Irvine-based software startup Kareo Inc., a maker of software that helps manage small doctors’ offices, said on Monday it raised $9.5 million in venture funding.
Boston-based venture capital firm OpenView Venture Partners led the round. Adam Marcus, a principal at OpenView, is set to join Kareo’s board.
Kareo plans to use the funds to hire workers in customer service, sales, marketing and senior management, founder and Chief Executive Dan Rodrigues said.
“The biggest use of the funds is to grow the size of our team,” he said. “With this investment we have all the resources we need to execute our business plan.”
Kareo plans to double its local workers to 40 over the next six months, Rodrigues said.
The company’s Web-based software manages both administrative and financial tasks, including scheduling appointments, verifying insurance benefits, managing patient records, sending insurance claims, billing and generating financial reports.
Its customers are typically small medical practices with one to four doctors. It also targets companies that do outsourcing for doctor’s offices, known in the industry as and third party medical billing companies.
The software is sold via monthly subscription.
Rodrigues started Kareo in 2005 and raised an initial round of funding from Halsey Minor, a technology entrepreneur and investor who’s best known for starting CNET Technology Inc. in the 1990s.
He invests via his San Francisco-based firm Minor Ventures.
OpenView bought out Minor’s investment, according to Rodrigues.
He declined to give further details about OpenView’s ownership stake in Kareo.
Rodrigues is a serial entrepreneur.
He started and ran Scour Inc., a dotcom startup that was sort of a precurser to Apple Inc.’s iTunes, which allowed consumers to search the Web for free online music and video files.
At one point, Scour had raised more than $12 million from some high-profile investors, including former Walt Disney Co. chief Michael Ovitz and Ron Burkle.
Scour went south amid the technology bust and a flurry of lawsuits from entertainment companies. Its assets were later sold to CenterSpan Communications Corp. in 2000 for undisclosed terms.
Kareo doesn’t disclose financials, but is profitable and “cash flow positive,” according to Rodrigues.
The company has doubled both sales and subscriptions in the past year, he said.
