Wellvana Health receives $84 million from Memorial Hermann Health, Valtruis

Wellvana Health, a health care provider, announced Monday that it has raised $84 million in capital. This round brought Wellvana’s total funding to approximately $140 million.

Kyle Wales, CEO of the Nashville, Tennessee-based startup, said the funds will be used for growth and innovation. Capital raising was led by private equity firm Heritage Group and venture capital firm Valtruis. The Houston-based nonprofit Memorial Hermann Health System also took part in the funding round.

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Wellvana provides data analytics, customer relationship management, and healthcare technologies for physicians and practitioners who are moving from fee-for-service models to risk-based contracting models. It also offers hands-on on-site nursing management services, coding assistance, and more.

Most of the doctors she serves are independent, but some are employed by Wellvana itself or have partnered with home care agencies, skilled care facilities, and health care systems. The company operates in 22 states and will look for potential acquisition targets with the funds, Wales said.

Since early 2022, digital health startups have faced macroeconomic headwinds and fewer fundraising opportunities. The fourth quarter of last year saw the lowest quarterly digital health funding since 2019. The collapse of the Silicon Valley bankwhich provided banking services to the digital health ecosystem, could lead to an even more complex environment, experts say.

Wales is unfazed by external economic issues and said the company has a strong financial runway.

“Our business model works very well in times of macroeconomic recession and inflation,” Wales said. “It’s kind of a business model that is in many ways recession-resistant, but also inflation-resistant because of how value-based care generally works.”

In November, Axios reported that Wellvana was looking into alternatives to strategic financing. Wales did not comment on the specific report, but said the company began the fundraising process for the round in December.

Wellvana services cover nearly 100,000 medical and commercial lives through various partnerships. He has three contracts with Medicare Accountable Care Organizations participating in the Realizing Equity, Access, and Community Health model. Wales said half of the patients went through the ACO Reach model.

“This is a good program,” said Wales, former CFO of teledentist company SmileDirectClub, before taking over Wellvana in January 2022. “It allows us to focus more on patients with social determinants of health and how to better meet their clinical needs.”

Wellvana was founded in 2018 by Nashville-based Martin Ventures. Martin Ventures led previous funding rounds in partnership with First Trust Capital Partners and Adam Boler, who was the first CEO of the US International Development Finance Corporation under President Donald Trump.

This story first appeared in Digital Health Business & Technology.