With one in four doctors on their platform, Practice Fusion has become the go-to company for electronic medical records. To further solidify their corner, the company just raised $34 million in a Series C round led by hedge fund Artis Ventures. The round values the company at close to $500 million, up from about $100 million on its last surge of financing. This brings the company’s total investment to about $64 million.
Other investors in the round include participation from long-time investors Felicis Ventures, Band of Angels, Glynn Capital, Ali and Hadi Partovi, Founders Fund, Morgenthaler Ventures, Scott Banister, SV Angel, Ghost Angel and Barton Asset Management, among other institutional and individual investors.
The company is the largest electronic medical provider in the US, and is the first free, web-based system. The majority of its revenue comes through advertising. More than 150,000 medical providers use the platform, serving over 40 million patients, about 10 percent of the US population. The company serves more than double the base of Kaiser and VA combined.
The money will be used to fund its growth strategy, extend its app platform, and nearly double its team of 180 to 300, hiring approximately 20 employees a month, the Wall St. Journal reported.
Federal funding to encourage physicians to switch to digital health records has fueled the company’s growth, as have financial penalties for clinics that fail to adapt. Medical providers using Practice Fusion’s platform have received around nearly $30 million in incentive government funds, according to AllThingsD.
“Not since YouTube have we seen a company with such spectacular growth, capable of having such a profound and lasting positive impact on our daily lives,” said Mike Harden, Partner at Artis Ventures. “By empowering doctors and patients with easy-to-use health management tools, Practice Fusion stands out as an establishment of genuine progress.”
Getting paid to use a free service obviously provides plenty of incentive for doctors. This latest round will work to take advantage of that momentum, cornering Practice Fusion’s market as it nudges out the competition.
Not that its free service has any problem making money. The company’s revenue for the first quarter of this year alone ranked in the seven figure range, up more than 500 percent the previous year, the Wall St. Journal reported.