NexHealth Hits $1 Billion Valuation In Bid To Rewire Healthcare Data Flow Leave a comment

NexHealth cofounders Alamin Uddin (L) and Waleed Asif (R).

NexHealth / Clara Rice

Alamin Uddin has no need for the acronym soup that drives most healthcare data sharing, like the HL7 and FHIR standards that are all the rage among most health tech folks. That’s because his San Francisco, California-based company NexHealth isn’t dependent on them. Uddin, 29, and cofounder Waleed Asif, 29, have built their own data sharing highway that eschews the patchwork solutions that dominate the landscape. It’s a clean, clear road that runs back and forth between the dusty servers sitting in the offices of doctor and dentist offices, various electronic health records and across apps used by other public and private companies.

“The problem that we’re solving as a company, for the doctors, the patients, and the developers is that there is overall a lack of innovation in healthcare,” says CEO Uddin. He and CTO Asif are alums of the 2018 Forbes 30 Under 30 Healthcare list. “We’re building the tools and the infrastructure to accelerate that pace of innovation.”

So far NexHealth is managing the health records of 68 million patients. Its customers range from companies like SmileDirectClub and Quip to large dental and medical practices with dozens of offices like Mid-Atlantic Dental Partners and Advanced Dermatology. It’s that existing traction, coupled with its future potential, that helped the company to secure a $125 million Series C round at a $1 billion valuation.

NexHealth has two main lines of business. The first is helping doctors and dentists digitize their practices and help power a better patient experience in everything from booking appointments to payment. What’s unique here is that NexHealth doesn’t just plug-in to the existing electronic health record. The company goes in and extracts all the patient data that is sitting on physical servers in these offices. It’s tedious but it also means that rather than cobbling together a Frankenstein’s monster from bits and pieces of other systems, they are going to the original data source and rewiring everything from the start. The second is geared towards developers at other healthcare companies who don’t want to have to integrate with hundreds of different electronic health records and can simply use NexHealth’s piping.

“I very much see NexHealth as a data infrastructure company,” says Josh Buckley, founder of Buckley Ventures, who led the round and sits on the company’s board. “They abstract away a lot of the complexity to build in healthcare.” The market “desperately wants what NexHealth is building,” he says, which is why the company has been able to amass so many records and drive adoption among tens of thousands of small- and medium-sized practices, driven by a $31 million Series B round last June. In 2020, NexHealth raised a $15 million Series A round.

“Without NexHealth, it will take you two to three years to go and sign deals with each and every one of the electronic health records companies, integrate with them and launch your product. With us, it takes literally three weeks.” 

Alamin Uddin, CEO

Buckley and Uddin compare it to what Stripe did for the back-end of credit payment processing– creating the structure that companies could now just plug-in to start interacting with a bunch of different vendors. “Without NexHealth, it will take you two to three years to go and sign deals with each and every one of the electronic health records companies, integrate with them and launch your product,” says Uddin. “With us, it takes literally three weeks.”

And, from there, the possibilities are endless. “The history of technology is that when you lower the friction to building things that tends to create innovation,” says Buckley. Other individual investors in the round include two early hires at Stripe, Lachy Groom and Shreyas Doshi, and the founder of fintech startup Ramp Eric Glyman, among others.

The fintech analogy is also apt, because one of Uddin’s goals with this capital is to “change the image of what it means to be building in health tech.” “If you’re intelligent and smart, your time will be way better spent on health tech than fintech or crypto,” he says. “First of all, it’s a massive space at $3 trillion just in the U.S. And second, is it just good for people and society.”

NexHealth has around 160 employees today and the company hopes to expand to around 300 people by the end of the year. While initial growth has focused on helping digitize offices, the company is making a big push into commercializing its product for developers, as the company aims to bypass the other standards like HL7 and FHIR with a simpler, cheaper alternative.

Looking towards the future, Uddin hopes in a couple of years that most people will have a couple of healthtech apps on their phone that will be “powered by NexHealth on the back-end,” he says. “That’ll make me super happy.”

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