Startups, Health IT

Providence spinout Xealth raises $8.5 million

Seattle-based Xealth, a new startup out of Providence Health & Services, has nabbed $8.5 million in a round led by DFJ. The company’s platform lets physicians prescribe digital health content, apps and services.

Dollars funding money investment

Seattle, Washington-based Xealth has some big news to share: It has secured an $8.5 million investment in a round led by DFJ. Providence Health & Services, UPMC, Hennepin Healthcare System and Froedtert Health also participated in the funding round.

Xealth launched today as the first spinout from Providence’s Digital Innovation Group.

The startup’s platform allows physicians to prescribe digital health content, apps and services. They can also track patients’ use of such services directly from their EHR. Xealth is currently compatible with Epic’s EHR system.

“It’s a seamless workflow and provides resulting analytics, which ultimately improves recommendations on the front end for physicians,” Xealth CEO Mike McSherry told MedCity in a phone interview.

Despite leading the startup, McSherry’s background isn’t in healthcare — it’s in technology. He cofounded Swype, a mobile keyboard app that was eventually sold to Nuance. After working for Nuance for a few years, he and a few Swype team members joined Providence as executives-in-residence who were tasked with coming up with innovative ideas relating to healthcare.

“We threw spaghetti at the wall trying to figure out what we could focus on,” McSherry said. The group of executives-in-residence tossed around between 60 and 70 ideas before landing on Xealth.

After settling on the Xealth platform, the team tested it out at Providence via two use cases. The first, which launched in the winter of 2016, focused on women’s health and pregnancy, and the second, which launched early this year, centered in on advance care planning.

Providence isn’t the startup’s only customer. In 2016, after seeing a demo of what Xealth’s platform could do, UPMC also wanted to be involved.

Hennepin and Froedtert are now Xealth customers as well.

The startup isn’t the only one innovating how and what providers prescribe. Last year, Mount Sinai Health System and Icahn School of Medicine debuted RxUniverse, a platform through which physicians can prescribe apps to patients. Additionally, Sinai AppLab and Mount Sinai Innovation Partners launched a startup called Responsive Health to license the technology to other healthcare providers.

McSherry said he is familiar with RxUniverse and Responsive Health, but only as far as it relates to what’s on their websites.

“It appears in the video that they’re prescribing and recommending apps,” McSherry said of RxUniverse. “We like to say we’re applying a suite of digital services that are clinically relevant.” And in addition to apps, Xealth’s suite includes articles and patient education videos.

Looking ahead, McSherry is positive about his company’s future endeavors. “There’s a big lineup of customers that we’re in contract negotiations with,” he said. Additionally, Xealth plans to integrate with other EHR vendors.

Photo: abluecup, Getty Images