Venture investors have the great honor of backing some of the most talented, passionate people in the world, all trying to solve really big problems. And sometimes, their companies also have really cool names. Last week we hit the trifecta – we backed a brilliant team going after a big problem with a cool company name – Circulation.
This is my third time working with Robin Heffernan, a twice successful entrepreneur with a PhD in Chemical Engineering from Harvard. Robin worked with me as a venture capitalist at my prior firm years ago and then was one of the first employees of an exciting portfolio company of ours (which she was instrumental in sourcing). Third time is a charm – it is a great privilege to work with her again as she scales Circulation with John Brownstein, her co-founder, who is the Chief Innovation Officer at Boston Children’s Hospital and Professor at Harvard Medical School; notably, he is also the Uber Healthcare Advisor – very relevant to the Circulation story. Additionally, I happen to serve on John’s advisory board at the Hospital. Together, those two successfully bootstrapped and sold their last company, Epidemico. Circulation is also very fortunate to have as a founding partner, Klick Health, the leading digital health agency.
Turns out non-emergency medical transport (“NEMT”) services is a significant industry, with nearly $6 billion spent annually on rides to and from hospitals and for clinical trials. Utilizing its preferred partnership with Uber to access its API’s, Circulation has built a transportation exchange whereby providers, payers and companies running clinical trials can provide comprehensive transportation offerings for patients through a central care coordination platform, which basically doesn’t exist today. As providers and payers embrace “value-based” business models, there is growing demand for lower cost, more reliable NEMT services to reduce “no show” rates and to improve patient discharge processes. There are more than 3.6 million patients who miss appointments each year, much of that is due to inadequate access to reliable or appropriate transportation.
Consistent with our fund’s focus on the “business of healthcare,” seemingly mundane issues around transportation have outsized impact on care delivery models. Analysts estimate that for every missed appointment, the provider has lost nearly $150 in revenue. The ability to get patients at the time of discharge out of the hospital quickly frees up beds that can be used for new patients, say nothing of the improved satisfaction scores recorded by those patients.
And the beauty of having Uber as a strategic partner, most everyone is now comfortable with consumer ride-hailing services, with no hesitation about getting in the back seat of a stranger’s car. Obviously there is considerable sophistication in the Circulation platform (HIPAA-compliant, checks rider eligibility, driver training, ride authorization, etc.) versus simply hailing a taxi, using paper vouchers. And care coordinators embrace the level of insights from now being able to manage holistically all transportation costs while creating a detailed audit trail.
Also consistent with our investment strategy is our seed program. We expect that a number of the core holdings in this fund will be derived through our aggressive seed investment program, affectionately called “Flare Ignite” (branding cred goes to my partner’s wife, Kristi Geary) As we did with our Executive Partner, Bob Sheehy in our Bright Health investment last year, Flare is excited to seed exceptional founders addressing enormous market needs. We set a relatively high bar for our seeds as we treat each of them as core holdings, committing all of the firm’s resources even though we may have initially invested only a modest amount of capital.
And not all of the Flare Ignite seeds need to have really cool names…