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Population health management software provider Welltok has raised $25 million in a growth equity round. The Denver-based company’s new Series D round constitutes the bulk of a planned $37 million investment led by Bessemer Venture Partners (BVP). The remaining $12 million is expected to be raised later this year.
Welltok is built on a simple principle: people will be more likely to take care of themselves if given tangible incentives and rewards. The company’s magnum opus is a product known as the CafeWell Health Optimization Platform, which allows health insurance plans, providers, and what are known in the healthcare industry as population health managers to give their members customized wellness programs, which are equipped with various incentives to encourage healthy behaviors. CafeWell also accounts for condition management programs and incentives for people contending with more serious and costly medical issues, such as diabetes.
[ibimage==30370==Original==none==self==ibimage_align-center]To increase accessibility, the cloud-based platform is integrable with technological devices, such as the fitness wearable FitBit, and with fitness apps like FatSecret. With this functionality, Welltok intends to give insurers and healthcare providers a simple way to measure a participating consumer’s progress.
Using the Series D gains, Chairman and CEO Jeff Margolis plans to concentrate on further developing Welltok’s technology and augmenting its marketing efforts.
"This new funding round will support our business growth and platform development," Margolis said. “We felt that raising additional funding as we head into 2015 eliminates potential distractions and accelerates execution of our business plan to provide population health managers with a Health Optimization Platform that enables healthcare consumers in their populations to achieve the highest health status at the lowest cost.”
By 2015, Welltok plans to release major updates for CafeWell, including CafeWell Concierge, which will use technology developed by IBM for the Watson supercomputer to generate on-demand recommendations based on users’ activities, interests, and health status. The product will also identify nearby health-oriented restaurants and exercise facilities for traveling users.
The Series D round is the sixth funding installment for Welltok, which has raised $73 million since its $5 million Series A round in 2011. Since appointing Margolis in April 2013, the company, which has hired nearly 120 employees since its 2008 founding, has acquired startups Mindbloom and IncentOne to improve its mobile apps and incentive programs.
It has also gained a new board member: Stephen Kraus. Kraus is a partner of BVP, the latest in a robust line of Welltok investors, including Emergence Capital Partners; InterWest Partners; New Enterprise Associates (NEA); Qualcomm Ventures; IBM's aforementioned Watson Group; and TriZetto, a multibillion-dollar healthcare IT company founded by Margolis in 1997. (Margolis sold the company to a private equity fund in 2008.)
"Welltok fits in our sweet spot of high-growth enterprise software companies that redefine industries," Kraus said in a statement. "Welltok has developed a unique solution that enables a new convergence of population health managers, consumers and the digital health market, creating the critical alignment needed to drive down costs and increase value."