ClearDATA announced the close of an over-subscribed $25 million Series C funding round with contributions from Heritage Group, HLM Venture Partners and Flare Capital Partners, along with existing investors Norwest Venture Partners, Merck Global Health Innovation Fund and Excel Venture Management. The investment will be used to maximize the cloud company’s growth in the market for health information technology cloud computing, supporting its fourth consecutive year of 100+% YOY subscription revenue growth.
“Security breaches, HIPAA and compliance regulations, and data itself are amassing at levels that quickly outgrow the average existing health IT infrastructure,” said Darin Brannan, CEO, ClearDATA. “Healthcare organizations recognize the need for a purpose-built healthcare exclusive provider to properly address these issues—and so do investors. We are excited to continue our momentum in the healthcare cloud market, which this new funding further accelerates.”
Capitalizing on healthcare’s changing landscape
A number of factors are fueling investor interest, including industry analyst forecasts that the US cloud computing market will grow at a healthy rate of 20-30 percent each year for the next five years. In a report published October 2014, Frost & Sullivan estimates the total US healthcare cloud market revenue at $900 million. ClearDATA projects IT cloud penetration in the US healthcare industry will grow to 50% in the next four to five years, representing approximately $6.5 billion of a $13 billion market for multi-cloud computing and managed services.
ClearDATA’s own upward trajectory mirrors the health IT cloud’s rapid market dominance. As an example, over the past year, ClearDATA was named North American Healthcare Cloud Leader for 2014 by Frost & Sullivan, acquired several marquee customers, achieved Common Security Framework Certified status from the Health Information Trust Alliance (HITRUST), and opened new offices in San Francisco and San Antonio. The company is also introducing major new products to address multi-cloud workloads such as its Healthcare Managed Services on Amazon Web Services, providing enhanced healthcare specialization, security and compliance, and manageability.
Solving key market problems
Healthcare IT infrastructure is aged, fragmented, and not built to house and manage large scale data sets—and internal IT staff are stretched too thin to keep at bay today’s constant onslaught of data breaches. ClearDATA solves this problem by modernizing and managing infrastructure with its HealthDATA™ Cloud and SaaS HIT Cloud Management platform. In the process, ClearDATA secures and protects patient health information in a HIPAA-compliant environment for data interoperability, aggregation and access. ClearDATA’s ongoing development of its SaaS HIT Cloud Management Platform aims to simplify the management of complex IT infrastructures by providing a single interface to manage and monitor resources in real-time across multiple platforms. This enables healthcare organizations to benefit from greater transparency, enhanced application and network security, and industry-leading compliance.
Partnering with influential investors
“We set out to align ourselves with value investors that have decades of relationships and strategic LPs (limited partners) in healthcare to contribute alongside their capital,” said Aaron Barfoot, CFO, ClearDATA. “We believe we have unbeatable financial sponsors who have a long-term view of continuing to help us build a market-leading company in our category.”
This latest round of financing was led by the healthcare technology industry’s leading venture capital firms—Heritage Group, HLM Venture Partners and Flare Capital Partners—all of whom have deep ties with the country’s largest and most influential network of healthcare providers, payers and other healthcare entities.
There are now over 30 major healthcare brands indirectly supporting ClearDATA via these new strategic healthcare venture capital firms, examples include: Intermountain Healthcare, Cardinal Health, Memorial Hermann, LifePoint Health, Health Care Service Corporation (HCSC), UnityPoint Health, Trinity Health (Livonia, MI), Tenet Health, Community Health Systems, and more.
HLM partner Marty Felsenthal, who will be joining the ClearDATA board, said, “Our strategic investors have a high degree of interest in ClearDATA. They recognize the benefits of cost reduction and enhanced security that a dedicated healthcare cloud solutions vendor can provide, particularly as more and more data in healthcare is created and analyzed so healthcare organizations can position themselves for success in a value-based reimbursement environment.”