Verata Health, a Bloomington-based health care tech startup that uses artificial intelligence to reduce the burden of prior authorization, has been acquired by Columbus, Ohio-based AI startup Olive.
The acquisition gives Olive a foothold in the Twin Cities; the Verata Health brand will be retired in favor of Olive's brand, founder and CEO Dr. Jeremy Friese said. Verata has over 60 employees in Minnesota and Orlando, Fla., who will join Olive.
The news comes just days after Olive announced it raised $226 million and is now valued at $1.5 billion. Olive has raised $385 million since the Covid-19 pandemic began and has around 500 employees with the acquisition.
Dr. Friese will join Olive as its president, payer market, while Verata's chief medical officer, Dr. YiDing Yu, will become Olive's chief medical officer.
Terms of the deal were not disclosed, but Olive isn't done spending money in Minnesota, Friese said. The firm will look to hire locally in 2021, and its message to technologists in the Twin Cities is simple: "If you want to work for a tech unicorn, we are looking for great people," Dr. Friese said.
Dr. Friese was a physician at the Mayo Clinic before he started Verata in 2017. The startup takes aim at prior authorization, a process that health insurance companies require before they will cover a procedure. But the process is tedious and can lead to mistakes, and it's often criticized by hospital executives.
Olive and Verata partnered over the summer and found that, taken together, their solutions reduced turnaround time by as much as 80% and can save health providers billions of dollars.
"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," Sean Lane, CEO of Olive, said in a statement.
"It's a real win for both organizations," Dr. Friese said. Olive will continue to grow and will roll out new products in 2021, he said.
Those new products will focus on automating other parts of hospitals' backend, Lane told Columbus Business First on Wednesday.
"These are monumentally big moves from a product perspective. These aren’t features; they are platforms. From day one (of the company,) we want the entire health care market. We want every hospital," Lane said.
