Innovacer CEO Abhinav Shashank was 26 when he walked away from paying customers like Disney and NASA to bet his general data analytics company on healthcare instead. Then he and his cofounders moved into Mercy Medical Center in Des Moines, Iowa, for four months. They lived inside the hospital’s IT department, seeing firsthand why doctors still start every visit by asking a patient’s name and date of birth. Word spread to hospitals in Nebraska, Texas, and California before Innovaccer had much of a sales team at all.
That 2016 pivot allowed Innovaccer to cross $200 million in annual recurring revenue, Fortune learned exclusively. The current metric is now up from roughly $130 million last year.
Innovacer pulls data out of hospitals’ electronic health records and insurance claims systems, unifies them, and makes them usable for AI tools and care coordination. The company has raised $675 million total, including a $275 million round last year from B Capital, Danaher Ventures, Generation Investment Management, Kaiser Permanente, and Microsoft’s M12. It works with seven of the top ten U.S. health systems across 80 million patient records.
Innovaccer’s bet is on a decade of unglamorous plumbing, the data infrastructure connecting hospitals’ locked up electronic health records and insurance claims systems. “Healthcare doesn’t have internet,” Shashank told Fortune. Without that layer, he argues, AI companies are “trying to put cars on a road that does not exist.”
U.S. healthcare spending will top $6 trillion this year, and by Shashank’s own estimate, $1.5 trillion of it is pure administrative waste, forms, phone calls, denied claims, nothing that helps a patient. His customers reported roughly $2.5 billion in savings to federal regulators last year alone, mostly from care coordination rather than new hardware.
Gartner is validating the thesis this week too, naming Innovaccer a leader in its first ever healthcare technology Magic Quadrant, ranked above Microsoft, Google, AWS, and Salesforce on vision and execution. Early backer Manthan Shah of WestBridge Capital said the firm’s 2016 check was a wager that “healthcare’s data fragmentation was an infrastructure problem.”
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