Flatiron Health Raises Massive $175 Million Series C

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Digital health investment activity has been notably active since the start of 2016, with nearly $250 million in fresh capital announcements coming in just the first week of the new year. By a wide margin, the largest funding round thus far has been Flatiron Health’s newly announced $175 million Series C funding round, led by pharmaceutical giant Roche, with additional participation from Allen & Company, Baillie Gifford, and Casdin Capital. The new investment brings Flatiron’s total raised to $313 million, a huge sum for a technology company working in healthcare.

To provide some context, Flatiron’s new round would have been the second largest in all of 2015, coming in just behind NantHealth’s $200 million investment from Allscripts. Despite having no active customer base, Flatiron has now surpassed other highly-funded digital health startups, including ZocDoc, 23andMe, and Proteus Digital Health. What makes Flatiron even more impressive is that it has passed these other startups in a fraction of the time, having only launched in 2012. At its core, Flatiron is a specialty EHR company – a market segment that investors appear to be bullish on. In 1999, when Athenahealth launched, it managed to raise $40 million in its first three years of fundraising, a fraction of the financial backing Flatiron has attracted over the same time period. As part of the new funding round, Roche has committed to buying several of Flatiron’s products and using them within its cancer drug development business units, an important development as it represents one of the company’s first major clients.

The team at Flatiron is building a full suite of cloud-based oncology EHR software that includes a backend claims processing suite, a patient portal, and data analytics tools. Flatiron is hoarding cancer treatment data in hopes of driving quality improvements through data analytics. The company’s platform is designed to capture, normalize, and visualize cost and outcomes data from across its customer base.  The team hopes analytics will uncover new treatment options and help front-line providers make sense of the reams of clinical trials published every year, when the results from those trials influence the treatment plan they develop for their patients.

Interestingly, there are relatively few competitors trying to solve the problem Flatiron is tackling. IBM has been working to advance its Watson analytics to help providers create personalized cancer-centric treatment plans, but the supercomputer is not an EHR, and IBM has faced a number of setbacks on its road to commercializing Watson as a cancer clinical decision support platform.

Flatiron CEO Nat Turner reports that he plans to bring the company public in two to three years.


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