Just months after making its public debut, Livongo Founder Glen Tullman’s newest startup recently raised another $58 million in funding. Since Transcarent emerged from stealth in March, the startup has already raised $98 million in funding, netting it a valuation of about $500 million, according to Insider.
General Catalyst and 7wireVentures — where Tullman is a managing partner — led the series B round. Corporate ventures funds Leaps by Bayer and Merck Global Health Innovation Fund also joined as new investors.
“Rising costs in the self-insured employer space, along with the acceleration of broad adoption of virtual care due to the pandemic, have underscored the need for new and different health benefit models,” Bill Taranto, president and general partner of the Merck Global Health Innovation Fund, said in a news release.
Transcarent will use the funds to expand its service to more self-insured employers. Part of the reason for the rapid fundraise might also be chalked up to a sense of urgency as the pandemic has highlighted the importance of health benefits for these companies.
“We believe the next 18 months will define the next five years in healthcare, and much of that innovation centers around two words: experience and alignment,” Tullman said in a news release. “There’s an extraordinary amount of friction in today’s healthcare journey which makes an individual’s experience more confusing, complex, and costly than ever. Siloed point solutions and navigators don’t improve people’s experience and don’t address the lack of alignment with the true payers in healthcare – employers and the people who work for them.”
Tullman started Transcarent after selling Livongo to Teladoc last year, in a deal that valued the company at $18.5 billion. In a crowded field, he said the company is different from its competitors in that it strikes risk-sharing agreements with employers in exchange for helping their employees navigate their health benefits. Transcarent claims it has already helped a significant portion of its users reach a different diagnosis or avoid unnecessary surgeries.
For example, the startup connects employees to personal health guides, second opinions from physicians, medication review and virtual physical therapy services. It also acquired Bridge Health, a company that negotiates bundled services with surgeons and Centers of Excellence.
Photo credit: erdikocak, Getty Images