- The General Catalyst portfolio companies Commure and Athelas are combining in a $6 billion deal.
- The new company could go public in the next two to three years, its CEO told Insider.
- The newly merged Commure plans to make more acquisitions and hire aggressively to get there.
Commure and Athelas, both General Catalyst-backed startups, are joining forces to bring more artificial-intelligence technology to hospitals and health systems.
The new company, Commure, intends to stack Athelas’ software on top of Commure’s data platform for health systems. Tanay Tandon, the founder and CEO of Athelas, will lead the combined company after General Catalyst invests $70 million in it at a $6 billion valuation.
Commure, which was cofounded by General Catalyst’s CEO and managing director, Hemant Taneja, and incubated by the firm in 2017, provides a common data language for health systems to help with tasks such as moving patients from provider to provider. Athelas, which was founded in 2016, began by developing remote-monitoring devices for measuring things like glucose and weight, and has since expanded into developing software for tasks such as AI-powered revenue cycle management for managing patient billing and insurance claims.
Tandon claims that the companies are on track to generate $150 million in revenue by the end of the year.
One of the merger’s goals is to help both companies move closer to a public-market debut. Tandon expects Commure to go public within the next two to three years.
“It’ll naturally become clear that this is going to be one of the big winners in healthcare,” he went on to say.
He told Insider that Commure planned significant growth in the coming year while preparing for an IPO, including by acquiring other startups, developing more software tools for health systems, and “aggressively” hiring across the board.
Tandon stated that both Commure and Athelas had at least five years of cash runway on their own, giving the combined company significant reserves to make more deals.
“With Commure, we’re going to be quite acquisitive,” Tandon went on to say.
The company will look for third-party tools that have native integrations with electronic health record systems such as Epic or Cerner, implying that the third-party tool is directly connected to the EHR for easy data exchange. According to him, these integrations can take years to complete.
According to him, Commure will consider companies that create those tools in a variety of categories, including credentialing, contracting, and patient engagement.
He suggested that Commure might be interested in acquiring a company that specializes in specialized remote patient monitoring, such as in-home monitoring technology for chronic obstructive pulmonary disease, which he said “would take a long time for us to build ourselves.”
More product launches
The majority of Commure’s growth is due to two products: Athelas’ AI-powered revenue cycle management solution and Commure Strongline, a workplace-violence product that includes wearable “panic button” badges for healthcare staff. Tandon claims that both products have seen significant adoption in the last year.
Athelas’ product lines, including remote monitoring and revenue cycle management technology, will continue to be available both independently and through Commure’s data platform.
“In an ideal world, this would mean net new features for our customers with no transition costs or time on their end.” “It should be smooth,” he said.
The merged company also intends to introduce new capabilities, such as automated patient-engagement technology that will use large language models to automate administrative tasks such as reviewing patient forms. Tandon estimates that Commure will launch that product line by the end of 2023.
Expanding its customer base
Tandon said that Commure hopes to add more health-system customers in the coming year, as well as expand the number of providers it works with among existing clients.
Tandon stated that Commure intends to hire aggressively to support its growing customer base, including for its sales division and engineers who will work directly with health-system clients on tasks such as onboarding.
Following the merger, Commure intends to retain employees, bringing its total head count to around 800. Tandon said the company has about 100 open positions and expects to hire hundreds more people in 2024.