When market fit and social good collide, success will follow: Our recent investment in Healthify
It’s not often that you’re able to invest in a business that has both the promise of excellent returns and a compelling social mission. That’s why we’re excited to announce that we have partnered with Milestone Ventures, Acumen Fund, Kapor Capital and BlueCross BlueShield of Kansas to invest inHealthify, a software provider that is improving access to health and social services for vulnerable, low-income communities. Building a big, profitable business while addressing this social mission is no easy task, but we are confident that it’s well-placed in the hands of CEO Manik Bhat and his founding team.
Manik is a veteran of the healthcare trenches from his time working in Baltimore’s inner-city health clinics. He grew frustrated with the lack of coordination among the various community-based organizations available to Medicaid recipients, including both clinical initiatives, as well as broader social services – like housing, employment help, childcare services and access to food for welfare recipients – that are now understood to have a massive impact on medical outcomes and costs. Manik shifted gears when he saw an opportunity to make an impact – by applying technology to disrupt the status quo in that environment. As he’ll tell you (with an infectious enthusiasm that makes you want to join him on the front lines), Healthify aims to “turn healthcare inside out,” and in doing so bring community organizations and healthcare providers together to improve outcomes for at-risk populations.
As investors, the Healthify opportunity appealed to us both because of its immense market opportunity and because of the phenomenal and passionate team behind the product. This is a company in the right place at the right time with the right team. Here’s why we believe it’s poised for huge success.
Right place. Here at Primary, we’ve made no secret of the fact that that we’re sweet on theNYC SaaS ecosystem (Medidata, BuddyMedia – nowSalesforce Social Studio– andTxVia are some notable exits). We are particularly interested in vertical SaaS applications, and believe that NYC, with its density of talent and customers in a wide range of sectors, will be a vertical SaaS leader in the years to come. Healthify will flourish in this favorable environment; its product is already making great waves in the Medicaid world, and it’s bolstered by a foundation of social good. We believe that mission-driven companies are able to build passionate cultures that create a huge advantage in recruiting and retaining employees – not to mention in fundraising efforts – and Healthify is certainly well-positioned as it continues to make headway in the market.
Right time. The Affordable Care Act and growing spending on Medicare and Medicaid are driving fundamental changes in the healthcare industry, including shifts toward value-based reimbursement and coordination of care. This leaves insurers, payers and providers facing increased scrutiny regarding the effectiveness of their spending. With enormous downward pressure in the market, the timing couldn’t be better for innovative platforms in the healthcare space.
It’s difficult not to overstate Healthify’s favorable position here. The company specifically addresses the $605.9 billion Medicaid/Medicare system, which has been resistant to change historically, and has found itself largely devoid of innovative solutions to help move the needle. Part of Healthify’s brilliance is that it improves big government programs, while bypassing government selling red tape. Instead, its customers are large insurers and providers – sophisticated consumers of technology with the means and incentive to invest in platforms that will improve outcomes, increase efficiency and decrease cost.
Perhaps even more compelling, with growing evidence that improving access to social services will improve health outcomes, the CMS is funding a major initiative – the Accountable Health Communities (AHC) Initiative Model – to bridge the gap between clinical care and community services. Over the next five years, the Centers for Medicare and Medicaid Services (CMS) will award 44 cooperative agreements (ranging from $1MM to $4.5MM) to groups that will work with state Medicaid agencies, clinical delivery sites and community service providers to test the efficacy of this model in improving patient outcomes. Healthify is well-positioned to partner with these organizations to meet the needs of the AHC model.
Right team. But the biggest piece ofwhat gets us so excited about Healthify is its passionate and brilliant founding team – a team that mirrors the drive and socially conscious sensibilities of its CEO. Manik epitomizes the type of founder in whom we love to invest; he’s passionate about his company’s mission and has the “can’t stop, won’t stop” gumption and insatiable curiosity that drives him to achieve success. As a pre-med student at Johns Hopkins University, Manik was tempted to drop out and move to India to live an ascetic life. But in his deep readings ofSartre (for fun!), he realized his true social service calling. He began working in Baltimore health clinics and became deeply disturbed by the tragically inefficient case management processes. After fighting to change the situation from within, Manik made a commitment to seek a broader remedy for the situation, and Healthify was born.
Manik and his co-founders, Eric, Dan and Alex, all share a passion for social good. Together, they’ve built an impressive roster of tech-savvy engineers and former care coordinators who have witnessed firsthand the failings of our healthcare system.
Healthify is tackling some of the most pressing and costly issues in caring for underserved communities, and the payer community is paying attention. We’re proud to be a part of the Healthify journey, and we look forward to working closely with our friends at Milestone and Acumen to help this fantastic team build the company of their dreams.