Direct Healthcare Startup Nomi Health Raises Whopping $110 Million In Series A Funding

Making an attempt to disrupt the US healthcare business is large enterprise, at the very least for one firm attempting to just do that.

Nomi Well being, a startup that delivers well being companies on to thousands and thousands of Individuals with out going by way of third-party medical insurance, announced at this time that it has raised $110 million in Collection A funding.

“Our Collection A speaks to the dimensions of the problem Nomi Well being dared to undertake inside a $3 trillion market,” mentioned Mark Newman, founder and CEO of Nomi Well being. “Nomi’s impression underscores that the individuals who constructed our damaged system can’t repair it.”

The corporate launched in 2019 and presently serves 30,000 individuals per day throughout 10 states. Native governments, universities, and companies contract with Nomi to supply primary healthcare companies, equivalent to Covid-19 testing, vaccinations, and remedy, in addition to different preventive screenings. The corporate brings cell care items to jails, colleges, public housing, long-term care amenities, farms, and factories. 

In response to Newman, the corporate will use the funds to increase the place and the way many individuals it straight cares for. It’s going to additionally increase its direct healthcare buying enterprise and rent further medical and technical workers.

The funding spherical is co-led by Rose Park Advisors, a enterprise agency related to the late Harvard Enterprise Faculty professor Clayton Christensen, and Arbor Ventures, a worldwide fintech enterprise capital agency.

“Arbor invested in Nomi Well being as a result of it solves one of many largest issues dealing with the U.S. healthcare system, which is that the big incumbent healthcare corporations are riddled with operational and technological inefficiencies and devour 30 to 50% of each healthcare greenback,” mentioned Melissa Guzy, cofounder and managing accomplice of Arbor Ventures.

Nomi’s funding displays broader digital well being funding traits: extra corporations elevating extra enterprise capital earlier of their lifecycles.

In response to Rock Health, within the first three quarters of 2021, digital well being startups raised $21.3 billion—greater than the $14.6 billion raised in all of 2020. Among the many 541 offers by way of 9 months of the 12 months, the common funding was $39.4 million, up from the $31.5 million common deal in 2020. 

Nomi will not be alone in far surpassing common funding ranges; 62 different corporations raised at the very least $100 million this 12 months. However notably, Nomi’s funding is extra according to Collection C—a later funding spherical through which sometimes older corporations raised a median of $114 million funding—than Collection A, which averaged $18 million in 2021 to date.

“Whereas Collection A rounds sizes and valuations are growing throughout the enterprise business, Nomi Well being stands out as a really particular Collection An organization,” Guzy mentioned. “Their capacity to execute and to scale are uncommon, permitting them to impression healthcare for the higher because the urge for food to rework healthcare in our nation expands.”

Nomi made information earlier this 12 months for donating $2 million to wipe out $225 million price of medical debt for 176,000 Individuals by way of a partnership with nonprofit RIP Medical Debt.

Nomi has additionally drawn scrutiny for its no-bid contract from the state of Tennessee, to which the corporate has beforehand responded.

“We now have no say in authorities procurement, not to mention ongoing feuds and dysfunctional relationships between well being departments and management within states which have turn into front-page nationwide information in Tennessee,” Newman mentioned.

In response to Newman, it has been confirmed that Nomi delivered on all of the phrases of its settlement in Tennessee. He stands by Nomi’s work in “care deserts”—equivalent to rural areas, public housing, and prisons—significantly in the course of the pandemic. 

“Within the early days of the pandemic, we have been typically the final name of states and counties after the standard healthcare system merely couldn’t rise to the problem,” Newman mentioned. “Right now, Nomi Well being is usually the primary name on account of our observe report and impression.”