Sunday, June 26, 2016

Tech entrepreneur raises $25M for health IT startup to support employer insurance choices


league health screengrab

League, a health IT startup that developed an app to ease the job of employers to locate providers and services for employees, raised a Series A round to support its expansion as it seeks to change the consumer healthcare experience, joining the likes of OscarBright Health and others.OMERS Ventures, Canada’s largest investment firm, led the $25 million financing round. Infinite Potential Technologies, Real Ventures, and BDC IT Venture Fund also took part. Strategic investments were provided by RBC, owner of Citi National, John Hancock’s parent company, Manulife Financial, and Power Financial Corp, according to a company statement.

The financing follows the launch of the business in cities such as Seattle, Toronto, and Vancouver last year. The company claims that its business fills a gap in insurance market products for employers by providing health spending accounts, wellness accounts, and group insurance plans from a mobile platform.

League CEO Michael Serbinis said it needed to raise a large round to compete with the likes of Oscar and CollectiveHealth, which are part of a broader trend of companies giving employers more flexible services that are easier to access on mobile devices or through computers, in an interview with Bloomberg.

Several health IT startups have also spotted an opportunity in helping established payers resposition themselves to be more consumer friendly and provide service to help them change how they work with providers and health systems to meet the requirements of healthcare reform. Others see supporting employers insurance decisionmaking as a pain point in need of fixing. Among them are PicwellWellthieMaxwell Health, and Stride Health.

Serbinis has previously led companies in the technology space such as Kobo, a digital reading company that views itself as a competitor to Amazon’s Kindle and has 20 million customers in 190 countries. He sold Kobo to Japanese Internet business Rakuten for $315 million in 2012. He also sold another business he started, cloud storage company DocSpace to Critical Path for $568 million in 2000.

There’s a certain amount of skepticism of entrepreneurs moving into healthcare from other industries, particularly technology, but also from areas such as sports apparel and advertising. Many have been unprepared for the long sales cycle or have an appreciation for the complexities of making it easier to navigate fragmented systems without creating more work for healthcare professionals and patients. American Medical Association CEO Dr. James Madara recently referred to many of the digital health technologies currently available but not validated the “snake oil of the early 21st century.”

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