Medallion had a great first quarter of 2022. According to founder and CEO Derek Lo. With almost 200 clients, mostly other digital health startups, the next step will be to get big actors — mostly hospitals and health insurance companies — to use Medallion software to get past these time-consuming bureaucratic hurdles. Looking at a much longer sales cycle, coupled with the possibility of an economic downturn, Lo began talking to existing Medallion investors and everyone agreed that the best defense is offense.
Although Medallion barely touched its Series B capital, the company has raised $35 million in Series C with Spark Capital and GV to secure the runway for more than three years as it looks to expand its sick and insurance business regardless of what happens in the wider markets. Salesforce Ventures also joined the round along with existing investors Optum Ventures and Sequoia. The funding raises Medallion’s value to $350 million, up from $200 million in November.
“We want to make sure we have enough capital to grow the way we want, even in a recession,” says 27-year-old Lo, a Forbes 30 List of medical institutions under 30. “Medallion is essential software that ensures healthcare companies comply with regulations and can manage their doctor network more effectively.”
Reducing friction and reducing administrative costs are key to many Medallion customers. The chore of figuring out the unique licensing procedures for doctors, nurses, and other healthcare professionals in each state, registering with insurance companies, and doing background checks to get certified takes time, labor, and money. “In a world where people are looking for places to save money and focus on the things that really matter to them strategically, outsourcing provider network management to a provider like Medallion makes a lot of sense,” says Will Reed, general partner at Spark. Capital.
Medallion’s key commercial move is to reduce what Lo calls “time to productivity,” which he defines as “how long it takes a physician, both new and existing physician, to overcome all the necessary certification and compliance hurdles” before before they can get to work. see patients. Medallion, which charges based on the total number of providers, estimates it has saved its customers about 250,000 hours of bureaucratic headaches.
That’s why Equip, a San Diego-based start-up offering virtual specialized eating disorder treatment, became a client rather than hiring and training its own team to handle these administrative functions. “Everyone in healthcare is talking about access. And access is great, but what really matters is access to effective care,” Erin Parks, co-founder and chief medical officer of Equip, said in a statement. “Because Medallion has helped us grow from 8 to 50 states in less than 6 months, we have been able to once again focus on treating young people and their families with evidence-based care.”
Signing up new digital health customers can take a month or two, Lo says, but the average time to sign a contract with an insurance company or hospital is typically no more than six months and can take up to 2 years. Medallion has already attracted new customers, including Longevity Health Plan of Florida, a special Medicare Advantage plan for people living in skilled nursing facilities. The company is also expanding its sales force and developing dedicated workflows for so-called hospital privileges, an attestation process specific to healthcare systems. The current headcount is around 150 and could increase to 200 by the end of the year.
Supporting Salesforce Ventures as a strategic investor is also key to Medallion’s future ambitions. The San Francisco-based cloud giant already provides customer relationship management tools and databases to large healthcare companies, but doesn’t offer niche workflow automation services like credentials. This creates cross-selling opportunities, Lo said. “We really want to build a community scale company, and to do that we will definitely need to increase the surface area of the product to better serve healthcare systems and payers,” he adds. “We think there’s an ocean to grow in.”