Devoted, a Waltham, Massachusetts-based company that uses technology to blend health insurance with provider services, announced yesterday that it has landed a staggering $300 million Series B investment and is now enrolling Medicare beneficiaries living in eight southern and central Florida counties. The funding round was led by Andreessen Horowitz, with Premji Invest and Uprising also joining the company’s existing backers.
Devoted was founded last year by CEO Todd Park, who previously cofounded both Athenahealth and Castlight Health and later served as the Obama administration’s chief technology officer, and his brother Ed Park, who also held top positions at Athenahealth. Billing itself as a “payvidor,” the Medicare Advantage plan partners with primary care physicians and other provider services to link its members to care. In addition, Devoted offers a suite of support tools and services for its members, such as house calls for those in need and health guides to support health system navigation.
Including all of these within a single ecosystem required the company to build “a unified consumer-grade technology platform” capable of handling all the necessary logistics, Ed Park explained in a recent blog post accompanying the funding announcement.
“Crucially, we are building our system to not only support what we already know we need to do, but also with the inherent flexibility and power to add all of the things we know we will discover are terrific ideas to implement as we relentlessly pursue the cause of ever better patient care," Ed Park wrote in the post. "Our goal is to iterate our platform at 100x the speed of legacy health care software, which will enable us to rapidly evolve to ever better serve the needs of our members.”
Why it matters
Outside of Devoted’s big names — which also include former US Chief Data Scientist DJ Patil, former Wayfair and Athenahealth Chief Technology Officer Jeremy Delinsky, former Obama administration healthcare and economic advisor Dr. Bob Kocher, among others — yesterday’s news represents investors’ continued bet on hybrid, tech-supported insurance plans. As healthcare continues to delve deeper into value-based care and consumer-friendly offerings, such ventures are promising a more comprehensive approach for patients seeking convenient and low-cost care.
"More than 10,000 Americans are turning 65 every day, and they are entering a health care system that is not just confusing and complicated, but also often cold and impersonal," Vijay Pande, partner at Andreessen Horowitz, who will be joining Devoted’s board, said in a statement. "We believe that the Devoted Health team has the experience and expertise to drive truly meaningful and scalable change in how health care is financed and delivered — from payment models to the patient experience and the technology needed to make it happen. They are creating the next great health care company, and we are very excited to be joining the team."
What’s the trend
The Parks’ prior health insurance project has seen its ups and downs as of late. Earlier this year, Athenahealth face and founder, CEO Jonathan Bush, left the company following negative reports of sexual harassment, which left the board to consider “strategic alternatives” regarding an apparent takeover. The months since have led to something of a bidding war for the company, with several potential buyers expressing interest as the company’s revenue and earnings rise.
Prior to this round, Devoted raised $7.4 million in early funding and seed investment from Venrock and its cofounders during Q2 2017, and later that year concluded a $61.95 million Series A that also included participation from OakHC/FT, F-Prime Capital Partners, Maverick Ventures and Obvious Ventures.