Innovaccer aims to become the benchmark for artificial intelligence in the healthcare sector with $275 million in its Series F funding.
Innovaccer has raised $275 million in a Series F funding round, with participation from investors such as B Capital Group, Banner Health, Danaher Ventures, Generation IM, Kaiser Permanente, and M12.
The healthcare sector is characterized by managing an impressive amount of data, distributed across various silos. There are hundreds of millions of patient records stored in electronic health record systems managed by providers like Epic, Cerner, and Athena. Additionally, insurance companies possess large volumes of information about coverage, reimbursement rates, and patient demographics. Pharmacies and laboratories also contribute data on medication usage and diagnostic outcomes.
In the last decade, several companies have attempted to consolidate this data from different systems and care environments, but Innovaccer, based in San Francisco, has stood out as a key player in this space. Currently, Innovaccer counts six of the top ten health systems in the United States among its clients and is making strides in selling its platform to insurers, pharmaceutical companies, and government organizations. The company offers a variety of applications focused on value-based care, population health management, and customer relationship management (CRM), all built on its cloud infrastructure.
Recently, Innovaccer announced its intention to launch multiple co-pilots and artificial intelligence agents, including a medical scribe, a tool designed to simplify prior authorizations, and another focused on helping with denied claims. To achieve its ambitious goal of being "the comprehensive solution for AI in healthcare," according to its co-founder and CEO Abhinav Shashank, the company has raised $275 million in a Series F funding round, with participation from investors such as B Capital Group, Banner Health, Danaher Ventures, Generation IM, Kaiser Permanente, and M12.
This round includes primary and secondary components, reserving approximately 35% of the funds to provide liquidity to seed and Series A investors. Despite this secondary portion, the amount raised is sufficient to finance Innovaccer's next phase of growth. Although the company has not disclosed its latest valuation, a source close indicated that the post-investment valuation is approximately $3.45 billion, representing a slight increase from the $3.2 billion it reached in its previous $150 million round in 2021.
Founded in 2014 with the goal of unifying data across various industries, Innovaccer decided to focus exclusively on healthcare three years later. Shashank noted that the healthcare sector had operated in a pre-Internet era where information was not interconnected. To address this, Innovaccer spent two years and over $100 million building the necessary connectivity between its platform and leading electronic health record systems.
The efforts have paid off, as Innovaccer's revenue has grown by 50% annually over the last five years, and it is expected to reach $250 million in annual recurring revenue (ARR) this year. Although the company is eyeing a potential initial public offering (IPO), Shashank assures that it will not consider this path until it reaches $400-500 million in ARR. The company's current focus is on developing a platform for AI applications, hopeful that clients will choose Innovaccer to meet all their AI needs.
This vision has resonated positively among investors. Rashmi Gopinath, who initially invested in Innovaccer while serving as a director at M12, highlighted the company's proactivity in integrating AI solutions and anticipates that recent advances in generative AI will provide a significant boost to its growth. Innovaccer is in the process of developing some AI solutions internally while seeking to partner with or acquire other promising products in this space. Shashank concludes that if they execute their vision well, Innovaccer will have the opportunity to become the largest healthcare business in five years.