Aledade Raises $100 Million Series D to Help More Primary Care Practices Thrive in Value-Based Care

New Funding Will Power Growth of Nationwide Network of More than 1 Million Patients by Further Expanding into Medicare Advantage Contracts

Aledade announced it has closed a $100 million Series D funding round following a year of significant growth for its national network of risk-taking primary care practices. Returning investor Meritech Capital led the round, which included new growth investors Tiger Global Management and IVP, and returning investor OMERS Growth Equity.

“Working in partnership with hundreds of amazing primary care practices, Aledade ACOs have helped achieve better health outcomes for more than a million patients through risk-taking contracts across all types of payers, with remarkable growth in Medicare Advantage,” said Farzad Mostashari, MD, CEO and co-founder of Aledade. “This impressive show of support from investors proves that value-based care led by independent primary care, embracing risk, is the right path forward for American health care. We are thrilled to put these resources to work by helping more primary care professionals enter risk-taking arrangements with all kinds of payers, reinforcing our tech platform in the face of nationwide growth, and launching innovative projects to improve the health of patients across the country.”

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Aledade now partners with nearly 800 independent primary care practices, including more than 100 federally-qualified health centers, comprising more than 7,800 providers in 31 states. Through this nationwide network of independent practices, Aledade manages roughly $12 billion in health care spending through 35 Medicare and 51 other value-based contracts and Aledade ACOs care for nearly 1.2 million patients.

Aledade will use this infusion of capital to expand its value-based care model with health plans across the country, with a particular focus on growing its strategic partnerships with Medicare Advantage (MA) plans to improve outcomes and quality for more seniors. Already, Aledade works with all of the largest MA payers and multiple Blue Cross plans to give Aledade practices access to MA value-based contracts. In 2020, Aledade more than doubled the number of patients served in these MA contracts, bringing the total to about 100,000.

As the company expands into more MA plan partnerships and welcomes more practices to its national network of ACOs, Aledade will continue to invest heavily in its cutting-edge technology platform to ensure primary care physicians have a world-class operating system for population health. Aledade also plans to launch several initiatives in 2021 to extend this platform. These include initiatives to extend the use of integrated telehealth, predict and prevent the occurrence of unplanned dialysis, reduce racial disparities in hypertension control, and enable even the smallest primary care practices in the country to join value-based contracts with Aledade.

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“We’re grateful to be a small part of the Aledade team,” said Craig Sherman, Managing Director at Meritech Capital. “Every other innovator in this space wants to own the doctors and be their boss. But Aledade’s team set out to prove that doctors are better caregivers and leaders in their community when they stay independent. They’re happier, too. When we first invested in Aledade, we believed in their theory and took a leap. Now, we’re doubling down. Aledade and its network of independent primary care practices have proven they can treat patients far better and, as a bonus, raise revenue for primary care practices while simultaneously saving money.”

Aledade’s growth has been driven by the success of its physician-led model, in which the company shares in the risk and reward of both government and commercial value-based contracts with participating independent practices. Aledade practices have improved the quality of care and health outcomes while controlling costs in all types of public and private payer contracts. To date, Aledade’s participating practices have received more than $115 million in shared savings revenue.

As the health care system continues to be strained by the COVID-19 pandemic, these value-based practices are keeping patients healthy, at home, and out of the hospital with proactive, coordinated primary care. Aledade technology helps practices identify and better manage their most at-risk patients. Patients of practices engaged with Aledade have fewer emergency department visits, inpatient stays and readmissions; in the most recent year with public results from the Medicare Shared Savings Program, Aledade practices reduced hospital stays by an average of 9 percent, avoiding more than 10,000 unnecessary hospitalizations.

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