Just months after making its public debut, Livongo Founder Glen Tullman’s newest startup recently raised another $58 million in funding. Since Transcarent emerged from stealth in March, the startup has already raised $98 million in funding, netting it a valuation of about $500 million, according to Insider.
General Catalyst and 7wireVentures — where Tullman is a managing partner — led the series B round. Corporate ventures funds Leaps by Bayer and Merck Global Health Innovation Fund also joined as new investors.
“Rising costs in the self-insured employer space, along with the acceleration of broad adoption of virtual care due to the pandemic, have underscored the need for new and different health benefit models,” Bill Taranto, president and general partner of the Merck Global Health Innovation Fund, said in a news release.
Transcarent will use the funds to expand its service to more self-insured employers. It currently has more than 1 million members and more than 100 employers as clients, some of which it got through its acquisition of BridgeHealth, a company that negotiates bundled services with surgeons and Centers of Excellence.
Moving forward, the company will focus on bringing together digital health solutions and making healthcare easier for patients to navigate. In some cases, that will mean integrations with partners, and in other cases, it will mean acquisitions, Tullman wrote in an emailed statement.
“Given the market response to Transcarent’s offering and approach, we will be further along after one year than Livongo was after three years,” he wrote.
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
Tullman started Transcarent after selling Livongo to Teladoc last year, in a deal that valued the company at $18.5 billion.
In a crowded field, he said the company is different from its competitors in that it strikes risk-sharing agreements with employers in exchange for helping their employees navigate their health benefits. For example, the startup connects employees to personal health guides, second opinions from physicians, medication review and virtual physical therapy services.
“We believe the next 18 months will define the next five years in healthcare, and much of that innovation centers around two words: experience and alignment,” he said in a news release. “There’s an extraordinary amount of friction in today’s healthcare journey which makes an individual’s experience more confusing, complex, and costly than ever. Siloed point solutions and navigators don’t improve people’s experience and don’t address the lack of alignment with the true payers in healthcare – employers and the people who work for them.”
Photo credit: erdikocak, Getty Images
