Scouting Report-Redox Raises $45M in Series D to Grow Data Integration Platform
Event: Redox recently announced that they raised $45M in a Series D round, bringing its total raised to $95M. The round was led by Adams Street Partners, joined by Avenir and prior investors Battery Ventures and .406 Ventures and RRE Ventures. Redox’s cloud-based platform simplifies integration and scaling for software developers looking to build applications for healthcare providers.
Lessons Learned Along the Way:
Analyze where the value is being created and move in that direction
Create a defined and integrated way of attacking the problem
Tackle the problem in phases and keep working incrementally to maintain and improve functionality.
Description: Redox is a Wisconsin domiciled cloud-based integration software provider that helps accelerate the adoption of healthcare technology. We spoke with Redox President Niko Skievaski, the company’s data platform allows developers and providers to connect its network once and then exchange data across the company’s platform with any other connected company once they join the platform. More than 1,400 healthcare delivery organizations, including most top hospitals, and 350 independent software vendors use Redox’s service to exchange and integrate more than 12 million patient records. According to the company, almost 70% of the traffic on its network is bi-directional. Redox’s system is able to exchange data across over 50 EHR systems and currently has over 1,400 live connection points (as of the time of our interview). Visually one can think of Redox as powering a “two-sided network” with software developers on one end and healthcare providers on the other, with the Redox cloud powering the connection between the two. According to Skievaski, the power of Redox’s model is that once an app developer or provider is connected to the network, each successive integration becomes “magnitudes easier”. While the average implementation time is approximately 4-6 weeks (currently running 35 days), the company pointed to one example where the company tested and implemented an application for an existing customer during a 30-minute phone call. Interestingly, from a business model perspective, while Redox could have chosen to focus on selling to providers, they felt that would require them to customize each integration and probably would have effectively ended up leaving them with 20 large customers. By contrast, Skievaski noted that while selling to developers was initially a risk, by “seeing where the value is and moving in that direction” they were able to create a whole network of data and share it more effectively. As a result, their software developer customers actually end up recruiting providers to the Redox network thereby enhancing its power. Similarly, following a sharp slowdown in project activity at the beginning of the pandemic (when almost 70% of projects were put on hold or canceled) ensuing layoffs precipitated Redox to form specialized verticals focused on growth areas such as remote patient monitoring, telehealth, labs and diagnostics all of which are projected to do quite well coming out of the pandemic.
Implications: The ability to exchange information and turn it into timely, usable, and actionable data will probably be the single most important issue in controlling healthcare costs and improving the delivery of healthcare over the next decade and beyond. As demonstrated by the COVID pandemic, in a hyper-connected world, disease and pathogens can spread across the globe in the course of a few plane trips. As a result, the need to track, trace and type people and goods that may harbor pathogens will be dependent upon our ability to gather and share quality data. On a more local level, data will power earlier/improved diagnostics and risk-stratification needed for improved population health, comparative effectiveness, and attribution for value-based care as well as the user analytics and recommendation engines that will power consumer health apps. Healthcare has tremendous amounts of data but it is difficult to get to, often siloed off, and even harder to share. Solutions from standards bodies like FHIR and HL7 as well as private market solutions like Redox and others are necessary to break the logjam to free up data intelligence and make healthcare more responsive and adaptive to the demands of the market.
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This Startup Raised $45 Million To Connect Healthcare Data In The Cloud & Healthcare Strategy Bullpen Interview Niko Skievaski, President Redox, 3/10/21