Irvine-based medical software developer Kareo Inc. has merged with a marketing firm, in a deal that may boost its valuation to $1 billion.
The company on Nov. 2 announced it combined with Santa Monica-based marketing company PatientPop to form Tebra, a new all-in-one platform for independent medical practices.
Terms of the deal were undisclosed, although existing Kareo investor Golub Capital said it will contribute $65 million in growth financing to support the merger.
“We see a healthcare industry that’s changing rapidly, especially in the wake of COVID-19,” Kareo’s founder, Chairman and Chief Executive Dan Rodrigues told the Business Journal.
“Patients are demanding the same healthcare experience as other digital consumer experiences in their lives,” he said. “That’s what this merger is all about. Together, we can create the first truly all-online success platform that helps practices run the office and improve the customer experience.”
Tebra’s technology has 100,000 subscribers who deliver healthcare to 85 million patients, according to a statement from the companies.
The combined company may be valued as much as $1 billion, including debt, Bloomberg News reported. Company officials declined to comment on the valuation.
Irvine CEO
Rodrigues will run Tebra out of Irvine as CEO while PatientPop’s co-CEOs and co-founders, Luke Kervin and Travis Schneider, will serve as Tebra’s chief innovation officer and chief corporate development officer.
Founded in 2004, Kareo says it’s the only cloud-based clinical and business management platform designed specifically for independent medical practices.
Its tools include electronic health records, practice management, marketing, patient engagement and billing software.
It’s raised more than $120 million from a variety of investment firms, including $55 million in 2015 from San Francisco-based Montreux Equity Partners and Menlo Park’s Silver Lake Partners.
It says its platform, which helps users more efficiently and profitably run their practices, has more than doubled from 30,000 in 2015 to 80,000 currently.
The platform, which manages 80 million patient records, also processed $25 billion in insurance claims in 2019.
Kareo ranked No. 6 on the Business Journal’s latest annual list of software companies with 270 OC employees and 549 overall.
It also ranked No. 18 in the large company category on last year’s Business Journal list of Best Places to Work.
PatientPop
PatientPop, incorporated in 2014, is a growth-focused marketing platform that helps healthcare providers promote their practices and attract new clients. It provides services like patient surveys, search engine optimization, reputation management and online scheduling.
“Both businesses are very complementary,” Rodrigues said. “From marketing to the patient experience to clinical workflow and financial operations, we see Tebra as the connected practice of the future.”
Tebra’s name was derived from “vertebrae,” and symbolizes the “backbone role” it will serve in medical practice success; its breadth of offering will separate it from the rest in the growing healthcare technology space, according to Rodrigues.
It will have north of 1,000 employees based in Orange County and Los Angeles County, although the company expects its headcount to grow nearly 25% by next year, Rodrigues said.
At this time, Kareo and PatientPop will continue to operate as independent companies; officials are aiming to fully integrate the two firms under the Tebra brand by early 2022.
J.P. Morgan Securities LLC acted as exclusive financial adviser to Kareo. Fenwick & West LLP provided legal counsel to Kareo. Cooley LLP provided legal counsel to PatientPop.
