Startups, Health IT, Patient Engagement

Accolade adds $70M to Series E round to expand healthcare navigation

Andreessen Horowitz led the Series E round with participation from Madrona Venture Group. It was the second part of a round that has raised more than $90 million.

Accolade screen grab

The consumerization of healthcare is kind of a shorthand way of making the task of dealing with questions about health plans and services easier and less bureaucratic. Since the Affordable Care Act was enacted payers in particular have been compelled to make themselves more approachable and user friendly to consumers. In a lot of cases, health insurers and self-insured employers are enlisting technology companies to execute that effort. Accolade is one such business.

The health IT company developed a service that is designed to support these efforts, particularly when it comes to guiding employees and health plan members through the complex choices they need to make and help them understand their options, either online or by phone.

Accolade has raised $70 million in the second part of a Series E round in a bid to expand its staff and its platform’s reach. It brings the total raised for the round since July 2015 to $92.5 million, according to a news release.

Andreessen Horowitz led the Series E round with participation from Madrona Venture Group. It marked the second part of the round which began in July last year with $22.5 million in investments from a subsidiary of Independence Health Group, the parent company of Independence Blue Cross, and McKesson Ventures. Other investors in the business include a mix of traditional venture capital firms and strategic investors: Carrick Capital Partners, Oak Hill Capital Partners, McKesson Ventures, Independence Health Group and Comcast Ventures. To date, the company has raised about $160 million, Singh said.

In a phone interview with Accolade CEO Rajeev Singh, he explained that consumers can’t be expected to remember all of their company’s health vendor relationships, so Accolade plays the role of a navigator to provide that guidance.

“We’re building out our technology platform and we’re building relationships with technology vendors to plug into our platform. Research and development will continue to drive innovation.” He said the company is also making use of machine learning for a more personalized experience.

Singh added that he plans to hire “a couple hundred” more staff.

As an example of how its service comes into play, Singh described a parent with a sick child at night considering a trip to the emergency room. Singh noted that the company’s service can steer that parent to a telemedicine vendor the company may have, but which the employee is unaware. The company’s service seeks to turn what could be a pricey medical expense into a smaller one. He added that the company has seen a growth in demand in areas such as maternity and behavioral health.

Health Advocate and CorpCare are among Accolade’s competitors, but there are plenty of companies in the business of helping employees and health plan members navigate healthcare options, particularly with an eye to reducing employers’ medical bills.

Singh took over the CEO role from Accolade Co-founder Tom Spann in November last year and Spann became COO and serves as vice chairman. Singh joined the nine-year old company from travel tech business Concur. Although Accolade’s headquarters are Plymouth Meeting in suburban Philadelphia, the company has since opened offices in Scottsdale, Arizona and, in February this year, Seattle. Singh said 800,00 customers use Accolade’s service through employers or health plans.