See the Deck Glen Tullman's Transcarent Used to Raise $200 Million

2022-01-24T16:24:46Z

Transcarent announced on January 11 that it had raised $200 million in Series C funding.
Transcarent's CEO Glen Tullman also headed health-tech standouts Livongo and Allscripts.
Tullman said an unsolicited offer in December prompted the new raise.

Glen Tullman just raised an unsolicited $200 million.

The digital-health investor and entrepreneur led Livongo, a chronic-care company focused on diabetes, through a sky-high IPO and roughly $14 billion sale to Teladoc Health, a telehealth company, in the summer of 2020. Before that, he was chief executive at Allscripts, a public health-IT company.

Now at the helm as CEO at Transcarent, a healthcare startup that launched in 2020, Tullman just raised $200 million in about three weeks, in the company's third round of funding. The haul, announced in January, valued Transcarent at $1.62 billion and brought its total cash raised to $298 million, the company told Insider.

On January 12, Tullman told investors at the annual JPMorgan Healthcare Conference that he wasn't looking to raise money again until mid-2022. But the company got an unsolicited investment offer on December 15 that piqued Tullman's interest. After talking to more venture capitalists, the company found enough interest, especially among former Livongo backers, to plow ahead anyway.

Kinnevik, which led two rounds of funding for Livongo, and Human Capital led the round, with participation from investors including Ally Bridge Group, General Catalyst, 7wire Ventures, Alta Partners, Merck Global Health Innovation Fund, Jove Equity Partners, Threshold Ventures, GreatPoint Ventures, and the health systems New York's Northwell Health, Intermountain Healthcare, and Rush University Medical Center.

While Transcarent is no doubt benefiting from Livongo's success and Tullman's access to capital — for one, he's a cofounder at 7wire Ventures, a Transcarent investor — the company's plans to disrupt healthcare are also more ambitious than its predecessor's.

Transcarent wants to connect employers that pay for people's medical bills with an expanding suite of medical services. The startup makes money through a variety of means, including copays for telehealth, but the strategy they're prioritizing is one in which companies pay Transcarent pre-negotiated prices that don't balloon up when things go wrong.

That's an uncommon arrangement in an industry that thrives on fee-for-service, where employers and patients have to pay thousands for unnecessary, botched procedures.

Christian Scherrer, an investment manager at Kinnevik. Kinnevik

The scope of Transcarent's plans — the company hopes to change the way patients access everything from surgeries to rare disease treatment — is just starting to become clear. That was part of the appeal for investors in the latest round, Kinnevik's Christian Scherrer, a board observer for the startup, told Insider.

"We look at Transcarent as the gel that's bringing the best solutions together in healthcare," Scherrer said. "Almost like an Amazon-type experience."

Transcarent provided Insider with its pitch deck and edited the presentation to remove financial information and forecasting prior to Insider's review.

See the 17-slide presentation Transcarent used to raise $200 million in just three weeks.

Transcarent is a digital-health startup led by former Livongo executive Glen Tullman.

The startup says it gets paid based on the amount of savings it generates for clients that pay for patients' medical bills, like large and medium-sized employers, government agencies, and unions.

Patients use Transcarent via an app that lets them talk to a doctor, get second opinions on surgeries, refill prescriptions, schedule home care, and more.

Tullman has made no secret of his disdain for industry middlemen like health plans and "navigators" that, in his view, prop up a broken system. Transcarent aims to remove the constraints of insurance networks and billing.

"We're doing what other industries have done, which is taking the middle out," Tullman said at the JPMorgan conference.

To be a "one-stop shop" for healthcare, the company works with various partners like CirrusMD for telehealth, Walmart for prescriptions, and provider systems for surgeries.

Today, about 1 million people can access the app through Transcarent's network of clients, many of which the company inherited from BridgeHealth, a startup it bought in 2020.

One of its pricing options for employers puts Transcarent on the hook financially for certain clinical outcomes like surgery success. That means clients don't pay it unless it delivers the pre-negotiated results.

Tullman has recruited at least three other former Livongo employees to join Transcarent's leadership team, in addition to bringing on Hemant Taneja, a Livongo founder and early Transcarent investor who helped come up with the idea behind the new company.

Many of Transcarent's roughly 80 clients were established through BridgeHealth, a company Transcarent acquired in 2020. The company mostly works with employers, but at the JPMorgan conference, Tullman also said that it's working on deals with health plans.

Today the company's core business is surgeries, physical therapy, and home care.

The startup wants to contract with providers on behavioral health, cancer, rare conditions, and more by 2023.

The company connects employer clients with services it sets up with health systems for fixed costs. Providers like Intermountain are also separately investing in the startup because they like the payment process it's pushing, Scherrer said.

Normally providers have to chase down the money they're owed by patients and health insurers after they've performed a surgery. But Transcarent negotiates with them beforehand — like what payment should be for a successful knee procedure — and provides some funds upfront.

Transcarent gets paid differently depending on the service and employer agreement. For some things, like telehealth, it can charge employers copays for every visit.

But the startup's preferred and most-hyped model is when it's paid for delivering good health outcomes. For example for surgeries Transcarent pays doctors a portion of the cost upfront, then another once it's completed, then the rest after it's clear the surgery didn't cause any complications.

The employer then pays Transcarent whatever it paid for the surgery plus some pre-negotiated amount, the idea being that it's still less than it would've cost otherwise.

Kinnevik's Scherrer said Transcarent won him over when discussing how expansive the vision really is. "Once you realize what the team is really trying to achieve, it's just orders of magnitude a larger vision than what we typically see."

