New Enterprise Associates were the investors in the Series B round, according to a news release.
The money will support a company that has grown to between 35 and 40 employees.
“We’re using it to further develop the CafeWell platform, which I think already is the leading program in the industry,” Margolis said. Along with product development, WellTok will be building its client-support and sales teams and finding partners to provide programming it can offer users, he said.
WellTok believes it is addressing a market that could be in the neighborhood of $13 billion, Margolis said. Monetizing the data CafeWell users generate could double that.
“If that sounds like a big number, keep in mind the healthcare industry is a $2.7 trillion industry,” he said.
WellTok pitches CafeWell to insurers and employers as a way to lower medical costs and gain insight about how consumers are using the plan and what their medical needs are. WellTok said it keeps consumer information confidential, and only provides employers with aggregate data.
WellTok hopes to carve out a niche by working with health insurance plans, accountable care organizations, and other plan managers. Competitors seemed to be focused on selling to employers, but WellTok thinks its potential customers will be more lucrative and have the ability to add hundreds of thousands of consumers to its user base.
“The insurance companies are at the top of the food chain, in terms of how the dollars flow,” Margolis said.
Margolis has built a successful healthcare IT company before. He founded TriZetto and ran the company through its startup phase, IPO, and eventual sale in a $1.4 billion leveraged buyout. TriZetto invested in WellTok before Margolis left the company.
