Valence Health, a Chicago-based provider of population-health consulting services and software tools, has raised $15 million through a growth-equity investment.
The financing round marks the second time the company has added new investors in its 20-year history. It previously raised $30 million in 2012.
Valence's growth has accelerated (PDF) during the past three years. Its revenues for the first half of 2014 increased 51% over the same period last year, according to the company, without disclosing financial specifics.
The company has 75 clients that are exclusively provider organizations, said CEO Phil Kamp. Ten clients have signed since January.
Its business lines include financial and actuarial software, cost and quality analytics, and consulting services to tailor population-health strategies based on a provider's payer mix.
“The market is expanding significantly in the space that we're in,” Kamp said. “The investors are very open. They see a huge opportunity in this space.”
Health systems are moving toward population health at different speeds, he added. Some providers are making the investment but aren't yet seeing a material amount of revenue from risk-based contracts. Others, such as academic medical centers, are resisting the changes. And still others, such as children's hospitals, are far ahead on adopting risk-based payment models because as much as 50% of their revenue might be coming from Medicaid and Medicaid managed care.
“You see children's hospitals, as an example, becoming health plans,” Kamp said.
Valence plans to use the funds to expand staff, boost its sales and marketing efforts and add new features and functionality, such as programs that focus on children with complex health needs.
The company already has added more than 150 employees this year and is moving to a new Chicago headquarters.
Heritage Group, a Nashville-based venture capital firm, led the financing round, which also included new investors Foundation Medical Partners and GE Ventures along with existing investor North Bridge Growth Equity.
Follow Beth Kutscher on Twitter: @MHbkutscher