SonarMD Secures $10 Million Series A Funding to Expand Clinical Talent and Advance Value-Based Care Platform

VCBeat (WeChat ID: vcbeat) has learned that on December 17, SonarMD, a U.S.-based healthcare management company, announced it had secured $10 million in Series A financing. The round was jointly led by healthcare investors Blue Cross Blue Shield Venture Partners and Arboretum Ventures.

SonarMD, founded in 2015 and headquartered in Chicago, is a healthcare company that provides care management services to patients and clinical medical expert teams. By collaborating with patients and medical professionals, SonarMD aims to improve care for “high-beta” patients—those who exhibit significant variability in clinical outcomes and costs, and who typically require expensive pharmacological treatments.

For SonarMD, there is significant room for optimization in both delivering better care and improving cost-effectiveness. SonarMD’s strategy involves realigning incentives within specialty practices, enabling medical experts with extensive clinical experience and close patient relationships to be better motivated to provide value-based care.

Payers (typically referring to patients receiving care) provide economic incentives, while SonarMD offers the care management and patient engagement tools necessary for clinical practice. As a result, patients receive more comprehensive and preventive care, leading to improved health outcomes and reducing the likelihood of requiring high-cost medications or more expensive treatments.

“We see enormous market potential in this model,” said Anna Haghgooie, Managing Director at BlueCross BlueShield Venture Partners. “Although SonarMD’s model initially targets the gastrointestinal inflammatory bowel disease (IBD) space, it can be readily expanded to other ‘high-beta’ specialty areas where there is room for improvement in care management, care costs, and care outcomes.”

It is reported that the funds raised in the Series A round will help SonarMD attract more specialized healthcare talent, who will assist the company in translating its current growth momentum into larger-scale expansion. SonarMD is currently led by founder and Chief Marketing Officer Larry Kosinski, M.D., a gastroenterologist, and CEO Devin Gross.

SonarMD CEO Devin Gross (Image source: official website)

Gross spent 15 years at Emmi Solutions, a leading U.S. patient engagement health technology platform. In 2010, Gross became CEO of Emmi Solutions, helping the company achieve rapid growth until its acquisition in 2017. In August 2018, Gross joined SonarMD as its Chief Executive Officer.

“I’m truly delighted to be part of SonarMD,” said Gross. “We are focusing on an area that has been largely overlooked, which gives us ample opportunities to refine and enhance every aspect.”

In fact, changing clinical practice is not easy, but SonarMD has demonstrated the viability of its model. Founder Kosinski stated, “It is crucial to engage experts. They are key figures in this field, and when they properly establish a value-based healthcare framework, trends in medical care will shift.”

Dr. Tom Shehab, a gastroenterologist and Executive Partner at Arboretum Ventures, stated that SonarMD is uniquely positioned to enhance the quality of care and reduce costs for patients with chronic conditions. The current healthcare delivery system is overly fragmented, which adversely affects patient experience and outcomes. Encouragingly, SonarMD’s model strengthens the patient–physician relationship and ensures continuity of care, thereby improving overall outcomes.

Blue Cross Blue Shield Venture Partners (BCBSVP) is a corporate venture capital fund licensed by the Blue Cross and Blue Shield Association, which comprises independent Blue Cross and Blue Shield companies.

BlueCross BlueShield Venture Partners manages over $575 million in capital across three funds. The fund primarily invests in promising emerging companies with strategic foresight, and Sandbox Industries serves as the exclusive investment management services provider for BlueCross BlueShield Venture Partners.

Arboretum Ventures is a venture capital firm focused on the healthcare industry, founded in 2002 and headquartered in Ann Arbor, Michigan.

Arboretum Ventures manages $450 million across four investment funds. The investment team targets capital-efficient companies that can effectively reduce healthcare costs and improve efficiency in key areas such as medical devices, diagnostics, health IT, and healthcare services.