The unusually large initial funding round — chief executive Rishi Shah joked it was his “seed” round — will let Outcome make its own investments in promising health care startups that complement its technology. And it will help Outcome expand its network, which gives doctors and patients information they use during office visits to make treatment decisions. The company offers one service, for example, that gives patients health information while they’re sitting in a physician’s waiting room. Other systems help physicians explain care options to the patients.
Annual health care spending in the U.S., at more than $3 trillion in 2015, accounts for 18% of the economy, according to the Centers for Medicare and Medicaid Services. Outcome provides data that tries to maximize the time doctors and patients spend interacting with the goal of improving results, for example, by getting patients to stick to medical routines such as taking medicine.
The software is generally free to medical providers. Outcome bills other health care participants such as insurance providers and drugmakers for services that use the aggregated, anonymous information Outcome gathers about patients. For example, Outcome can help drugmakers find potential subjects for clinical trials.
Combined 2016 revenue at Outcome and AccentHealth, which it acquired last year, was $180 million, Shah said. Outcome’s revenue has doubled in each of the last two years, he said.
Outcome, which changed its name from ContextMedia earlier this year, considered an initial public offering, but decided it could expand into additional doctors’ offices and countries outside the U.S. more easily as a private company. An IPO still lies ahead, but not for a few more years, Shah said.
Investors in the funding round included Goldman Sachs Investment Partners, Alphabet Inc.’s growth equity fund CapitalG, and Pritzker Group Venture Capital. After the $500 million round, Outcome will be valued at $5.5 billion, and potentially more if the funding round grows as expected.
Shah and his co-founder Shradha Agarwal, Outcome’s president, started the business in 2006 while students at Northwestern University.
— Read Google’s AI Brains Need to Work on Their Bedside Manner on ThinkAdvisor.