Innovaccer aims to become an AI powerhouse in healthcare with $275M Series F

When it comes to data, perhaps no sector has as much data and as many distinct silos as healthcare.

Hundreds of millions of patient records reside within various electronic health records (EHRs) maintained by vendors such as Epic, Cerner, and Athena. Insurers maintain extensive data sets on coverage, reimbursement rates, and patient demographics. Pharmacies and laboratories contribute more data points on drug use and diagnostic results.

Over the past decade or so, many companies have tried to unify all patient data across health systems and care settings, but according to several investors, over the past few years, San Francisco-based Innovaccer has emerged as a leading player in this space. .

Innovaccer currently counts six of the top ten U.S. healthcare systems as customers, and is making strides in selling its platform to insurance companies, pharmaceutical companies, and government organizations.

The company already offers a range of applications for value-based care, population health management, and customer relationship management (CRM), all built on its cloud-based infrastructure.

Now, Innovaccer plans to offer several AI co-pilots and agents, including an AI medical clerk, a tool that streamlines prior authorizations, and another to help with denied claims.

To support its grand ambition to become what Abhinav Shashank, co-founder and CEO of Innovaccer, calls “a one-stop-shop for AI solutions in healthcare,” the company has raised a $275 million Series F from investors including B Capital Group, Banner Health, and Danaher. Ventures. Generation IM, Kaiser Permanente, and M12.

This round has both primary and secondary components: approximately 35% of the funds have been allocated to provide some liquidity to the company’s seed and Series A investors, according to Shashank. Despite this minor component, this is still enough capital to support Innovaccer’s next phase of growth.

While the company declined to disclose its latest valuation, a source familiar with the deal said the post-seed financing valuation is about $3.45 billion. This is a slight increase from $3.2 billion valuation Innovaccer gained ground when it raised its previous $150 million round in late 2021, when the tailwinds of the pandemic were still favourable. It is possible that the secondary transaction valued the company at a significant discount to the primary transaction, but this valuation cannot be learned.

The fundraising campaign confirms the TechCrunch report Since last May About Innovaccer in talks to raise $250 million with Kaiser Permanente as lead investor.

Healthcare Data Fabric

Innovaccer was founded in 2014 with the goal of unifying data All types of institutions. However, after three years, the company decided to start focusing exclusively on healthcare.

“Healthcare lived in the pre-Internet era. There was no connected fabric of information,” Shashank told TechCrunch.

So Innovaccer set out to build the data infrastructure by connecting its platform to every major electronic health record system. The company spent about two years and more than $100 million building this connection, Shashank said.

This effort appears to have paid off. Innovaccer’s revenue has increased by 50% each year over the past five years, and the company is on track to reach $250 million in annual recurring revenue (ARR) this year.

Although Innovaccer has its sights set on an IPO, the company won’t seriously consider that route until it generates between $400 million and $500 million in ARR, Shashank said.

The company is now directly focused on creating a platform for AI applications in addition to its infrastructure layer. Shashank hopes that instead of purchasing AI tools from many different companies, customers will choose Innovaccer for all their AI needs.

This vision resonated with investors. Rashmi Gopinath, who first invested in Innovaccer when she was a managing director at M12 and is now a co-founder and managing partner at BAM Corner Point (in which she is also an investor), praised the company for being proactive in integrating AI solutions.

“I believe the rapid progress we are seeing in generative AI will be a huge catalyst and momentum driver for the company,” she said.

Innovaccer plans to develop some AI solutions internally while partnering with or acquiring other promising AI products.

Shashank said that if the company executes its vision well, Innovaccer will have a chance to become the largest healthcare company within five years. “Fingers crossed,” he added.