St. Louis Park Home Care Startup Raises $5.7M
St. Louis Park-based home health care startup HealtheMed has landed $5.7 million in a Series A raise.
Two venture capital firms from outside Minnesota led the raise: Atlanta-based Panoramic Ventures and Chicago-based OCA Ventures. Both VC firms were part of HealtheMed’s initial seed funding. Another investor based in Texas also contributed to the Series A raise, which closed on Jan. 17.
HealtheMed’s primary offering is Clinic@Home, a digital platform that essentially brings health care services into patients’ homes. Patients generally access the platform through a smart TV that’s connected to monitoring devices. The platform includes medication reminders, vitals monitoring, and access to doctors and nurses. For now, HealtheMed is focused on a niche population: Medicaid patients who qualify for a waiver that allows them to receive health services in their homes instead of a nursing facility. Generally speaking, these are individuals under the age of 65 who have developmental disabilities, chronic illnesses, or mental health concerns.
For some of these folks, going to a regular doctor’s appointment can be “a major event,” said HealtheMed CEO Tom Spencer in an interview. In his view, these individuals are not “well served by the traditional health care system.”
“Our motivation is that these people are underserved, and they need health and care benefits just like everyone else,” Spencer said.
HealtheMed president and chief operating officer Steve Pontius noted that the company is serving 180 clients today. With the recent raise in hand, the company hopes to increase that number to over 1,000.
“We’ve proven concept, and now it’s time to grow,” Pontius said. “We’ll see our install base of clients in the state of Minnesota grow substantially this year, and then we will start to look for other states to expand into.”
HealtheMed currently employs 27 people, but that figure will likely grow to over 50 by year’s end, Pontius said.
Though HealtheMed is targeting a very narrow portion of the general population, the market for home health services has certainly boomed within recent years. Insurers and providers alike have taken a keen interest in the space. Last year, for instance, health insurance giant UnitedHealth Group announced plans to spend a whopping $5.4 billion to acquire a Louisiana-based home health provider. And in fall, Allina launched a separate company dedicated to helping other health systems stand up their own at-home care programs.
Investors are evidently taking notice. To date, HealtheMed has raised about $8 million in total, Spencer said. That’s on top of about $600,000 in angel investments. “We’re thrilled to be working with HealtheMed and supporting their objectives as one of the companies in our health care tech portfolio making a significant impact,” said Panoramic Ventures partner Austin Poole in a statement. “The team is poised for success and know that their early wins will continue to drive results.”
Could Clinic@Home one day expand to other population segments? Perhaps, but it’s not an immediate priority. “We know that we have our hands full today with Medicaid-waivered clients,” Pontius said. “I think what will happen is that the market will dictate where we go next.”
For now, the company’s principal concern is enabling vulnerable populations to “rearrange their health care in a way that’s helpful to them,” Spencer said. “It’s an opportunity to help health care heal itself.”