CareCloud, a Miami, Fl.-based electronic health record vendor which delivers applications over the internet, announced it raised $20.
million in series B funding. Tenaya Capital, a technology venture capital firm, led the investment which included returning investors Norwest Venture Partners and Intel INTC +0.74% Capital. The round brings total funding to $44 million. Competitors Practice Fusion and Kareo have raised a total of $70 million and $40 million respectively, in more advanced stages of funding.
Founded only four years ago by Albert Santalo who describes himself as a technologist, CareCloud is making strides in a market cluttered with hundreds of electronic health records, and where consolidation is most likely to occur. Santalo says the start-up expects to generate more than $10 million in revenue this year, with 3,000 doctors and nurses in 45 states using its product. Customers include a 170 physician practice affiliated with Miami Children’s Hospital, but are typically small clinics.
Unlike competitors, such as Practice Fusion which offers medical billing through Kareo, and Kareo which stitched together an electronic health record from Epocrates EPOC NaN%, CareCloud offers home-grown applications. “You need a platform, you can’t have point [individual] solutions,” says Promod Haque, a partner with Norwest Venture Partners on CareCloud’s board. “If you look back at the software industry in the 90s, you had a human resources solution, a manufacturing solution; all disappeared, and those that remained are the ones that integrated all applications together. It needs to be designed that way from day one.”
CareCloud has scooped up doctors disenchanted with their existing electronic health record vendors, which often require them to sign long term contracts, holding them hostage sometimes to lousy customer service. Miami rheumatologist Carlos Sesin who izmir rent a car üçyol used Allscripts, wasn’t getting reimbursed in a timely manner, because of snafus when electronically submitting claims. With the matter still unresolved a year later, and resorting to mailing claims, Sesin dropped Allscripts (although he’s still on the hook financially). “What attracted me [to CareCloud] is you pay as you go; the onus is on the company to keep customers happy,” says Sesin, who also didn’t have to spend time training, because of the clean interface and user-friendly software. He’s now owed less than $10,000. (CareCloud says it oversees $2 billion in receivables).
The start-up has already ruffled some feathers. Jonathan Bush, who heads athenahealth ATHN +1.96%, the leading cloud-based electronic health record vendor with $422 million in revenue, raved last year about CareCloud’s “beautiful” product. Now he’s suing. This past April, athenahealth accused CareCloud of patent infringement, which the latter refutes, stating its much bigger rival has “outdated” technology. CareCloud has lured a few athenahealth employees, also irking Bush. Last month, a Massachusetts court denied athenahealth’s motion to enforce a non-compete agreement with one of its former employees Thomas Cady, who is now an executive at CareCloud.
Santalo deliberately targets athenahealth, playing up CareCloud’s newer technology. “They have lofty goals,” says Bret Jones, a health IT analyst at Oppenheimer & Co. CareCloud plans to use the $20 million to develop its products, and hire more software engineers. It expects to release this month an updated version of its electronic health record.