See the presentation digital-health veteran Glen Tullman used to raise $200 million for his new billion-dollar startup

See the 17-slide presentation Transcarent used to raise $200 million in just three weeks.

Transcarent is a digital-health startup led by former Livongo executive Glen Tullman.

The startup says it gets paid based on the amount of savings it generates for clients that pay for patients' medical bills, like large and medium-sized employers, government agencies, and unions.

Patients use Transcarent via an app that lets them talk to a doctor, get second opinions on surgeries, refill prescriptions, schedule home care, and more.

Tullman has made no secret of his disdain for industry middlemen like health plans and "navigators" that, in his view, prop up a broken system. Transcarent aims to remove the constraints of insurance networks and billing.

To be a "one-stop shop" for healthcare, the company works with various partners like CirrusMD for telehealth, Walmart for prescriptions, and provider systems for surgeries.

Today, about 1 million people can access the app through Transcarent's network of clients, many of which the company inherited from BridgeHealth, a startup it bought in 2020.

One of its pricing options for employers puts Transcarent on the hook financially for certain clinical outcomes like surgery success. That means clients don't pay it unless it delivers the pre-negotiated results.

Tullman has recruited at least three other former Livongo employees to join Transcarent's leadership team, in addition to bringing on Hemant Taneja, a Livongo founder and early Transcarent investor who helped come up with the idea behind the new company.

Many of Transcarent's roughly 80 clients were established through BridgeHealth, a company Transcarent acquired in 2020. The company mostly works with employers, but at the JPMorgan conference, Tullman also said that it's working on deals with health plans.

Today the company's core business is surgeries, physical therapy, and home care.

The startup wants to contract with providers on behavioral health, cancer, rare conditions, and more by 2023.

The company connects employer clients with services it sets up with health systems for fixed costs. Providers like Intermountain are also separately investing in the startup because they like the payment process it's pushing, Scherrer said.

Normally providers have to chase down the money they're owed by patients and health insurers after they've performed a surgery. But Transcarent negotiates with them beforehand — like what payment should be for a successful knee procedure — and provides some funds upfront.

Transcarent gets paid differently depending on the service and employer agreement. For some things, like telehealth, it can charge employers copays for every visit.

But the startup's preferred and most-hyped model is when it's paid for delivering good health outcomes. For example for surgeries Transcarent pays doctors a portion of the cost upfront, then another once it's completed, then the rest after it's clear the surgery didn't cause any complications.

The employer then pays Transcarent whatever it paid for the surgery plus some pre-negotiated amount, the idea being that it's still less than it would've cost otherwise.

Kinnevik's Scherrer said Transcarent won him over when discussing how expansive the vision really is. "Once you realize what the team is really trying to achieve, it's just orders of magnitude a larger vision than what we typically see."

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See the presentation digital-health veteran Glen Tullman used to raise $200 million for his new billion-dollar startup

See the 17-slide presentation Transcarent used to raise $200 million in just three weeks.

Transcarent is a digital-health startup led by former Livongo executive Glen Tullman.

The startup says it gets paid based on the amount of savings it generates for clients that pay for patients' medical bills, like large and medium-sized employers, government agencies, and unions.

Patients use Transcarent via an app that lets them talk to a doctor, get second opinions on surgeries, refill prescriptions, schedule home care, and more.

Tullman has made no secret of his disdain for industry middlemen like health plans and "navigators" that, in his view, prop up a broken system. Transcarent aims to remove the constraints of insurance networks and billing.

To be a "one-stop shop" for healthcare, the company works with various partners like CirrusMD for telehealth, Walmart for prescriptions, and provider systems for surgeries.

Today, about 1 million people can access the app through Transcarent's network of clients, many of which the company inherited from BridgeHealth, a startup it bought in 2020.

One of its pricing options for employers puts Transcarent on the hook financially for certain clinical outcomes like surgery success. That means clients don't pay it unless it delivers the pre-negotiated results.

Tullman has recruited at least three other former Livongo employees to join Transcarent's leadership team, in addition to bringing on Hemant Taneja, a Livongo founder and early Transcarent investor who helped come up with the idea behind the new company.

Many of Transcarent's roughly 80 clients were established through BridgeHealth, a company Transcarent acquired in 2020. The company mostly works with employers, but at the JPMorgan conference, Tullman also said that it's working on deals with health plans.

Today the company's core business is surgeries, physical therapy, and home care.

The startup wants to contract with providers on behavioral health, cancer, rare conditions, and more by 2023.

The company connects employer clients with services it sets up with health systems for fixed costs. Providers like Intermountain are also separately investing in the startup because they like the payment process it's pushing, Scherrer said.

Normally providers have to chase down the money they're owed by patients and health insurers after they've performed a surgery. But Transcarent negotiates with them beforehand — like what payment should be for a successful knee procedure — and provides some funds upfront.

Transcarent gets paid differently depending on the service and employer agreement. For some things, like telehealth, it can charge employers copays for every visit.

But the startup's preferred and most-hyped model is when it's paid for delivering good health outcomes. For example for surgeries Transcarent pays doctors a portion of the cost upfront, then another once it's completed, then the rest after it's clear the surgery didn't cause any complications.

The employer then pays Transcarent whatever it paid for the surgery plus some pre-negotiated amount, the idea being that it's still less than it would've cost otherwise.

Kinnevik's Scherrer said Transcarent won him over when discussing how expansive the vision really is. "Once you realize what the team is really trying to achieve, it's just orders of magnitude a larger vision than what we typically see."

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