Startup creator Redesign Health said Thursday it raised a $175 million fund to launch new companies.
Redesign’s new fund announcement follows a tumultuous year for the company after it underwent multiple layoffs. The new funds will be used to incubate companies that address provider labor shortages, aid in the transition to value-based care and improve interoperability, said Redesign Health’s head of strategy and finance Samantha Lynch.
Related: Redesign Health cuts 77 employees
The fund includes participation from its current backers including investment firms Declaration Partners and Euclidean Capital as well as at least one new investor True North Advisors. The company declined to name any other investors.
Redesign has invested and helped launch 65 healthcare businesses including weight management company Calibrate, chronic care management company MedArrive and pediatric care company Springtide, which was acquired by Cortica in an April 2023 deal. The company has previously received funding from Pittsburgh-based University of Pittsburgh Medical Center, CVS Health Ventures and venture capital firm General Catalyst.
In the past year, Redesign has faced challenges. In October, it laid off approximately 50 employees, which followed a separate reduction of 77 employees in February.
After the October layoff, a spokesperson said the company made the mistake of scaling its team too quickly during the COVID-19 pandemic and failed to recognize the need for these additional strategic changes during its first layoff this year. The company framed the cuts as a way to deepen partnerships with health systems, while giving founders more autonomy.
It has already started to deploy capital from the new fund, which it expects to last several years, Lynch said.;
Since it launched in 2018, Redesign has received $165 million in funding for itself and raised $375 million for its portfolio companies. The company last raised $150 million for its portfolio companies in March 2021.
