On December 15, Transcarent CEO Glen Tullman received a term sheet from a venture capitalist offering to invest in his digital health and benefits management startup. Less than a month later, Tullman’s company pocketed another $200 million, making the 11-month-old startup reportedly the fastest digital health company to ever achieve unicorn status. Tullman said he hadn’t planned to pursue additional investments until mid-2022.
“We were able to raise just over $200 million in record time and I couldn’t be happier about some of the new partners and existing partners we added on,” Tullman said during the annual J.P. Morgan Healthcare Conference on Wednesday.
Kinnevik and Human Capital led Transcarent’s Series C round, with participation from Ally Bridge Group and previous investors General Catalyst, GreatPoint Ventures, Threshold Ventures and Merck Global Health Innovation Fund.
New health system investors Northwell Health, Intermountain Healthcare and the Rush University Medical Center also participated and reflect the new, growing market for Transcarent, which is currently focused on providing care navigation services for 80 self-insured employers that represent 1 million covered lives. With the Series C cash, Transcarent aims to add government, labor unions and third-party administrators as customers in 2022, as well as expand its service breadth to cover new ground, like in-home care .
“We’re very interested in health systems to not only partner in providing care but as customers,” Tullman said. He added that Transcarent already counts insurers as customers and will likely have announcements about who these clients are “soon, but, by and large, we’re staying hunkered down and focused on our bread and butter, which is self-insured employers.”
Unlike most digital health companies that charge businesses a subscription fee, Transcarent offers employers three payment models–a per member per month subscription fee, a fee-for-service model or full-risk approach, where the startup pays providers upfront and partners with employers without charging them a monthly fee.
Tullman credited Transcarent’s fundraising speed with the company's flexible payment structure and his previous experience as founder of Livongo. In August 2020, Livongo and Teladoc Health announced an $18.5 billion merger, a record deal in digital health.
“What we’ve done starts with building true, trusted partnerships with members, with employers and with providers,” Tullman said. “Providers have been left out in many cases and we’re not leaving them out anymore.”