Direct Healthcare Startup Nomi Health Raises Whopping $110 Million In Series A Funding
Trying to disrupt the United States healthcare industry is big business, at least for one company trying to do just that.
Nomi Health, a startup that delivers health services directly to millions of Americans without going through third-party health insurance, announced today that it has raised $110 million in Series A funding.
“Our Series A speaks to the scale of the challenge Nomi Health dared to undertake within a $3 trillion market,” said Mark Newman, founder and CEO of Nomi Health. “Nomi’s impact underscores that the people who built our broken system cannot fix it.”
The company launched in 2019 and currently serves 30,000 people per day across 10 states. Local governments, universities, and businesses contract with Nomi to provide basic healthcare services, such as Covid-19 testing, vaccinations, and treatment, as well as other preventive screenings. The company brings mobile care units to jails, schools, public housing, long-term care facilities, farms, and factories.
According to Newman, the company will use the funds to expand where and how many people it directly cares for. It will also expand its direct healthcare purchasing business and hire additional clinical and technical staff.
The funding round is co-led by Rose Park Advisors, a venture firm associated with the late Harvard Business School professor Clayton Christensen, and Arbor Ventures, a global fintech venture capital firm.
“Arbor invested in Nomi Health because it solves one of the largest problems facing the U.S. healthcare system, which is that the large incumbent healthcare companies are riddled with operational and technological inefficiencies and consume 30 to 50% of every healthcare dollar,” said Melissa Guzy, cofounder and managing partner of Arbor Ventures.
Nomi’s funding reflects broader digital health investment trends: more companies raising more venture capital earlier in their lifecycles.
According to Rock Health, in the first three quarters of 2021, digital health startups raised $21.3 billion—more than the $14.6 billion raised in all of 2020. Among the 541 deals through nine months of the year, the average investment was $39.4 million, up from the $31.5 million average deal in 2020.
Nomi is not alone in far surpassing average investment levels; 62 other companies raised at least $100 million this year. But notably, Nomi’s funding is more consistent with Series C—a later investment round in which typically older companies raised an average of $114 million investment—than Series A, which averaged $18 million in 2021 so far.
“While Series A rounds sizes and valuations are increasing across the venture industry, Nomi Health stands out as a very special Series A company,” Guzy said. “Their ability to execute and to scale are rare, allowing them to impact healthcare for the better as the appetite to transform healthcare in our country expands.”
Nomi made news earlier this year for donating $2 million to wipe out $225 million worth of medical debt for 176,000 Americans through a partnership with nonprofit RIP Medical Debt.
Nomi has also drawn scrutiny for its no-bid contract from the state of Tennessee, to which the company has previously responded.
“We have no say in government procurement, let alone ongoing feuds and dysfunctional relationships between health departments and leadership inside of states that have become front-page national news in Tennessee,” Newman said.
According to Newman, it has been confirmed that Nomi delivered on all the terms of its agreement in Tennessee. He stands by Nomi’s work in “care deserts”—such as rural areas, public housing, and prisons—particularly during the pandemic.
“In the early days of the pandemic, we were often the last call of states and counties after the traditional healthcare system simply could not rise to the challenge,” Newman said. “Today, Nomi Health is often the first call on account of our track record and impact.”