Wellvana Health, a physician enablement company, has closed an $84 million capital raise, it said Monday. The round brings Wellvana’s total funding to approximately $140 million.
Kyle Wailes, CEO of the Nashville, Tennessee-based startup, said the funds will be used for growth and innovation. The capital raise was led by private equity firm Heritage Group and venture capital firm Valtruis. Houston-based nonprofit Memorial Hermann Health System also participated in the funding round.
Wellvana provides data analytics, customer relationship management and population health technology to physicians and practices who are switching from fee-for-service to risk-based contracting models. It also offers practices boots-on-the-ground nursing care management services, coding assistance and more.
Most of the physicians it serves are independent, but some are employed by Wellvana itself or have come through partnerships with home-health agencies, skilled nursing facilities and health systems. The company operates in 22 states and will look for potential acquisition targets with these funds, Wailes said.
Since early 2022, digital health startups have dealt with macroeconomic headwinds and fewer opportunities to fundraise. The fourth quarter of last year saw the lowest quarterly digital health funding total since 2019. The failure of Silicon Valley Bank, which provided banking services to the digital health ecosystem, could lead to an even more challenging environment, experts say.
Wailes isn’t concerned about outside economic trends and said the company had a strong financial runway.
“Our business model does extremely well in times of macroeconomic slowdown and inflation,” Wailes said. “It's sort of a business model that's recession-proof in many ways, but also inflation-proof as well because of how value-based care works overall.”
Axios reported in November that Wellvana was seeking strategic financing alternatives. Wailes did not comment on that specific report, but he said the company started the process of raising funds for this round in December.
Wellvana's services cover around 100,000 Medicare and commercial lives through its various partnerships. It has three contracts with Medicare Accountable Care Organizations participating in the Realizing Equity, Access, and Community Health model. Wailes said half of the patients have come through the ACO Reach model.
“It’s a good program,” said Wailes, the former chief financial officer of the teledentistry company SmileDirectClub before taking over at Wellvana in January 2022. “It allows us to put more of a focus on patients with social determinants of health and how to better meet their clinical needs.”
Wellvana was founded in 2018 by Nashville-based Martin Ventures. Martin Ventures led former funding rounds with partnership from First Trust Capital Partners and Adam Boehler, who served as the first CEO of the U.S. International Development Finance Corporation under President Donald Trump.