Startups in home-based care have exited a “growth at all costs” phase and entered into a new one filled with financial strain and layoffs.
But Homeward – a home-based care provider focused on rural America – hasn’t felt that transition. It has always had a more conservative approach to long-term growth, and now, it has even more runway thanks to a massive funding round and new partnership.
“[The industry has] sort of exited the phase of the market where the mantra was growth at all costs,” Amar Kendale, co-founder and president of Homeward, told Home Health Care News. “We’re in a much more sober and mature phase, which plays to our strengths.”
On Wednesday, Homeward announced it had raised $50M in a Series B. It also announced its first at-risk partnership with Priority Health, a contract that will allow Homeward to manage up to 30,000 Medicare Advantage patients in rural Michigan.
The funding round was co-led by ARCH Venture Partners and Human Capital, and also supported by initial investor Hemant Taneja of General Catalyst.
Homeward officially launched in March behind the leadership of Livongo veterans Kendale and CEO Jennifer Schneider. Its plan is to focus on improving access to primary and specialty care in rural communities, partly through a home-based care approach.
Leaders of the company have called it the first comprehensive provider to take on full risk in rural markets.
After the Series B, the company will be able to accelerate its mission.
“We’re now a very well-capitalized company to not only tackle our initial markets, but we’ve also learned that there are other payers, other states and other regions where the needs are just as great,” Kendale said. “That’s really what this capital allows us to do, is to start bringing similar services online tailored to those other regions in partnership with other payers.”
The new funding will allow Homeward to be more efficient with its growth strategy while expanding its reach. However, that doesn’t mean the company won’t have reasons to be financially conservative.
“We’re going to spend very responsibly because, if anything, the downturn in the market allows us to be more frugal,” Kendale said. “We’re seeing some correction when it comes to the cost of acquiring talent and I think that is going to be a big enabler for companies like us who are building in this phase. The opportunity to grow the business from a strategic perspective, [and the ability to] stay very disciplined from the cost side, gives us a lot of runway.”
The funding news would have been enough good fortune for one day, but Kendale said he’s most excited about the opportunity the partnership with Priority Health presents as Homeward looks into the future.
“The relationship with Priority Health really supports the concept that we need to do this in partnership, that payers alone can’t tackle the magnitude of this problem,” Kendale said, referring to the underserved rural parts of the country. “Providers alone can’t tackle the magnitude of the problem, so the way we’ve really brought ourselves together around this is to say, ‘We need to evolve not just the payment models — which we’re doing with value-based care as a central tenet — but also the care delivery model at the same time.’”
Priority Health members will have access to Homeward’s technology-enabled care teams, which will be available to members in their homes, virtually, or in the community through mobile care units.
Homeward also sees this first partnership as a way to draw up a playbook on how to partner with a payer.
“What I’m excited about is how [this partnership] can create a template for us to work with other health plans in a similar model of partnership,” Kendale said. “It’s going to require innovation, it’s going to require trust, it’s going to require novelty in how we approach things. So we’re just ecstatic.”