Bethesda’s Aledade Inc. has raised $100 million in new funding — a nine-figure cherry on top of a monumental growth year in which the firm continued to take its value-based care model to new markets in the face of the Covid-19 pandemic.
The local health-tech startup said Tuesday it has closed its Series D round led by existing investor Palo Alto, California-based Meritech Capital. Another existing investor, Toronto-based OMERS Growth Equity, and new investors New York’s Tiger Global Management LLC and Menlo Park, California-based IVP also participated.
It comes less than a year after Aledade secured $64 million in Series C financing — one of the biggest local rounds of 2020 — and about two years after it closed a $56 million round in early 2019. Aledade had raised a total of about $200 million prior to the latest infusion.
The fast-growing company will use the new financing to continue expanding its value-based care model, which it helps physician practices and health clinics implement by building accountable care organizations, or ACOs. It’s also focusing on growing partnerships with Medicare Advantage plans to improve care for more seniors while adding more practices to its ACO network, the company said.
That growth will happen parallel to that of Aledade’s technology, in which it’s also investing “heavily” to “ensure primary care physicians have a world-class operating system for population health,” it said. The business plans to broaden its platform’s ability to reduce racial disparities in hypertension control, predict and prevent unexpected dialysis and more. It’s also looking to “enable even the smallest primary care practices in the country to join value-based contracts with Aledade,” the company said.
“Every other innovator in this space wants to own the doctors and be their boss. But Aledade’s team set out to prove that doctors are better caregivers and leaders in their community when they stay independent. They're happier, too,” Meritech Capital Managing Director Craig Sherman said in a statement. “When we first invested in Aledade, we believed in their theory and took a leap. Now, we're doubling down. Aledade and its network of independent primary care practices have proven they can treat patients far better and, as a bonus, raise revenue for primary care practices while simultaneously saving money.”
Aledade projects that it generated at least $185 million in revenue for 2020, when it also reached profitability, the company said to the Washington Business Journal. And Dr. Farzad Mostashari, CEO and co-founder of Aledade, said this new investor support “proves that value-based care led by independent primary care, embracing risk, is the right path forward for American health care.”
Founded in 2014, Aledade uses data analytics software to help independent doctors’ offices transition to value-based models. It now works with nearly 800 independent physician practices including 100 federally-qualified health centers — up from about 550 practices less than a year ago — and 7,800 health care providers across 31 states. Those practices have collectively saved more than $115 million, Aledade reports.
And as independent doctors’ offices have faced mounting challenges through the pandemic, demand for Aledade’s services has only grown, as independent doctors’ practices have faced mounting challenges — while, too, keeping patients out of the hospital through preventative care, the company said. Those doctors, Mostashari said in spring 2020, “are essential to bringing our health care system back from the brink in this outbreak, and putting us on solid footing in the long run.”
The company was one of the Washington Business Journal’s 25 Startups to Watch of 2017 and a DC Inno on Fire winner in 2020.
