Transcarent Lands $126M Series D

Although Transcarent was already a unicorn, it might be about to grow another horn after landing $126M in Series D funding at a $2.2B valuation.

The Transcarent platform makes it easy for employees to access all of their care needs using a single convenient interface – their phone – while also simplifying how employers provide and track that care.

  • The platform connects members to comprehensive experiences including Everyday Care, Pharmacy Care, Surgery Care (through partnerships with health systems and ambulatory care providers), and Behavioral Health Care.
  • At a time when point solution fatigue is crippling employers and telehealth companies are imploding due to a lack of downstream revenue from other services, Transcarent’s approach definitely has a few things going for it.

The fresh funding will be used to accelerate Transcarent’s AI capabilities, support commercialization, and more than likely acquire other companies (plus the customers they bring along with them).

  • Transcarent apparently had upwards of $100M in the bank before closing the latest round, but it would appear that $226M is a more comfortable starting point when you’re looking to build-out your AI and sign some new partnerships.

The reason behind the AI push is the interconnected nature of the platform itself, which has already enabled several AI features that are harder to pull off with a more narrow approach.

  • For example, if a doctor on Transcarent’s platform reports that a patient has sinus pain, the AI will flag their seasonal sinus infections in their medical history, and can then pull the prescriptions they’ve used in the past – expediting both diagnosis and treatment.
  • If Transcarent’s last phase of growth was about reaching the scale to make that happen, the next phase will revolve around rolling out as many of these features as possible.

The Wire

If you needed any more proof that the market is looking for platforms instead of point solutions, Transcarent’s valuation should give you plenty. Both employers and consumers want a single platform to manage healthcare, and it turns out that providing one leads to good things.

Transcarent Acquires 98point6 Care Delivery Assets

Employer-focused care platform Transcarent is acquiring 98point6’s entire care delivery division in a transaction that’s reportedly valued at the 2023 Digital Health Number of the Year: $100M.

If you’re unfamiliar with Transcarent, the company is helmed by Glen Tullman, a CEO who knows how to get a deal done. Tullman is the former founder of Livongo and guided it through Teladoc’s $18.5B acquisition in 2020.

Transcarent’s virtual platform lets patients book virtual visits, schedule in-home care, meet with therapists, and manage their prescriptions all within the same solution.

  • 98point6 technology will now power the front-end chat that Transcarent’s been using third-parties to handle. 98point6 also doubles Transcarent’s customer base to over 200 employers with a combined 4M employees. That’s a big jump from the 1M employees Transcarent currently supports.
  • Although Transcarent has historically depended on contracted clinicians, it will now gain 98point6’s ~150 physicians, as well as aforementioned employer clients such as Boeing, Costco, and Chipotle.

At its core, the acquisition is about obtaining 98point6’s head start on AI, and bringing Transcarent’s digital front door in-house. Tullman told MedCityNews he was looking for “full control of the front-end process, because how you start determines where you end up… You don’t get a second chance to make a first impression.”

  • What’s next for 98point6? First, a rebranding to 98point6 Technologies. Second, it will stop providing patient care and focus exclusively on licensing its software to health systems, and Washington-based MultiCare has already signed on as its first customer.
  • The pivot allows 98point6 to push toward pure play SaaS margins by licensing its chatbot and engagement suite while it lets hospitals use their own doctors and nurses to take over the actual appointments.

The Takeaway
Transcarent is aiming to simplify the process of finding and receiving care, and 98point6’s front-end chat and affiliated provider group will help it do just that. Simplicity is the value proposition, and it seems like a good one to bring to an employer healthcare market where complexity is the enemy.

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