It’s easy to leave out Green Bay in conversations about Wisconsin’s tech startup scene, but Packer country grabbed the spotlight today with healthtech startup Aver Informatics announcing an $8.5 million Series A investment from some prominent national names.
It’s possibly the largest capital raise by a Green Bay-based startup, Aver CEO Kurt Brenkus said, and it’s certainly among Wisconsin’s larger funding rounds in recent memory. (Last year’s largest Wisconsin VC deal was $9.3 million for Madison-based StudyBlue, as Xconomy previously reported.)
GE Ventures and Drive Capital co-led Aver’s $8.5 million round. Drive Capital is the new Midwest-focused VC firm formed in Columbus, OH, by Sequoia Capital veterans Mark Kvamme and Chris Olsen. In January, Drive Capital closed on its $250 million fund, the second-largest inaugural fund raised nationwide in the past year, according to Forbes.
Brenkus (pictured above) said Aver previously raised $2.5 million over two angel funding rounds from investors including Madison, WI-based Wisconsin Investment Partners; Oshkosh, WI-based Angels on the Water; Tom Shannon, who now leads the nonprofit BrightStar Wisconsin Foundation; Al Zeise, CEO of De Pere, WI-based IT firm ZyQuest; and Jeff Harris, a former Apogent Technologies executive.
The latest investment will help Aver, which Brenkus co-founded in 2010, accelerate its growth and hire more software engineering and sales employees. Brenkus intends to add at least 16 people to the current staff of 10.
Aver has created data management software that simplifies the healthcare reimbursement process, an increasingly crucial goal within the healthcare reform, as the industry shifts from the traditional fee-for-service model, where physicians and hospitals are reimbursed for individual services, to a supposedly more cost-effective system in which Medicare and other payers will bundle payments across longer “episodes” of care.
“We’ve written software to translate those rules for reimbursement and be able to turn that into actionable and advanced intelligence and analysis on top of claims data,” Brenkus said in a phone interview. Aver’s technology can help customers such as healthcare plans or hospitals implement bundled patient care payments in a matter of weeks or even days, instead of years, he added.
Aver has 15 customers nationwide, including newly announced deals with University of Pittsburgh Medical Center and Molina Healthcare.
A year ago, Aver was one of 13 startups chosen for an inaugural three-year entrepreneurship program backed by GE and StartUp Health, a healthtech incubator. That program helped Brenkus’ team connect with VCs around the country. Aver had the “pick of the litter” among potential investors in Silicon Valley, Boston, and elsewhere, and it found the right fit in Menlo Park, CA-based GE Ventures and Drive Capital, Brenkus said.
Drive Capital was a particularly good match because of its commitment to the Midwest and the shared belief that it’s possible to “grow truly world-class companies here,” Brenkus said.
He acknowledged that northeastern Wisconsin isn’t seen as an innovation hub, but he says it’s a good location for his company because of the presence of large healthcare insurers like UnitedHealthcare and the bright minds being molded by local universities like Lawrence University and University of Wisconsin-Green Bay. (Brenkus’ career includes a stint directing 14 global service centers for UnitedHealth Group (NYSE: [[ticker:UNH]]), UnitedHealthcare’s owner.)
“There’s all this great talent that’s walking around” the Green Bay area, Brenkus said. “And one of our goals was to grab that talent before the brain drain happens and to also show that innovation can live anywhere, as long as you’ve got the right idea and the right problem that you’re solving.”
For Aver, that will require further developing its software and beefing up marketing efforts so it can compete with bigger, more established healthtech companies like McKesson and TriZetto, Brenkus said.
“We’re building out our sales and marketing arm to really compete and go right up the middle at the large, incumbent players,” Brenkus said. “We think we’ve got the technology that can do it.”
