VBA, a Germantown firm specializing in cloud-based health benefits software, secured a $156 million private-equity investment led by Spectrum Equity of Boston to fund the suburban Milwaukee firm’s growth.
The sizable capital infusion will enable VBA to meet demand for its core administrative processing, user engagement and reporting solutions, according to a Tuesday press release from Spectrum Equity. Spectrum now holds a majority stake in VBA, a spokeswoman said.
Spectrum Equity is a private equity firm founded in 1994 that’s backed health care information technology companies, including Definitive Healthcare and GoodRx.
Existing VBA investor Arthur Ventures of Minneapolis, which focuses on early-stage business-to-business tech firms, also participated in the latest funding round for VBA.
VBA serves the health care payer industry with its Core Administrative Processing solution, user engagement platforms, customer support tools, population health reporting solution and data connections. The company’s cloud-based software solutions enable payers to replace legacy systems, grow their business and reduce costs, Spectrum Equity said.
VBA customers include employee benefit administrators, third-party health plan administrators and other health care payers, which can include health insurers.
The company strives to solve major challenges “at a time when increasing complexity of plan administration is straining current legacy systems,” VBA president and CEO Michael Clayton said in a press release.
“We are delighted to bring on Spectrum Equity as a partner,” Clayton said. “Their success scaling other healthcare technology and enterprise software companies will be an asset to us as VBA enters its next phase of growth.”
VBA, which stands for Virtual Benefits Administrator, is based at W180 N11711 River Lane in Germantown.
The company’s website says that it’s seeking employees for positions at its corporate office and also offers many positions that are fully remote from anywhere in the United States.
VBA's roots appear to go back to the early 2000s when it was known as KeyLink. A company called KeyLink Holdings with Clayton listed as president and CEO and the same address as VBA raised $3 million in a private stock transaction in 2022, according to an SEC filing.
Spectrum Equity executives are impressed by VBA’s innovative approach and strong customer growth and retention, said Spectrum Equity managing director Jeff Haywood.
“VBA delivers what payers need today – a smart, efficient way to administer plans with advanced technology,” Haywood said.
Spectrum Equity’s investment will go toward developing future products and solutions and ensuring VBA has the infrastructure and resources needed to support its growing customer base, said Spectrum principal Michael Radonich.
Haywood and Radonich will join the VBA board of directors.
Other Spectrum Equity investments have included Grubhub, Ease, Origami Risk, Payer Compass, Ancestry and bitly. Spectrum has sold portfolio companies to Google, Blackstone (NYSE: BX), CBOE Holdings Inc. (Nasdaq: CBOE), Mastercard and Bankrate.
