This week San Francisco-based Castlight Health, which offers a personalized health care shopping platform that helps employees better understand the price of medical services and the quality of certain providers, announced that it has raised $100 million in its fourth round of funding. That is the largest amount of funding in a single round that MobiHealthNews has ever reported on.
Investors included T. Rowe Price, Redmile Group and two unidentified mutual funds. The round brings the company’s total funding to $181 million. The latest investment round included participation from existing investors, which include Morgan Stanley Investment Management, The Wellcome Trust, U.S. Venture Partners, Cleveland Clinic, Maverick Capital, Oak Investment Partners and Venrock, according to Dan Primack over at Fortune.
Castlight Co-founder and CEO Giovanni Colella told Forbes that he expects the company to IPO next. He said that in the face of increasing competition from similar tools coming out from health plans, this “record breaking” amoung of money “signals to the market that we’re here to stay,” he said.
Castlight’s other co-founders include Todd Park, the current US Federal CTO and former CTO of HHS, as well as Bryan Roberts, a partner at venture capital firm (and Castlight investor) Venrock.
At the end of March, Castlight Health launched its first mobile app: Castlight Mobile, which is currently available as a native app for Apple iOS and Google Android devices users. The company suggests BlackBerry users and others can access the platform through an optimized mobile site. Of course, the free apps are only available to employees at companies that already use Castlight’s healthcare costs platform.
The company claims to have “dozens of leading organizations” already signed on as customers. They include: Allegis Group, Honeywell, Life Technologies and Regis Corporation. Castlight told Forbes that 70 percent of its customers’ employees use Castlight’s price comparison tool. About 61 percent of them said the tool helped them change their spending habits.
Castlight currently has 100 employees, and it plans to use some of the new funds to build out its sales team and beef up its marketing spend, Forbes reports. Castlight also plans to extend its service to help create more cost transparencies around medications — according to a report in TechCrunch — and that’s what another startup, called GoodRx, is developing. GoodRx launched its own app for comparing the prices at competing pharmacies earlier this year.
Ethan Prater, vice president of products at Castlight Health told MobiHealthNews in an interview last month that the company’s recently launched mobile app will make it easier for Castlight users to engage their primary care providers in discussions about costs and quality measures for specialists the PCP refers them to.
“We call this feature ‘check your referral’,” Prater said at the time. “People don’t generally want to change their primary care physician since that is someone they trust. It’s not where the cost is, anyway. The cost is in downstream referrals like specialists. So we created this feature that enables users at the point of care… to very quickly look up and locate the specialist [the PCP recommends] using the app. Then, [the patient] can view that specialist’s cost and quality metrics and ask [their] provider: Is this the specialist we are talking about?”
Prater said the conversation can then turn to other option that the app calls the patient’s attention to and help start a conversation about higher quality and lower cost options for referrals.
For more on the huge $100 million round of funding, read the press release below: Keep reading>>