April 29, 2014 / 11:35 AM / 6 years ago

Doximity, the LinkedIn for doctors, raises $54 million from T Rowe Price, DFJ

SAN FRANCISCO (Reuters) - Doximity, an online professional network for physicians, has raised $54 million in new funding from investors including T. Rowe Price and Draper Fisher Jurvetson, making it one of the most well-financed private companies in health IT.

The service, one of a growing crop of startups trying to establish social networks for industry professionals, helps health providers migrate away from paper-based systems and recruit doctors.

Doximity, which describes itself as the “LinkedIn for doctors,” is best known for software that licensed physicians use to create profiles and send secure messages to each other. It claims 250,000 doctors in the United States - about one in three - have registered for this service.

Doximity makes the bulk of its money by charging urgent-care centers, independent practice groups, and hospital networks a fixed fee of $12,000 a month to recruit doctors. Similar to LinkedIn, recruiters can send a fixed number of direct messages each month to potential candidates but must also include information about the job’s location and salary.

On average, chief executive officer Jeff Tangney said the company pulls in $1 million in monthly revenues.

“Doctors are in deep demand and the current recruiting methods are insufficient,” said Tangney.

Industry-focused social networks have attracted interest from investors in recent years, and are attempting to seize market share from LinkedIn, now the leading online recruitment service.

While Doximity goes after physicians, startups such as HireTrade and Avvo are building online marketplaces for lawyers, while IdeaPlane is developing social networks for highly-regulated financial institutions.

LinkedIn co-founder Konstantin Guericke currently serves on Doximity’s board of directors.

“It’s rare to see lightning strike twice,” he said in a statement, adding that these businesses can bring value to professionals and “can be great businesses, too.”

San Francisco-based Doximity has raised $81 million in funding to date. In January, the 55-person company said it experienced its first cash-flow positive month.

Venture firm Draper Fisher Jurvetson and asset manager T. Rowe Price led the series C round. Morgan Stanley Investment Management also participated, alongside existing investors Emergence Capital Partners, Morgenthaler Ventures and Interwest Partners.

Reporting By Christina Farr; Editing by Ken Wills

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