Practice Fusion Raises Additional $15 Million On Series D Round

12-9-2013 10-19-37 PM

Practice Fusion, a free cloud-based ambulatory EHR vendor, announced a $15 million extension to the series D round it closed in September of this year. That round brought $70 million, making the new series total $85 million. Funding for the additional capital was led by Qualcomm Ventures, with participation from Longitude Capital, and a handful of returning investors. The round brings Practice Fusion’s total funding raised to $150 million since its 2005 launch.

Practice Fusion, which is frequently named among likely near-future IPO candidates, has had a busy, and largely successful year. The company supported 55 million patient visits in 2013 and passed the 300 employee mark. In February, it acquired 100Plus, a startup co-founded by Practice Fusion CEO Ryan Howard. At the time of its acquisition, 100Plus hadn’t brought any products to market yet, but it was working on developing predictive analytics models that would be able to mine Practice Fusion’s de-identified patient data sets to help understand what behaviors lead to a healthy lifestyle and how those behaviors could be encouraged across a population.

In April, the company launched a physician review component of its site called Patient Fusion. The site was designed to help patients book appointments with Practice Fusion doctors, and then solicit reviews about the visits. The idea was to compete with the ZocDoc business model. Unfortunately, Practice Fusion went a bit to far in their efforts to solicit reviews. Without informing doctors, the company invited million of patients to write reviews after their appointments. Unfortunately, some patients did not realize that the reviews they were filling out would be made public. As a result, several confused patients inadvertently posted very private details about their visit to the new Patient Fusion website. Practice Fusion answered to both angry doctors and angry patients as it tried to deal with the breach of trust.

Rumors of a large series D round have been circulating since mid-summer. At the time, most pegged the round to close in the neighborhood of $60 million, but Practice Fusion went all the way to $85 million. CEO Ryan Howard explained that extending the round made sense because the money was needed and Qualcomm was seen as an attractive investment partner because of their activities in the mobile health market.

The new money will be spent launching a set of consumer-oriented tools that are designed to help physicians stay engaged with patients while they are at home. Howard equates physician office visits to doing annual taxes, saying "Today, it’s like doing a tax return after the fact. What you really want is to be on the trip and flag the expense now. You want proactive implementation.” The company implied that a new product launch could be expected within the first quarter of 2014.

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