IkaSystems, a Southborough, MA-based provider of software for the healthcare payer market, said it has finalized an investment from New York City and Palo Alto, CA, private equity fund Essex Woodlands Health Ventures, a month after reeling in capital from Providence Equity Partners. The terms of both deals were undisclosed, but Venture Wire reports that Providence and Essex Woodlands pumped a total of $120 million into the company.
Last month the firm revealed that Eran Broshy, an advisor to Providence, RI-based Providence Equity Partners, had become chairman of the software firm. Peter O. Wilde and Jesse Du Bey of Providence have also joined the board of directors. Steve Wiggins, a managing director of Essex Woodlands, who is managing that firm’s interest in ikaSystems, was an existing board member at the company and invested in ikaSystems before he joined Essex Woodlands in 2007.
The back-to-back investments from deep-pocketed private equity players should boost the profile of ikaSystems, which has already garnered awards from analysts for its Web-based software called “ikaEnterprise.” The software helps healthcare payers automate the payment lifecycle for all categories of health plans, including individual plans, employer plans, Medicare, and Medicaid. Ravi Ika, the founder and CEO of the company, launched the firm in 1999 believing that legacy systems lacked the flexibility to enable health plans to adapt to changes in the healthcare industry, according to the company’s website.
The company’s backers seem to share that philosophy. “They are exceptionally well positioned to benefit from health insurance reform,” said Wiggins, in a statement. “I believe they have the best people, the best software and the best strategy for responding to changes in the healthcare industry.”
Essex Woodlands manages $2.5 billion in commitments and Providence has $22 billion in commitments.
