Devoted Health Secures $300 Million Series B Funding to Expand Medicare Advantage Offering

VCBeat (WeChat ID: vcbeat) has learned that on October 17, 2018, U.S. health insurance startup Devoted Health (“Devoted”) announced it had secured $300 million in Series B financing, marking one of the largest fundraising events in the health insurance sector this year. Leveraging this capital, Devoted launched its Medicare Advantage plan and enrolled members in eight cities across Florida under the federal Medicare Advantage program.

This round of financing was led by Andreessen Horowitz, with participation from Uprising Ventures, PremjiInvest, and Andreessen Horowitz. The funds will be used for business expansion and advancing technological upgrades.

Devoted, founded in 2017 by brothers Todd and Ed Park along with Venrock venture capitalists Bryan Roberts and Bob Kocher as founding investors, is a new healthcare company focused on serving the elderly, primarily providing personal guidance and top-tier healthcare plans. Previously, Devoted completed approximately $70 million in Seed and Series A financing, with its valuation exceeding $295 million after the Series A round. The valuation following the latest round of financing has not been disclosed.

Medicare Advantage is a type of U.S. federal Medicare program, characterized primarily by allowing its covered population to obtain coverage through private insurance.

“The problem is that the system itself was not fundamentally designed in a patient-centric manner,” wrote Ed Park, co-founder of Devoted, in an article on the health insurance system. “In the process of accessing healthcare services, people have to shuttle back and forth among well-intentioned primary care physicians, specialists, hospitals, and other medical institutions. This often leads to a highly disjointed, fragmented, and passive patient experience, leaving them exhausted by the ubiquitous administrative burdens.”

Devoted’s proposed solution is to launch a service known as the “payvidor” system, which integrates providers and consumers. According to Ed Park, under this model, Devoted will cover all care costs for its members through Medicare Advantage and deliver medical services—such as in-home care—by partnering with healthcare providers.

Vijay Pande, a partner at Andreessen Horowitz, stated, “More than 10,000 Americans turn 65 every day, entering a healthcare system that is not only confusing and complex but also often cold and impersonal.” He expressed their belief that Devoted Health, with its extensive experience and specialized expertise, can drive truly meaningful and scalable transformation in the financing and delivery of healthcare.

As the aging population continues to grow, it is easy to predict that a new wave of institutions providing preventive healthcare services for the elderly will emerge. As a dedicated recorder in the medical field, VCBeat will continue to closely monitor this sector.

Devoted, founded in 2017 and headquartered in Waltham, Massachusetts, USA, primarily provides personalized guidance and healthcare services to the elderly through its network of physicians and technological support.