Welltok Raises $25 Million Series D To Expand Patient Engagement Platform


Welltok publishes a seemingly premature press release announcing that it has raised $25 million of a planned $37 million Series D round. The round is being led by Bessemer Venture Partners, with no details provided on secondary investors. Welltok and BVP anticipate completing the fundraising by the end of the year. The new funding follows a February 2014 Series C that netted $22 million and brings the company’s total funding to $73 million. That number will jump to $85 million if it is able to extend its Series D round all the way to its $37 million target.

Welltok operates in a particularly difficult digital health segment to monetize, patient engagement. The company launched in 2009, and has been marketing a software suite that lets patients and providers set health goals, and then tracks progress toward those goals through integration with fitness trackers, medical devices, and weight loss apps. Health systems and insurers can use the platform to incentivize healthy decision making by providing rewards when goals are met, and providers can use the platform .

In 2009, when the company launched, health systems had very little financial interest in providing these kinds of wellness solutions. As secondary care providers, hospitals were more focused on high bed utilization rates and maximizing billable services. Keeping patient’s healthy when they were at home would have been counterproductive to their core business model.  At the time, businesses like Welltok had to assume that health systems would not participate, and thus marketed to insurers and in some cases, directly to consumers. This resulted in patient engagement platforms that lacked an engaged physician community, and thus a sense of legitimacy. As a result, patient engagement platforms largely failed.

In 2010, the Affordable Care Act introduced hospital reimbursement programs that provided compelling financial incentives for keeping patients healthy and at home. The ACA also introduced financial penalties if patients were readmitted to the hospital with the same problem within 30 days. Fast forward four years, and these legislative changes seem to have been a catalyst that jumpstarted the now booming digital health industry, and patient engagement solutions are enjoying a second chance to prove themselves. This time, hospitals participating in accountable care reimbursement programs are taking the lead, with insurers and in some cases employers supporting the whole-team approach to engaging patients in their wellbeing, and keeping them healthy and at home.

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