Redesigning Health — a New York City-based company that creates healthcare startups — Closed a $65 million Series C funding round on Tuesday.
The round was led by General Catalyst. Hemant Taneja, CEO and Managing Director of General Catalyst, personally led the round and will join Redesign’s board. Other investors — including CVS Health Ventures, UPMC Enterprises, Eden Global Partners, Euclidean Capital, Samsung Next, TriplePoint Capital and Statement Partners — also participated in the financing.
Redesign was launched in 2018 with the goal of driving “a new innovation model in healthcare” by bringing together industry leaders, visionary founders and investors, said Samantha Lynch, the company’s head of strategy and finance. The business creation model involves the use of cross-functional teams in product development, business strategy, and marketing to develop companies with a market research-identified unmet need.
The company differs from venture capital funds, which often have no specific focus on healthcare and invest in companies across a wide range of industries. And even VCs with dedicated care poor usually use “a very custom process to build a small number of companies with a small team,” Lynch said. With more than 300 employees, Lynch said Redesign is focused on innovation at scale, after it grows more than 40 companies in four years.
Lynch also pointed out that the company enables health innovation through “business creation” — rather than waiting to invest until a company has done the fundamental work, as venture capital funds do.
Redesign also differs from incubator programs because they often only concern a limited part or stage of a startup. Instead, Redesign takes a holistic approach, Lynch said.
Several teams are involved in this approach. For example, Redesign’s business development teams conduct market research and generate new business ideas, the product team helps create initial products for startups, and the marketing team builds startups’ brands and develops go-to-market plans. And from day one, the company’s venture presidents provide operational guidance, help hire the founding team and serve as board members as the company scales, Lynch said.
The process of building a business always begins with a “carefully designed team of technology, healthcare and finance experts to test ideas under pressure and lay the groundwork for launch,” explains Lynch. Once the concept is developed, Redesign brings in partners — such as seed investors, academic experts, or health system leaders — to help launch startups to market.
When building businesses, Redesign prioritizes removing costs from the healthcare system, improving quality of care and creating easier access for patients.
Examples of these companies are the cancer care technology company Jasper Healthpersonalized autism care provider Development of Springtij childrenand start up digital weight loss to calibrate. In all of these cases, Redesign spawned a startup because it wanted to disrupt the current state of care, where “a combination of too few clinicians and too few advanced tools led to substandard care,” Lynch said.
More recently, Redesign has been building more businesses to help providers and payers move toward value-based care. Two of these such startups are a home health care company MedArrival and Duosa startup that matches seniors with a home care manager.
In addition to creating these companies, Redesign also shares the benefit with them.
“We have been a shareholder in every company built at Redesign Health from day one, and are focused on creating a deep partnership with founders, focused on strong incentive alignment and a shared vision for impact,” Lynch said.
The Series C funding round brings the total amount Redesign has raised to date to $165 million. The round also brings the company’s valuation to $1.7 billion, according to the reporting of Fast company — Lynch refused to confirm the figure.
Photo: Topp_Yimgrimm, Getty Images