Clover Health Raises $130 Million in New Funding Round, Valued at $1.2 Billion as New Unicorn
On May 11, Bloomberg reported that Clover Health, a health insurance startup headquartered in San Francisco, recently secured $130 million in a new round of financing co-led by GV, the investment arm of Alphabet, and other investors. The company’s post-money valuation reached $1.2 billion, marking Clover Health as Silicon Valley’s newest unicorn.
Previously, Clover Health raised $160 million in Series C funding in May 2016 from investors including Greenoaks Capital and Sequoia Capital; in December 2015, it secured $35 million in Series C funding from Sequoia Capital; and in September 2015, it obtained $100 million in Series A funding from First Round.
As of now, except for the undisclosedApart from the angel round,Clover Health has raised a total of $425 million in funding.
Clover Health's Health Insurance Business
According to VCBeat, Clover Health2012Founded in San Francisco, USA. The company aims to identify potential health risks in patients through precise medical big data analysis.
The team collects users' medical history from their past health insurance claims data, matches it with models established in the database, and identifies high-risk populations to help them improve their health. By intervening in users' health conditions before disease onset, the company can reduce its expenditures on health insurance programs.
Clover Health’s target customers are primarily elderly individuals and those with lower income levels. After database analytics identify a list of individuals with a high probability of illness, the company arranges for care providers to conduct regular in-home health check-ups or reminds patients to resume treatment if they have discontinued a specific therapy, thereby helping them avoid hospitalization. This approach saves the company an average of $10,000 per patient in healthcare costs. Furthermore, by implementing preventive care measures, Clover Health has reduced patient hospitalization rates.
For example, Clover Health’s system tracks an octogenarian user who was hospitalized after a fall. The patient presents with physical debility, lower-extremity ulcers, and type 2 diabetes, currently relies on a wheelchair for mobility, and is assessed by Clover Health as being at high risk for recurrent falls based on its health risk assessment.
Shortly after the elderly patient was discharged from the hospital, Clover alerted its New Jersey care team to dispatch a nurse to his home. The nurse identified an issue: the patient had been using a plastic step stool designed for toddlers to help him climb into bed at night, which was clearly not an ideal solution. On the same day, the nurse arranged for bed rails to be installed beside his bed.
As a medical insurance company, Clover Health pays the bills for all its enrolled members. This allows the company to capture each member’s evolving health status. Because Medicare beneficiaries have high healthcare utilization rates and account for the largest share of national healthcare spending in China, Clover Health is able to accumulate vast amounts of data. The system can also automatically identify anomalies within the data, such as missed doctor appointments, medication errors, or emergency department visits.
The company’s insurance service has been launched in several cities in New Jersey, USA, including Jersey City. Data from the first half of 2015 shows that, compared with other populations in New Jersey, users enrolled in Clover Health’s insurance program had a 50% lower hospitalization rate and a 34% lower readmission rate. Furthermore, if a patient is hospitalized, Clover Health dispatches professional caregivers to provide home-based care after surgery, ensuring that patients take appropriate postoperative medications.
Kris Gale, the company’s CTO, stated, “Our core philosophy is to leverage data and software to build a clinical profile database for users, identify the gap between treatment approaches and actual health risks, and bridge that gap through healthcare interventions. We have a small team that delivers targeted health interventions toward specific goals, thereby improving users’ health outcomes. This has been beneficial for us.”
The Founding Team of Clover Health
Vivek Garipalli, Co-Founder and CEO of Clover Health, holds a degree in Business Administration from Emory University. With years of deep expertise in big data models for healthcare, he has previously worked in the Mergers and Acquisitions division of Credit Suisse First Boston, at JPMorgan Partners’ private equity fund, and at The Blackstone Group.
In his early career, Vivek Garipalli was an active investor in the healthcare sector, with investments including AAVP Biosystems, Care at Hand, Docphin, LiveProcess, Bell Biosystems, and Doctors Evidence. The company's co-founder and CTO previously served as Vice President at Yammer and brings many years of experience in software engineering.
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