VillageMD, primary care start-up, seeks $150 mln in funding

  • Existing investors: Oak HC/FT, Athyrium Capital
  • Six-year-old company helps its physician groups move to value-based care model
  • Guggenheim advises Colorado-based company

VillageMD, a Chicago primary-care group that helps its doctors transition to a valued-based reimbursement system, is seeking $150 million in a capital raise, according to people with knowledge of the situation.

A narrow group of growth equity investors are expected to participate in the financing, one of the people said.

Guggenheim Partners is advising VillageMD on the financing, the people said.

The process is well underway, as the company fielded first round bids in late May, one of the people said.

The anticipated capital raise represents the first significant round of funding for VillageMD.

Oak HC/FT, the Greenwich, Connecticut, growth equity spin-out of Oak Investment Partners, led a $36 million Series A round in VillageMD in September 2015. VillageMD in January 2018 closed an additional $80 million growth financing from Athyrium Capital Management.

Founded in 2013 and led by CEO Tim Barry, VillageMD is a multi-product, multi-payer primary-care physician group.

With a network encompassing primary care physicians across eight states, VillageMD provides medical groups with sophisticated technology and tools to move to a payment model based on quality of visit, rather than the traditional fee-for-service reimbursement model of care.

The company works with all insurance providers and serves all patient populations — commercial, Medicare, Medicare Advantage and Medicaid.

VillageMD operates a model similar to that of Clayton, Dubilier & Rice-backed Agilon Health; however, the latter aggregates physicians for the Medicare population only.

Privia Health and Iora Health are other notable entities focused on reinventing the delivery of primary care, as well as Carlyle-backed One Medical, the largest membership-based primary care organization in the country.

VillageMD’s Village Medical at Home arm offers services to managed care companies, similar to the likes of General Atlantic-backed Landmark Health and Anthem’s Aspire Health.

Representatives of VillageMD, Guggenheim and Oak HC/FT didn’t return requests for comment on Friday.

Action Item: Check out Oak HC/FT’s latest Form ADV: https://bit.ly/2JwabKz