Healthcare cloud services company ClearDATA Network closed an over-subscribed $14 million Series B funding round. The funding provides the company with capital to maximize its growth opportunities and momentum in the market, says ClearDATA President and CEO Darin Brannan.
Investors in the B round of financing include the Merck Global Health Innovation Fund, Excel Venture Management and Norwest Venture Partners. ClearDATA previously had a first closing of its Series B round and held a second closing for strategic investor Merck Global Health Innovation Fund.
Driving ClearDATA’s growth? The $35 billion healthcare information technology market that is expanding at an estimated 20 percent annually, fueled by the need for thousands of healthcare providers to migrate to electronic records and maintain vast amounts of data. The industry-wide transformation from a volume- to a value-based system relies heavily on capturing and analyzing healthcare data to improve the quality of care while reducing costs, Brannan points out.
Never mind that Brannan has a track record of building and growing tech companies from the outside and the inside. He spent some time at venture capitalist firms, including at Norwest Venture Partners, one of ClearDATA’s investors.
[See also: Two EHR firms tap power of the cloud.]
He founded Web.com, Verio and ViaNet, grew them and took them public.
As he sees it, the ace in the hole at ClearDATA is that the company -- unlike most other cloud companies -- is focused solely on healthcare.
"You can’t just bring kind of a complex, general technology platform into this market without materially changing the features, functionality, the way you deploy it, the way you fulfill it and service it, support it," he said. "There are too many things that have to change because of the complexity of healthcare."
Brannan has high expectations for himself and his colleagues.
"We don't have a mission to be a cloud-hosting company per se," he said. "Our mission is to change healthcare – be a leading change agent."
Brannan joined ClearDATA in 2011 (the company launched in 2009). He had already identified what the healthcare market needed.
"What we found consistently is they need to adapt rapidly to new security required, to new advanced Web applications to EMR, and it’s hard for them to do that because their infrastructure is 10 to 15 years old – in a sense, it’s broken," he said. "My view is that's the kind of bread and butter of the first thing we can do is fix that infrastructure with a cloud-based, purposed-built environment."
[See also: Has the cloud found its moment?.]
Today, ClearDATA’s HIPAA-compliant cloud computing platform serves more than 300,000 healthcare professionals and secures tens of millions of healthcare records. The company hosts data and applications for many provider and hospital organizations, and healthcare software and service vendors.
"The IT demands on healthcare organizations are greater than ever -- and they will continue to grow as big data and analytics take hold in the industry," Brannan said. "Our investors recognize the escalating need for hosting and services in the cloud that can help these organizations reduce IT costs while improving productivity, reliability, security, regulatory compliance, business continuity and agility."
"ClearDATA is addressing major issues in the healthcare industry by providing meaningful cost reductions and improving the manageability and security of healthcare data and applications," said Robert Abbott, general partner, Norwest Venture Partners.
"ClearDATA has the potential to be an important data steward for protected health information in the health care industry," said Joe Volpe, investment principal for Merck Global Health Innovation Group. "As the need to analyze vast amounts of data increases, ‘big data' presents opportunities to improve patient health."
