The in-home medical company DispatchHealth has raised more than $330 million in yet another funding round, according to the company. Overall, that brings its funding total to well over $700 million since it was founded in 2013.
The equity raise was led by Optum Ventures, with support from current investors such as Humana (NYSE: HUM), Oak HC/FT, Echo Health Ventures and Questa Capital. New investors included Adams Street Partners, the Olayan Group, Silicon Valley Bank, Pegasus Tech Ventures and Blue Shield of California.
The debt raise was led by both Silicon Valley Bank and K2 HealthVentures.
“We’ve planted a few flags across the country over the last several years,” Mark Prather, the CEO and co-founder of DispatchHealth, told Home Health Care News. “The next several years will be about building out the entirety of our high-acuity ecosystem in each of those markets.”
The Denver-based DispatchHealth’s in-home, high-acuity care model has developed rapidly over the past few years. Once focused on in-home urgent care, it has significantly increased its capabilities in the home. Its services are now available to more than 75% of Medicare Advantage (MA) members across the country, according to the company.
Via its emergency medicine and internal medicine trained medical teams, DispatchHealth partners with health systems, payers, employer groups and other health care providers. In addition to treating common injuries and illnesses to avoid emergency room visits and readmissions, the company has also scaled its hospital-at-home model over the past two years.
Besides hospital at home, the company also has a SNF-substitution model and a diagnostic platform that supports moderate complexity lab through mobile imaging, ultrasonography and echocardiography.
In addition to bringing its full range of capabilities to all of the 50-plus markets it serves across the U.S., DispatchHealth will be working on building a proprietary technology platform dubbed the Last Mile Health Care Technology Platform. One of the leaders of that initiative is Daniel Graf – the chief product officer – who is the former vice president of product at Uber (NYSE: UBER).
“We have invested significantly in that over the last 18 months,” Prather said. “We’re essentially building that platform, which will allow us to deliver the complexity of care that we do deliver – everything from the logistics, to the clinical support, to the coordination with others in the ecosystem.”
Finally, the company will also be looking at other services to add to its platform after this latest funding round, though Prather said those services are still “to be decided.”
Napkin sketch coming to fruition
Though the company has seemingly changed course of late – bolstering its capabilities and services and becoming an in-home care and high-acuity care powerhouse – Prather said what the company is in the process of becoming what it was meant to be from the start.
“To be frank, what we do today is the original napkin sketch,” Prather said. “We are today where we always planned to be. We look at where we spend the health care dollar, call it $4 trillion. About a third of it is on the building – the ER, the hospital ward, the post-acute facility. And it’s our belief that we could deliver that care for lower costs and better clinical outcomes, and that the home is the right setting to do it.”
The investor group is an impressive one. Between both the new and old faces among it, there is a clear backing of DispatchHealth’s ethos by some of the largest names in health care and private equity. But also, there’s a clear backing and understanding of the value of home-based care in general.
Optum Ventures is certainly not a surprise. It is an independent venture fund of Optum, which is a part of UnitedHealth Group (NYSE: UNH). The latter is in the process of acquiring the home health provider LHC Group Inc. (Nasdaq: LHCG). Optum Ventures was also an investor in Contessa Health, the at-home high-acuity care provider acquired by Amedisys Inc. (Nasdaq: AMED) last year.
All of the investors have backed notable health care disrupters. Echo Health Ventures backs Cityblock Health, for instance, while Oak HC/FT has backed CareBridge, a value-based solutions platform for home- and community-based services.
The new investors also reflect the scope of home-based care interest in the U.S.
“Our entire syndicate is impressive,” Prather said. “This is an idea that is big. And not everyone understood it. The investors that you see have continued to invest along the way. And they’ve really understood what we’re building, and how this can truly be 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 personal home care providers in Home Instead.
Moving forward, Prather sees home health and home care agencies as obvious partners in his company’s journey.
“We’ve always partnered with home health,” he said. “Home health nursing for us, it’s not something that we do, or plan to do. And so, if we can support in any way in the home, there’s usually a way to bidirectionally support each other.”
Other than the investor group and the amount of money raised, what is perhaps most impressive from DispatchHealth is the period in which this came together.
Amid economic uncertainty, fundraising has dried up, leading startups in home-based care – and in other sectors – to make hard 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 the past and the present, I’m always focused on the future,” Prather said. “it’s a great validation of what we’ve built and the product-market fit. But frankly, we’ve got work to do to continue to build what we think is a company that’s pretty transformative. I’m not as good at celebrating successes as I probably should be, but we’re very happy about the [round] for sure.”