6 digital health funding deals this week

View original article at Modern Healthcare

Funding for digital health companies has trended downward due to a challenging economy and high interest rates. Despite this, investors are inking deals with startups.

Here were six funding deals from this week.

Yuvo Health gets $20.2 million for community health centers

Yuvo Health, which provides value-based contracting and administrative services to community health centers, secured a $20.2 million Series A round.

Cesar Herrera, CEO and co-founder, said it took about five months to raise the slightly oversubscribed round. Herrera said the company will use the funds to double its headcount by the end of the year to 50 employees, among other things. Yuvo also aims to implement its global capitation model, which reimburses community health center physicians a set amount per patient, with the company accepting full financial risk. Yuvo can deploy risk adjustment coding, data aggregation, care coordination and patient outreach services to community health centers to bring down costs.

The company has operated in New York since 2022, in seven community health centers with shared savings arrangements. Ohio is awaiting state approval, but two community health centers have already agreed to participate. 

“We are of the mindset that shared savings alone is not a sustainable revenue model or strategy for our [federally qualified health center] partners,” Herrera said. “What is sustainable is global capitation.”

The Series A round was led by venture firm Mastry Ventures with participation from AlleyCorp, AV8 Ventures and New York Ventures, HLM Venture Partners, Route 66 Ventures, VamosVentures and Social Innovation Fund. 

Former CMS appointee participates in Upperline Health’s latest round

Upperline Health, a tech-enabled chronic care startup, closed on $58 million in funding. The round was led by investment firm Crestline Investors and included investments from Adam Boehler, formerly the director at the Center for Medicare and Medicaid Innovation, and venture firm Silversmith Capital Partners.

Nashville, Tennessee-based Upperline has 122 specialty care clinics across Alabama, California, Florida, Georgia Indiana, Kentucky and Tennessee. The company treats a variety of chronic conditions through in-person and telehealth care.

The funds will be used to expand its value-based care offering through its participation in Medicare’s Accountable Care Organization REACH program. Of the company’s 350,000 patients, around 10% are enrolled in the ACO.

Pomelo Health gets $33 million for maternal health

Pomelo Health, a virtual maternal health company, raised $33 million in a joint seed and Series A funding rounds led by venture capital firm Andreessen Horowitz. The company said it will use the funds to add more health plan, employer and academic medical center customers.

Pomelo is a maternal health company that focuses on preconception through pregnancy, birth and one-year postpartum care to mothers and infants. The company uses a virtual care model that offers services ranging from nutrition and lactation to mental health.

Other investors in the rounds included venture firms First Round Capital, SV Angel, Operator Partners, Allen and Company and Box Group. They were joined by individual angel investors Boehler and Puneet Singh, a former executive at insurer Anthem.

Memorial Hermann and UnityPoint Health invest in Carta

Houston-based Memorial Hermann Health System and Des Moines, Iowa-based UnityPoint Health invested a combined $5 million in clinical data startup Carta Healthcare.

The company offers data abstraction, analytics and development of environment solutions for healthcare providers. A spokesperson said the capital will go toward scaling the company’s product development and operations.

Carta CEO Matt Hollingsworth declined to outline specific contributions from each health system.

The round follows the company’s Series B round in November 2022, which included investment from a group that included Massachusetts General Brigham and the University of Colorado Healthcare Innovation Fund as well as venture capital firms Maverick Ventures and Paramark Ventures.

Big pharma companies invest in RxLighting

The venture arms for McKesson and Novartis invested in specialty medication technology company RxLighting’s Series A round.

RxLighting has developed a platform that it says allows providers to prescribe specialty medications more eficiently. Venture firm LRVHealth led the round. Other investors included oncology-based specialty pharmacy Onco360 and venture firms Hearst Ventures and HealthX Ventures.

The investment shows the growing interest among healthcare stakeholders to develop solutions around specialty medications. Most of the treatments approved by the Food and Drug Administration in the last several years have been specialty drugs, high-cost treatments used for complex conditions.

Burnout-focused Laudio closes Series B

Laudio, an AI company that addresses burnout in healthcare, raised $13 million in a Series B funding round.

The company plans to use the funds to grow its sales team, invest in marketing and develop its AI and analytics platforms. The company said its platform offers administrators real-time recommendations on how to improve employee engagement and reduce burnout.

The round was led by Define Ventures, with support from existing investors including the MemorialCare Innovation fund, which is wholly owned by California-based MemorialCare Health System.