For startups, reaching unicorn status — a valuation at over $1 billion — is a major milestone. And with its latest funding round, Biofourmis just surpassed getting there.
The company announced Tuesday that it has raised $300 million in Series D.
The news runs counter to CB Insights’ recent findings that health tech funding, mega-round funding and unicorn valuations are down. One takeaway is that technology companies working in the home-based care space are still able to defy recent funding trends.
The investment round was led by growth equity firm General Atlantic. CVS Health (NYSE: CVS) and existing investors also participated in the round. CVS Health’s participation was particularly significant because of the experience the company brings to the table, Kuldeep Singh Rajput, CEO of Biofourmis, told Home Health Care News.
“We always are looking for partners who will enable us to get more access to patients. CVS Health does that,” he said. “Also, so far, we have been focused on hospitals, health systems and pharmas as our customers. We want to go after payers next — and CVS is an entry point.”
Biofourmis was originally founded in Singapore, and the company’s U.S. offices are headquartered out of Boston. The company leverages software and data science, along with clinical care teams, to deliver care virtually in the home.
Currently, the company has roughly 500 employees, including clinicians and data scientists.
Overall, Biofourmis plans to use the new funds to propel its next growth phase. The company plans to spread the funding towards a number of key areas.
A portion of the funds will be earmarked for scaling Biofourmis’ virtual care offerings.
“If you look at the entire continuum, from acute to post-acute to long-term chronic care — the long-term chronic care, or managing complex chronically ill patients virtually, is going to be the next scale and growth for us,” Rajput said. “Our strategy is going to be focusing on becoming a provider. This means moving away from being a turnkey solution provider, or just a technology platform, to being a true provider.”
Rajput noted that Biofourmis is currently licensed in six states and is an in-network provider with a number of health plans. The company is also creating referral networks with Medicare Advantage (MA) plans, risk-bearing primary care entities and health systems in order to co-manage patients and get them referred to its virtual specialty care.
Some of the $300 million will also go toward funding clinical trials.
“One of the differentiators of Biofourmis has been our strong clinical rigor, regulatory rigor and evidence generation,” Rajput said. “We will continue to bolster our position there by focusing on more clinical evidence, ROI generation, within our care-at-home business, as well as, fund clinical trials to advance our digital therapies.”
Again, most of all, the funding would help fuel the company’s growth efforts.
“The reason we have raised $300 million is that part of the capital would be utilized to form strategic partnerships or [advance] M&A efforts with companies that have access to patients, are nationally deployed and can enable us to penetrate more customers faster,” Rajput said.
Aside from advancing partnerships and M&A, the funding will strengthen Biofourmis’ position in the value-based care market.
“With this virtual specialty care, which we are building, for the first 12 to 18 months, we are really focusing on generating baseline data,” Rajput said. “This baseline data would enable us to start building risk-sharing models to eventually get into value-based care. General Atlantic has deep experience backing companies in value-based primary care.”
Ultimately, Rajput believes Biofourmis’ value-add is its ability to leverage data analytics, drive clinical efficiency and improve clinical outcomes.
“We have shown a reduction in care cost of almost 40% and a 70% reduction in 30-day hospital readmissions,” he said. “We continue to use our advances in data to really focus on driving better outcomes.”
Companies featured in this article:
