Brooklyn-based Cityblock is bringing digital healthcare to a large, underserved market: Medicaid and lower-income Medicare recipients across the U.S.
A spinoff of Google parent Alphabet, Cityblock has achieved a $1 billion in valuation in just three years, with the latest funding round in March bringing in $192.25 million. That followed a $160 million round just three months before.
The startup operates from a platform of social justice and health equity for marginalized communities, eschewing the fee-for-service model in favor of a value-based one, collecting fixed payments per member and delivering care virtually in patients’ homes and their neighborhoods.
“Cityblock splits the cost savings that come from better outcomes with the healthcare payer,” the company’s website says. “Our financial structure squarely aligns the health needs of our members with our reimbursement — so that when our members need us the most, we’re able to show up.”
Cityblock’s most recent funding round was led by new investor Tiger Global with participation from existing investors, including Kinnevik AB, Maverick Ventures, General Catalyst, Wellington Management, Thrive Capital, Redpoint Ventures, Echo Health Ventures, 8VC and AIMS Imprint of Goldman Sachs Asset Management. The Series C extension brings Cityblock’s total fundraising since its founding in 2017 to about $500 million.
The company’s approach is apparently paying off, in more ways than one. Data from its first member cohort pointed to a 15% reduction in emergency room visits and a 20% reduction in in-patient hospital stays. Cityblock reported around 70% member engagement compared to the health plan average of 5% to 7% member engagement and said it receives average customer experience scores of over 85, compared to the provider average of 15. While delivering these outcomes, Cityblock is experiencing 3x year-over-year revenue growth.
“We’re incredibly proud and grateful that some of the world’s best and brightest healthcare minds have joined us,” said CEO and co-founder Iyah Romm in a news release announcing the latest fundraising round. “But more than anything, we’re excited for what this level of capital investment means for our member population. It’s clear that there is increased awareness of this massive problem of health inequity. We’re starting to see urgency from investors and industry leaders alike.”
Citiblock currently operates in Connecticut, Massachusetts, New York, North Carolina and Washington, D.C.