By Jordan Phelps
Salt Lake City-based Health Catalyst announced a $70M Series E funding round today lead by Norwest Venture Partners, a lead investor in three previous rounds, and UPMC, a healthcare provider and insurer who is also a Health Catalyst customer. Health Catalyst is a data warehousing, analytics and outcomes improvement company that plans to use the additional funding to expand their outcomes solutions product suite.
“The number of solutions that the company is being asked to help with has really expanded from our base product…to a broader solutions set that is consistent with the company’s mission,” said Dan Burton, CEO of Health Catalyst. “This new financing will help us to meet that request by expanding the breadth and depth of the solutions we provide for managing the cost and quality of care across whole populations of patients.”
With this round and past rounds raised, Health Catalyst has turned their own customers into investors in a new financial model due to the decreasing amount of venture capital funding for startups, according to Burton. Silicon Slopes companies will weather the storm of limited VC funding resources better than Silicon Valley startups due to the fact that there is more of a significant focus on business fundamentals and long-term sustainability over near-term valuations, he said.
“We are pleased to join Health Catalyst as a customer, an innovation partner, and now as an investor,” said Tal Heppenstall, Executive Vice President and Treasurer of UPMC, and President of UPMC Enterprises, the venture capital and commercialization arm of UPMC.
With the help of this new funding Health Catalyst will be more of a real-time data production and decision support company for healthcare providers instead of an offline data aggregator and analysis company. They plan to release a new suite of products including activity-based costing, care management and real-time clinical decision support this year. Currently Health Catalyst provides services to over 300 hospitals and 3,000 clinics.
“Our new products, funded by this round, will enable better, faster decisions, from the population level to the individual patient level,” said Burton. “One of the real positives of being involved in healthcare is that it’s so meaningful. We are a very mission-oriented company and the prospect of doing the work that we do which we know will result in people’s lives impacted…gets us up in the morning.”
In 2015, Health Catalyst expanded the number of patients served by its customers to over 65 million, reached 61 published outcomes improvement case studies, doubled its revenue, and increased the amount of employees from 230 to over 400. An IPO could happen as early as within the next 18 months according to Burton, but it will happen when it makes the most sense for everyone involved, not because they need the capital as their plan is to be cash sustainable by Q4 of 2016.