Irvine-based Kareo Inc. has its sights set on big growth driven by sales to small medical practices.
And the company is poised for more, thanks to a $55 million capital infusion in late July by its investors, including San Francisco-based Montreux Equity Partners and Silver Lake Partners in Menlo Park.
Kareo makes and sells cloud computing-based software and other technologies for small medical groups. Its core customers are practices with 10 or fewer doctors or other non-physician providers, such as physical therapists.
Privately held Kareo expects to have “well in excess” of $50 million in revenue this year and is working toward profitability, said founder and Chief Executive Dan Rodrigues.
It has 550 employees, 250 of whom work at its Park Place office in Irvine. The others are spread over San Francisco, Las Vegas and Costa Rica.
The new round of investment will be used to boost its product lineup and “really, just to continue to expand our reach to independent physician offices,” Rodrigues said in an interview at Kareo’s corporate office.
“Today, we believe we have somewhere around 5% of the market—there’s still a lot of market opportunity ahead of us,” Rodrigues said.
Kareo has about 30,000 subscribers of its services, according to Rodrigues, who estimates a market potential of 775,000.
“We believe that small practices have always kind of served as the foundation of the healthcare delivery system,” Rodrigues said. “We believe that still remains true today.”
Kareo is putting money into product development in order to expand offerings to meet market opportunity.
Rodrigues said the company is adding to its original core of practice management and billing software as an example.
“We now have a more comprehensive platform really across all the major functions small practices deal with today, from the clinical side of their practice with electronic health records to the billing and administrative side of the practice, and even now into new areas that we’re investing in like practice marketing and patient communications,” he said.
DoctorBase
The company is using deals to branch out into new areas—Kareo bought San Francisco-based DoctorBase Inc. for an undisclosed price in March.
DoctorBase brought Kareo various marketing and patient communication services, including reputation management, online booking, appointment reminders and mobile secure messaging.
