Health Catalyst has raised $70 million in a series D round, valuing the company at more than $500 million. The seven-year-old data warehousing and analytics company has raised a total of $165 million, making it one of the top funded digital health start-ups, and sets it on a path to an IPO. “It [IPO] will be based on market factors to ensure that we’re timing it appropriately,” says CEO Dan Burton.
Despite a $3 trillion market, digital health IPOs have turned in a lackluster performance so far. Health Catalyst is set on demonstrating value by striking unusual deals with customers. It is tying a significant chunk of revenue to delivering results. “I hope that health care systems will start requiring accountability,” says Burton.
In January, Health Catalyst signed the first such contract with Allina Health, a large Minnesota-based hospital system. Allina is paying Health Catalyst $100 million over 10 years, 20% of which is tied to performance. Using the company’s analytics software, the hospital plans this year to reduce the risk of sepsis, bring children up to date on vaccines, prevent complications from pregnancy, and manage blood sugar levels in diabetes patients.