We got an exclusive look at the presentation that convinced Tiger Global and Humana to invest in a startup’s bold vision to do hospitalizations at home at a $1.7 billion valuation

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  • At-home healthcare startup DispatchHealth said Wednesday it had raised $200 million in Series D funding.
  • The round, led by Tiger Global, valued Dispatch at $1.7 billion.
  • See the short pitch deck that earned the eight-year-old startup unicorn status.

At-home healthcare startup DispatchHealth is back with another nine-figure fundraise and a valuation to match.

The eight-year-old startup announced Wednesday that it raised $200 million in Series D funding at a $1.7 billion valuation. Tiger Global led the round, which also included participation from existing investors Alta Partners, Echo Health Ventures, Humana, Oak HC/FT, and Questa Capital.  The new funding comes less than a year after Dispatch raised $135.8 million in a Series C round.

The funds will go toward Dispatch’s expansion plans, which include beginning operations in roughly 100 total cities, up from 31 today. Oak HC/FT managing partner Andrew Adams told Insider that the round was dreamed up to help the startup capitalize on its growth during the coronavirus pandemic. Dispatch has raised more than $417 million since it launched in 2013.

The startup does home-based care mostly for more than 300 health plans. For people not on these health plans, Dispatch charges $275 at the time of treatment via credit card. Its healthcare professionals, including emergency medicine-trained physicians, visit people’s homes on-demand and provide medical care ranging from applying stitches to cuts to 30-day supervision following a bout with pneumonia. 

Now Dispatch is gaining steam as more care goes online and in the home amid the pandemic. It’s also happening at a time when companies are getting creative in how healthcare gets paid for.

Companies that provide virtual services saw rapid adoption when offices across the US shuttered, and in-home care became the preferred method for populations that were more at risk of severe COVID-19 complications if they were exposed during a hospital visit. 

Investors have maintained that the industry-wide shift won’t backslide once the pandemic abates, so companies like Dispatch are here to stay. In February, Dispatch signed a deal with Humana, a $50 billion health plan, to provide acute care for members, including folks with multiple chronic conditions. 

“For the health plan, there’s no lower-cost setting than the home,” Adams said. 

How Dispatch works

Dispatch is paid bundled rates for every kind of service it performs, which means it gets a flat fee even if the startup ends up spending more, CEO Mark Prather told Insider. It deploys its own healthcare professionals with a homemade tech platform and also works with other providers like hospital systems. It is also available to patients without insurance for a standard $275 fee per visit.

Say there’s a patient with emphysema, for example, who calls Dispatch. The company can conduct labs, X-Rays, and IV medications while figuring out if the person should go into the hospital, all paid for by the health plan. If it’s safe to stay home, and the patient is okay with that, Dispatch sets up remote monitoring, a way to contact doctors, and regular visits with attendants or nurses while the patient recovers. 

For many, that’s the safer scenario versus going into the emergency room. By Dispatch’s calculations, people in their 30-day care program are admitted into the hospital just 4% of the time, whereas more than 20% of folks who are discharged tend to be readmitted, Prather said. 

See the short pitch deck, provided by the company to Insider, that helped Dispatch raise $200 million. It omits two slides about the company’s growth strategy and proprietary tech platform.

Prather, Dispatch’s CEO, said that home care is often safer and more effective than going into hospitals. While emergency rooms are more efficient — they sort through 100 people in a waiting room fairly quickly — clinicians can make more thoughtful care plans for their patients when they get a deeper view into their lives and resources, he said.

Dispatch Health

Dispatch works with its own healthcare professionals and technology to manage people’s care while they’re at home. “For the last year with the pandemic, we had everything imaginable delivered to our front door,” Prather said. “So why not healthcare?”

Dispatch Health

The coronavirus pandemic helped push virtual care into people’s lives, but Dispatch’s revenue was already growing 100%, year over year, before outbreaks started, Prather said. Now it’s facing a $140 billion addressable market for in-home healthcare, roughly 10% of the $1.3 trillion we spend on facility-based emergency care. And Dispatch doesn’t face much competition. Startups Cityblock, Landmark, and Signify provide home care, with less emphasis on recreating hospital stays at home. Primary care companies like Oak Street Health don’t typically send clinicians into homes. That helped investors and Devoted determine its $1.7 billion valuation, Prather said.

Dispatch Health

Dispatch is planning to triple its geographic footprint in the US with the new funds from investors. In the future, Prather said that Dispatch could also act as a kind of marketplace for home care, layering other kinds of services into the platform through partnerships or acquisitions. Radiology, as one example, could be another opportunity to help Dispatch grow, because imaging tests are difficult to coordinate at home. Prather didn’t elaborate on how that would work.

Dispatch Health

Dispatch coordinates five kinds of healthcare: basic clinical care; acute care, like you might receive at an emergency room; advanced care, which is for complex conditions like emphysema that require a lot of monitoring; extended care for people with complex conditions or those who undergo surgery; and bridge care, which oversees patients after they’ve been discharged from the hospital. Its deal with Humana is for acute care.

Dispatch Health