Chronic Disease Focus Helps Healthrageous Raise $15 Million

10/16/12Follow @cathyarnst

Healthrageous, a Boston-based startup that provides people suffering from chronic illnesses with tools to manage their health, said today that it raised $6.5 million in series B financing from North Bridge Venture Partners, Long River Ventures, Egan-Managed Capital and an unnamed investor.

The two-year-old firm’s second round brings total investments to more than $15 million, and it plans to use the new money to further scale up its health-tracking devices and improve its machine learning technology.

Healthrageous is one of a number of startups seeking to capitalize on the “gamification” of healthcare, using technology and social media to encourage individuals to adopt healthy habits.

The company’s software ties to a variety of devices, mobile apps, social networks, and other tools to monitor the health of individuals and deliver biometric feedback and interactive digital coaching. By collecting health data from people, such as blood pressure and weight, Healthrageous can design an individualized health improvement plan to help patients with chronic conditions set goals and achieve them.

The company spun out of the Center for Connected Health, an incubator run by Boston’s Partners HealthCare. But since its founding, Healthrageous has shifted from targeting a broad range of consumers to focusing on those with chronic illnesses, such as diabetes or high blood pressure.

“The wellness space was way too crowded, with lots of free apps,” CEO Rick Lee says. “Since the chronically ill are the most expensive members of a health plan, we can offer far greater value by helping them manage their health.” Lee says the company has signed up four health insurers and 31 employers so far, with 10,000 people using its products.

Healthrageous has also reconstructed its software to make it more robust and compatible with virtually any digital health device, Lee says, and plans to go live with the new version in the first quarter of 2013.

Lee says the shift to a chronic disease focus is paying off. “About 95 percent to 97 percent of those that we target sign up, and we still have a 70 percent retention rate after three months. That’s pretty spectacular. It’s three to four times higher than the industry norm.” In one of the Healthrageous pilot projects, one out of three users of its devices with high blood pressure showed clinical improvement at 12 weeks, he says.

Lee says Healthrageous also plans to partner with pharmaceutical companies, starting with German’s Boehringer Ingleheim to encourage medication adherence and brand loyalty.

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