Bain Capital Ventures and Spectrum Equity have taken minority stakes in healthcare software provider MedHOK for $77.5 million.
The two firms, which have a track record of investing in healthcare companies, are betting on growing demand for cloud computing services as the healthcare industry shifts to a model that links reimbursement to performance rather than the number of transactions.
"Along with care and quality, we believe that compliance and risk mitigation will continue to be top priorities for health plans and that MedHOK`s platform is very well-positioned to address these needs," said Jim Quagliaroli, managing director at Spectrum Equity.
Tampa, Florida-based MedHOK, or Medical House of Knowledge, offers software-as-a-service for health plans, hospitals and accountable-care organizations such as Kaiser.
MedHOK was founded in 2010 by Anil Kottoor, who previously worked as chief information officer at WellCare Health Plans Inc (WCG.N) and chief application development officer at WellPoint Inc WLP.N. Its services are used by more than 22 million health plan members, the company said.
The company, which is profitable and has more than 100 employees, is seen as a future candidate for a public listing or a sale, people familiar with the matter said, asking not to be identified because the matter is not public.
Cloud computing, such as the software-as-a-service MedHOK offers, can be accessed on demand, allowing clients to reduce costs by trading local servers for network-based software and storage in remote data centers.
Bain Capital Ventures, the venture and growth capital arm of Bain Capital, and investment firm Spectrum Equity have made a number of investments in healthcare IT.
Bain Capital Ventures' investments in healthcare have included private benefit exchange Liazon, digital health company Humedica, dialysis company Liberty Dialysis and walk-in medical service Minute Clinic - all of which Bain Capital Ventures eventually sold.
Spectrum Equity's investments include HealthMEDX, a provider of long-term and post-acute care technology and Net Health, a software provider for outpatient specialty care.
Spectrum Equity also invested in Passport Health Communications, which it sold to Experian (EXPN.L) in November 2013, and in QTC Management Inc, which it sold to Lockheed Martin (LMT.N) in September 2011.
(Reporting by Nicola Leske; Editing by Steve Orlofsky and Jonathan Oatis)