The San Clemente-based company, founded in 2010, late last month said it raised $168 million in an investment round led by healthcare investor Deerfield Management Co.
The Series D round of financing brings Crossover’s funding to over $278 million to date.
Most of that’s been raised in the past five years, as the firm has found a niche by serving large, self-funded employers—most of them in the tech industry—that act as their own medical insurance companies, using a combination of on-site or near-site healthcare clinics that it runs.
“We’re thrilled with the quality of our investors and the amount raised as we push toward what we believe healthcare should be,” Chief Executive Scott Shreeve told the Business Journal.
The oversubscribed round puts the company in “unicorn-range”—a term that refers to privately held startups valued at over $1 billion—Shreeve said.
Crossover Health serves more than 400,000 members with a mix of in-person and virtual services.
It has 48 health centers in 11 states.
The company is on pace to increase annual revenue 50% in 2021, Shreeve said.
That would place its revenue north of $150 million.
Crossover’s newest stakeholders are “cross-over investors” who invest in both private and public companies, according to Shreeve.
Investor participants include Deerfield, Perceptive Advisors, OrbiMed Advisors, Foresite Capital, Avidity Partners, SharesPost100 Fund, Irving Investors, and PFM Health Sciences.
“These investors want to cross that bridge between those two worlds,” Shreeve said.
“They’re looking for high-growth companies with a good market fit, and want to put capital behind companies that have de-risked their value proposition.”
Gurnet Point Capital, which invested $92 million in the company in 2016, retained its stake in Crossover Health.
The company’s next steps after the Series D funding, such as an IPO or other exit, have not been disclosed.
The funding is another example of Crossover’s rapid climb in the healthcare delivery sector.
Crossover uses an outcome-based model of care, rather than a traditional fee-for-service model, to help self-insured employers and traditional payers deliver better health services to their employees and members.
More than 85% of its employees are health professionals such as doctors, nurses, physical therapists and care navigators.
Its doctors are company employees, and the majority of Crossover doctors do not split their time with other practices, it said.
The company refers to its model as Commercial Advantage, which is a play on words to the increasingly popular Medicare Advantage model for senior citizens that include primary care and wraparound services. Crossover provides primary care, as well as physical medicine and behavioral health services.
The company increased its membership 25% in 2020, in large part due to a partnership with $1.6 trillion-valued Amazon (Nasdaq: AMZN) announced last August.
Amazon was attracted to Crossover because “it saw we would be able to execute on their large vision for healthcare,” Shreeve said.
Crossover now operates 17 health centers for some 112,000 Amazon employees and family members across five states. It’s in the process of building additional centers in the San Bernardino/Moreno Valley area and Detroit.
Other large employers have similar characteristics to Amazon, and they are likely to “lean into our multi-state facility, in-person, and online model,” Shreeve said.
Crossover clients include Apple, Facebook, LinkedIn, and Microsoft.
The company expects to add more on-site centers in 2021, as well as expand with traditional payers looking for value-based care for their members, Shreeve said.
New funds will bolster Crossover’s technology platform, which allows employers to manage patient data and claims data, as well as understand population health trends, he said.
The company has a robust telehealth platform, in part due to its acquisition of online provider Sherpaa in 2019.
Culture of Care
As Crossover continues its rapid growth, Shreeve said he is focused on maintaining a tight-knit culture of care.
“I focus a lot of my time on: How do you scale the magic? What I mean by that is, how do you take the culture of the company and maintain it through phases of growth? How do we articulate a crisp, clear narrative about our vision and mission to a broader audience?”
Crossover added about 400 employees in the past six months, for a total of 1,098 employees across the U.S., and listed about 33 open positions at press time.
While the company seeks the best talent in the nation for medical, engineering, data scientist, and sales roles, it likes to hire senior leadership locally, Shreeve said.
He added, “We are proud to be in Orange County and excited to represent the city of San Clemente as a digital health mecca.”