, according to a news release.
Olive was valued at $1.5 billion with this week's funding round, which represented half the VC funds it's raised in seven years. The capital is being devoted to R&D and rapidly expanding market share.
The two collaborated earlier this year to combine Verata's technology with Olive's AI-powered bot that speeds up repetitive administrative drudge work in hospitals. The solution they developed cut the time to obtain a prior authorizationn by 80% and reduced claims writeoffs for hospitals by 40%.
"A broken healthcare system is one of the biggest challenges humanity faces today, and prior authorization issues in particular are costing our nation billions of dollars," Olive CEO Sean Lane said in a release. "After partnering with Verata earlier this year, we saw incredible potential for Verata's technology to reduce the amount of time and money spent on prior authorizations, and to eliminate delays in patient care."
Verata founder and CEO Dr. Jeremy Friese, a former physician executive at the Mayo Clinic, joins Olive as president for the insurance market. Dr. YiDing Yu, chief medical officer at Verata, takes the same role at Olive.
Olive is creating two divisions, payers and healthcare providers. Lori Jones, chief revenue officer, adds the role of president for the provider market.
An insurance product, Olive Assures, is among those in development over the next year. An Olive spokesman confirmed the acquisition price but said the company cannot yet comment on how the acquisition affects specific future products.
Another Columbus tech startup, PriorAuthNow, makes software for automating prior authorizations of procedures, and according to a regulatory filing raised $10 million this fall. Olive declines to comment on the company, a spokesman said.
