Sunday, 06 May 2012 06:41
New funding further establishes company’s place in healthcare transparency market.
Castlight Health successfully raised $100 million in a Series D round that included participation from two major unnamed mutual funds, as well as T. Rowe Price, Redmile Group, and previous investors.
Giovanni Colella, co-founder and CEO of Castlight, told Forbes that the Series D funding is meant as a step toward an initial public offering for the company.
Castlight has spearheaded the movement for more transparency in healthcare pricing as employers have asked employees to pay a larger portion of their healthcare. Castlight’s platform offers employees of self-insured companies the tools to shop for procedures based on cost and quality. In San Francisco alone, where Castlight is based, the difference between the highest and lowest charge for a procedure was $172,000, according to a study published by the University of California San Francisco.
In the United States health insurance premiums have increased by an average of 8 percent in the previous decade, whereas average household incomes have only risen by an average of 2.1 percent. As the number of high-deductable insurance plans continue to rise (the number of employees enrolled in high-deductable plans has risen to 13 percent from 3 percent in 2006 according to Mercer), the demand for more transparency has risen.
“The healthcare industry is in dire need of innovation,” says Bryan Roberts, co-founder and chairman of Castlight. “Castlight has the opportunity to dramatically improve the efficiency of the U.S. healthcare system, providing employers and consumers with the information required to make good cost and quality healthcare decisions.”
The newly secured $100 million will be used by the company to capitalize on growing customer demand for healthcare transparency solutions and should allow the company to further recruit and expand its salesforce.
By VINAY SINGH