Redox, a Madison, WI-based startup that develops digital tools that enable healthcare applications to access data from electronic health records systems, says it has raised $9 million from investors.
New York-based RRE Ventures led the Series B financing. Other participants in the funding round included return backers .406 Ventures (in Boston), HealthX Ventures (Madison), and Flybridge Capital Partners, which has offices in Boston and New York. .406 Ventures led Redox’s $3.5 million Series A round, which was announced in late 2015.
“The free flow of healthcare data is critical to accelerating the discovery and adoption of solutions that improve our health,” says Niko Skievaski, co-founder and president of Redox. “We couldn’t be more excited to be ushering forth this future of technology-enabled healthcare.”
Launched in 2014, Redox says its application programming interface (API) can be used to talk to software developed by leading health records vendors, including Cerner (NASDAQ: [[ticker:CERN]]), eClinicalWorks, McKesson (NYSE: [[ticker:MCK]]), and Epic Systems, which is based just southwest of Madison, in Verona, WI.
On its website, Redox says it has partnered with other well-known vendors, including Allscripts (NASDAQ: [[ticker:MDRX]]) and Athenahealth (NASDAQ: [[ticker:ATHN]]), in an effort to make it easier for developers to demonstrate applications they’ve created to prospective customers.
The community of healthcare providers, payers, and software builders Redox works with comprises more than 80 organizations. They include Carlsbad, CA-based Breg, which helps clients track orthotic devices; Kinvey, which is based in Boston and specializes in providing mobile back-end services; and Grafton, WI-based HealthLX, which develops tools designed to make health data flow more fluidly between systems.
“The proliferation of healthcare applications promises better data, better patient care, and better outcomes,” says Raju Rishi, a general partner at RRE Ventures who recently joined Redox’s board of directors. “Redox is helping application companies and health systems alike to realize that promise.”
Other Madison-based startups that have raised large Series B rounds in recent years include Propeller Health ($14.5 million, announced in 2014); EatStreet ($10 million, 2014); and Catalyze ($6.5 million, last September). Like Redox, Catalyze helps healthcare organizations with data integration; however, it also provides hosting services, which is not a major focus for Redox.
Another difference between Redox and Catalyze—both of which employ numerous former Epic Systems employees, helping to form the beginnings of a healthtech cluster in the Madison area—is in their approaches to data integration.
Redox favors a “hub-and-spoke” model under which a healthcare provider only needs to connect to Redox once to be able to integrate with any of the dozens of applications the startup works with. If a provider sees an application it’s interested in purchasing and using—and the app has already been configured to send and receive data via Redox’s API—the company can simply “turn on” the needed data feeds without having to do any additional development, according to creative director George McLaughlin.
Catalyze, meanwhile, helps its customers set up “point-to-point” integrations that are unique to each combination of health system and software application.
In Redox’s press release announcing the company’s latest funding round, co-founder and CEO Luke Bonney argued for the company’s “networked” method for integrating data.
“We founded Redox around the idea that a networked approach is the only scalable way to achieve the promise of full interoperability,” Bonney says. “We view it as our mission to help the industry break the habit of building point-to-point connections that are expensive, unreliable, and ultimately exacerbate the problem. Our interoperable network becomes more efficient with each node we add.”
