Home care provider DispatchHealth raises over $330 million in latest round of funding
Family medicine company DispatchHealth has raised more than $330 million in another round of funding, according to the company. In total, the financing sum since its foundation in 2013 has been well over 700 million US dollars.
The fundraising was led by Optum Ventures, with support from current investors Humana (NYSE: HUM), Oak HC/FT, Echo Health Ventures and Questa Capital. New investors included Adams Street Partners, Olayan Group, Silicon Valley Bank, Pegasus Tech Ventures and Blue Shield of California.
The borrowing was led by both Silicon Valley Bank and K2 HealthVentures.
“We’ve raised a few flags across the country over the past few years,” Mark Prather, CEO and co-founder of DispatchHealth, told Home Health Care News. “The next few years will be about expanding our entire high acuity ecosystem in each of these markets.”
The Denver-based DispatchHealth model of in-home, high-acuity care has evolved rapidly in recent years. Once focused on home emergency care, it has greatly expanded its home-based capabilities. According to the company, its services are now available to more than 75% of Medicare Advantage (MA) members nationwide.
DispatchHealth works with healthcare systems, payers, employer organizations and other healthcare providers through its medical teams trained in emergency medicine and internal medicine. In addition to treating common injuries and illnesses to avoid emergency room visits and readmissions, the company also has scales his hospital at home model over the past two years.
In addition to the home hospital, the company also has an SNF substitution model and diagnostic platform that supports labs with moderate complexity through mobile imaging, ultrasound and echocardiography.
Not only will DispatchHealth bring its full range of capabilities to all of the 50+ markets it serves in the United States, but it will also work to build a proprietary technology platform called the Last Mile Health Care Technology Platform. One of the leaders of this initiative is Daniel Graf – the chief product officer – the former vice president of products at Uber (NYSE: UBER).
“We have invested heavily in this over the past 18 months,” said Prather. “We’re essentially building this platform that will enable us to deliver the complexity of care that we deliver – everything from logistics to clinical support to coordination with others in the ecosystem.”
Finally, the company will also look for other services to add to its platform after this latest round of funding, although Prather said those services are “to be decided.”
Napkin sketch is realized
Although the company appears to have changed course recently – strengthening its capabilities and services and evolving into a homecare and critical care powerhouse – Prather said what the company is doing is becoming what it used to be should be at the beginning.
“To be honest, what we’re doing today is the original napkin sketch,” Prather said. “Today we are where we always wanted to be. We’re looking at what we’re spending the healthcare dollar on, let’s call it $4 trillion. About a third of it is on top of the building – the emergency room, the infirmary, the post-acute care unit. And we believe that we can offer this care at a lower cost and with better clinical outcomes, and that the home is the right place to do it.”
The group of investors is impressive. Among faces new and old, there is clear support for DispatchHealth’s ethos from some of the biggest names in healthcare and private equity. But there is also a clear support and understanding of the value of home care in general.
Optum Ventures certainly comes as no surprise. It is an independent venture fund owned by Optum, which is part of UnitedHealth Group (NYSE: UNH). The latter is in the process of acquiring it Healthcare Provider LHC Group Inc. (Nasdaq: LHCG). Optum Ventures was also an investor in Contessa Health, the at-home critical care provider acquired by Amedisys Inc. (Nasdaq: AMED) last year.
All investors have backed notable healthcare disruptors. For example, Echo Health Ventures supports Cityblock Health, while Oak HC/FT has supported CareBridge, a value-based solutions platform for household and community-based services.
The new investors also reflect the level of interest in home care in the United States
“Our entire syndicate is amazing,” Prather said. “That’s a great idea. And not everyone understood. The investors you see have continued investing down this path. And they really understood what we’re building and how that can be really transformative…they’re very visionary investors and we’re thrilled to have them.”
The funding news comes just weeks after DispatchHealth announced a partnership with one of the largest providers of personal home care in Home Instead.
Going forward, Prather sees home health and home care agencies as obvious partners in his company’s journey.
“We’ve always worked with Home Health,” he said. “To us, home health care is not something we do or plan to do. So if we can support in any way at home, there is usually a way to support each other.”
Aside from the group of investors and the amount of money raised, perhaps the most impressive thing about DispatchHealth is the time it took to get this together.
Amid economic uncertainty, fundraising has dried up, prompting startups in homecare — and other sectors — to make tough decisions and, in some cases, lay people off.
Meanwhile, DispatchHealth has landed more than $330 million in its latest round.
“I’m not very good at past and present, I’m always focused on the future,” Prather said. “It’s a great validation of what we’ve built and the suitability of the product for the market. But honestly, we have a lot of work to do to continue building what we believe to be a company that is quite transformative. I’m not as good at celebrating success as I probably should be, but we’re very happy about it [round] for sure.”