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Tebra Hits Unicorn Status; $72M Funding

Aims to Shopify for healthcare

Dan Rodrigues, who in 2004 founded the healthcare software company now known as Tebra Technologies Inc., has a simple answer for why investors are now valuing his Newport Beach firm at more than $1 billion.

“Market opportunity” in the new emerging era of healthcare, Rodrigues told the Business Journal.

“Consumers are paying more and more for their healthcare. They are demanding digital first. Many traditional healthcare practices don’t have the tools and know-how. Healthcare is one of those industries that has lagged others in the consumer experience.”

“Like Shopify is for e-commerce—Tebra is that operating system for healthcare,” Rodrigues said.

Tebra calls itself “the Digital Backbone for the Connected Healthcare Practice.”

Its services include a variety of digital tools for independent healthcare practices, including website management, online appointment scheduling, patient portal oversight, data analysis and billing services.

Golub, Toba Backing

On July 7, Tebra announced a $72 million funding round, one which gives the firm a billion-dollar valuation.

Golub Capital, a New York-based direct lender and credit asset manager with over $50 billion in capital under management, led the investment that includes both growth equity and debt financing.

“We are delighted to be a long-standing financing partner to Tebra, supporting them through multiple growth phases, add-on acquisitions and new product development since 2017,” said Peter Fair, managing director at Golub Capital’s Late-Stage Lending team. “Our mission is the success of our clients and being able to offer flexible solutions that meet the changing goals of their business.”

Another institutional investor in the latest round was Newport Beach’s Toba Capital, the largest venture capital firm based in Orange County; it was begun by Vinny Smith, the CEO who engineered the $2.4 billion sale of Quest Software to Dell.

Other institutional investors included CommonFund, HLM Venture Partners, OpenView Venture Partners, StepStone Group, Stripes Group, Montreux Equity Partners, Transformation Capital and Vivo Capital.

Kareo Founder

Rodrigues has a deep pedigree in software. Before he graduated with a Bachelor of Science in computer science from UCLA in 1998, he worked at two software firms and then co-founded Scour, a music search engine that was sold in 2000.

After a stint starting a boutique software consulting firm, he founded Kareo in 2004 as a cloud-based clinical and business management platform designed specifically for independent medical practices.

It raised more than $120 million from a variety of investment firms, including $55 million in 2015 from San Francisco-based Montreux Equity, which is also participating in the latest round.

Kareo ranked No. 6 on the Business Journal’s annual list of software companies in 2021 with 270 OC employees and 549 overall.

Last year, Kareo merged with Santa Monica-based PatientPop, a firm started in 2014 that has a growth-focused marketing platform to help healthcare providers promote their practices and attract new clients. It provides services like patient surveys, search engine optimization, reputation management and online scheduling.

That combination was also supported by Golub Capital, which has invested more than $137 million.

The combined company’s name, Tebra, was derived from “vertebrae” and symbolizes its “backbone role” in medical practices.

CdM Base

Tebra recently moved its headquarters from Irvine’s Park Place office campus to a 30,000-square-foot office along the water in Corona del Mar. It’s keeping its Santa Monica office, where PatientPop’s co-founders, Luke Kervin and Travis Schneider, serve as Tebra’s chief innovation officer and chief corporate development officer, respectively.

The combined company, which now has more than 1,000 employees, notes that while consumers on a smartphone can order a meal, hail a ride and buy a car, healthcare is a sea of complexity and fractured solutions.

“The software landscape is so fragmented,” Rodrigues said.

“Patients don’t have a consumer-friendly experience. Doctors are using seven different platform systems that don’t work well together.

“None of them are connected.”

$200M Run Rate

Nowadays, Tebra is on a $200 million annual run rate in sales by providing independent healthcare practices with a complete operating system that provides modern websites, scheduling, billing, payments and analytics, among other features.

Since the Kareo-PatientPop merger in late 2021, Tebra has launched a two-way product integration that allows both platforms to share scheduling information and physician availability. The integrated offering also reviews appointment information and sends out surveys for better reputation management.

Over 800 providers now use the combined operating system, and the company plans to grow significantly both into their existing base and the healthcare industry at large.

Altogether, Tebra has more than 100,000 providers who service around 90 million patients.

The company estimates there are 1 million providers altogether with a $25 billion total addressable market.

Next Steps

With this new investment, Rodrigues said Tebra is looking at launching new businesses such as credit card processing and telehealth that focuses on consumers with a “universal digital wallet” that will contain a patient health information.

“With this new investment from Golub Capital, we’ll be able to accelerate Tebra’s mission to unlock better healthcare by helping independent practices bring modernized care to patients everywhere,” Rodrigues said.

“Simultaneously, we will broaden our market reach and launch new solutions, helping an even larger number of physicians with digital tools and support to attract new patients, get paid quicker, and operate their practice more efficiently.”

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Peter J. Brennan
Peter J. Brennan
Peter J. Brennan has been a journalist for 40 years. He spent a decade in Latin America covering wars, narcotic traffickers, earthquakes, and business. His resume includes 15 years at Bloomberg News where his headlines and articles sometimes moved the market caps of companies he covered by hundreds of millions of dollars. His articles have been published worldwide, including the New York Times and the Washington Post; he's appeared on CNN, CBC, BBC, and Bloomberg TV. He was awarded a Kiplinger Fellowship at The Ohio State University.
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