June 17, 2016
Wall Street Journal Features Solera Health
Solera Health Raises $4M To Battle Diabetes
By Deborah Gage
There are thousands of community organizations, from Weight Watchers International to the YMCA, that help people lose weight and live healthier lives. And there are 86 million people in the U.S. at risk of developing diabetes, according to the American Diabetes Association.
But there has been little so far that unites these groups. Solera Health Inc. wants to become that link and has raised another $4 million to keep going. The funding, a Series A-1 round, is expected to take the company to break-even this year, according to founder and Chief Executive Brenda Schmidt.
Diabetes is the first chronic disease that Solera is tackling. The company is building an online marketplace that connects health plans with coverage for doctors and patients to community organizations, digital organizations and nonprofits that help people prevent or manage diabetes.
Solera’s mission is spurred in part by the CDC’s National Diabetes Prevention Program, which was developed in the wake of the Affordable Care Act and sets standards for organizations like the ones above. In March, the CDC’s program was declared eligible for Medicare coverage by the Department of Health and Human Services.
Solera acts as a single point of contact in this ecosystem, connecting people with programs, handling insurance claims and tracking data on programs’ quality.
“We don’t get paid unless a member enrolls in a program and meets the outcomes, which is weight loss,” Ms. Schmidt said. “Our incentive is aligned with the delivery network, and that’s different from other payment models.”
Ms. Schmidt launched Solera in October after nearly a decade of experimenting with other business models to try to encourage public health. While Solera is an integrator, it contracts with organizations and is not delivering services or programs itself, acting instead as “a data tech platform,” she said.
Hypertension and depression are also candidates for Solera, since there are emotional and lifestyle components to those diseases, according to Chief Operating Officer Mark Miola.
Investors in the A-1 round include BlueCross BlueShield Venture Partners, Sandbox Industries and SJF Ventures, which is a new investor in Solera and has a double-bottom-line fund that makes investments to deliver social impact.
Sandbox is acting as an investment manager for BlueCross BlueShield and has invested out of a fund supported by 23 individual Blue Cross entities, according to Dan Phillips, managing director at Sandbox and a Solera board member.
While health plans have decades of experience building clinical networks through doctors and hospitals, nonclinical programs “haven’t been tied together in a way that allows a Blue plan to get their members to the right resources outside of doctors and hospitals,” he said.
Solera has now raised $7 million. Its valuation wasn’t disclosed but has doubled since the company’s $3 million Series A round last fall, Ms. Schmidt said.