Digital Health Strategies Inc., a D.C. startup with a technology platform to help health care clients better engage their patients, has raised its first round of funding in nearly a decade of operation.
The $1.55 million in new financing will allow the company to expand its services, beef up its leadership team and add more customers, according to co-founders and co-CEOs Ben Texter and John Simpson.
They have bootstrapped the business since its 2014 founding.
The capital comes from a handful of investors including David Schultz, founder and CEO of Albany, New York-based marketing firm MediaLogic; Tenet Healthcare alums Michael Focht and T. Dennis Jorgensen; Bob Dresing and Mark Hansan, both veterans of CareMetx, TheraCom and the Cystic Fibrosis Foundation; and Craig Goodman, former partner and chief operating officer of D.C. home health care agency Lifematters.
Schultz, who led the Series A round, will join the company’s board of directors as part of his investment, according to DHS.
The company’s chief executives hope to expand the platform’s capabilities to better identify patients who might benefit from certain treatments or services or who would be likely to donate to a hospital foundation, for instance.
The Series A won’t be the company’s last raise: The co-founders expect to land more funding in the next two to three years, Texter told me, declining to disclose specifics at this point. It's part of what they call an “aggressive growth strategy” that involves adding more health systems to its client roster, including in Greater Washington.
Digital Health licenses its software to health systems and health plans, with big names on its customer list such as Geisinger Health System and Providence Health. The tech platform runs marketing and fundraising programs to help those organizations better engage their patients, perhaps by identifying patients likely to benefit from mail-order pharmacy services or those eligible for lung cancer screenings.
The company’s flagship product, called Honor Your Caregiver, is a web application that allows patients to share stories about their care experiences, thank their care teams or donate to the hospitals’ foundations. That’s now live at more than 100 hospitals across the U.S.
DHS is now looking to expand existing programs, including for Medicare Advantage and pharmacy, Simpson said.
It’s also growing its headcount, with recent adds including a chief technology officer, chief client service officer and chief data officer. Paul Matsui, its chief data officer, is former executive director of The Advisory Board Co.’s data and analytics group and former chief strategy officer at D.C.’s Socially Determined.
In addition, the company has brought on two senior advisers: Bruce Bartoo, former chief philanthropy officer for Columbia, Maryland-based MedStar Health; and Dr. Alan London, former chairman of Cleveland Clinic Physician Group and former vice president of health system partnerships at Walgreens.
DHS, with 20 employees, is now hiring for another eight positions across sales, engineering and marketing roles, among others.
Simpson and Texter co-founded Digital Health Strategies after working at Brooklyn, New York’s Blue State, the digital engagement agency that supported Barack Obama’s 2008 and 2012 presidential campaigns. They said they’ve put about $1 million into DHS over the past 10 years.
They declined to disclose annual revenue, but said it’s grown an average of 39% each year since 2014. Many investors use that metric, known as the compound annual growth rate, to measure growth over time.
The company, which its co-founders said has been profitable since its inception, landed a slot this year at No. 3,999 on the Inc. 5000 list of fastest-growing private companies in America.
