Outcome Health, a healthcare intelligence tech firm, has raised an outsize investment of $500 million in its first round of funding, valuing it at $5.5 billion.
The Chicago-based company, rebranded in January from ContextMedia, uses digital platforms such as TV screens and tablets in doctors’ offices to deliver health information, including that about clinical trials, to patients.
The financing round, a growth round different from a traditional Series A, as stressed by Blake Chandlee, the company’s EVP of industry solutions, is one of the largest invested in a Chicago company in recent years. A previous prominent case was a $950 million round achieved by Groupon in early 2011, shortly before it went public, noted the Chicago Tribune.
Some high-profile venture capital firms are among the investors in this round, including Goldman Sachs Investment Partners, Google parent company Alphabet’s growth equity fund CapitalG, healthcare industry-focused Leerink Transformation Partners and also-Chicago-based Pritzker Group Venture Capital.
Co-founded by current CEO Rishi Shah and President Shradha Agarwal in 2006 when both were students at Northwestern University, Outcome has now grown to serve about 20% of (or 231,000) healthcare providers in over 40,000 practices scattered in the U.S., impacting 500 million patient visits a year, the company estimated. It is steadily growing its reach by adding 1% of physicians’ offices per month on average, Chandlee said.
Part of that rapid growth can be attributed to its acquisition of its direct competitor AccentHealth last November, nabbing its service network along with its employees. Outcome now hosts more than 600 employees at offices in Chicago and the New York City. The combined revenues of Outcome and AccentHealth in 2016 exceeded $180 million, Chandlee said.
With the new financial injection, the company plans to grow its service to reach an ambitious 70% of doctors' offices by 2020, with the ultimate goal to establish “a ubiquitous presence in healthcare,” and as Shah put it, “to bring healthcare from an age of information to an age of intelligence.”
Related: ContextMedia rebranded as Outcome Health, launches clinical trial recruitment platform
Chandlee told FierceCRO that the company will also use the money to add more providers to its network, invest in product and engineering to extend the company’s product suite, and expand into additional markets and solutions offerings, just like it is doing with clinical research.
As it changed its name in January, Outcome launched a clinical trial recruitment platform incorporated in its existing hardware stationed in clinics and hospitals originally meant for drug marketing and health education. The idea is that doctors’ offices, where many potential trial participants are treated, are perfect settings for targeted distribution of trial information in specific therapeutic areas and geographic regions.
With its existing connection with almost all biopharma companies, Outcome’s clinical trial support business “is in line with expectation,” Chandlee said, adding that it is in talk with leading CROs to integrate its services.