Artificial intelligence and software company Commure received $200 million in growth financing from General Catalyst’s customer value fund to fuel its sales and marketing efforts.
Through its CVF, General Catalyst pre-funds a company’s sales and marketing budget, according to a GC blog post. In return, CVF is paid back by a capped share of the cohort of customers acquired, which allows businesses to grow faster while burning less. On the flip side, if the S&M spend does not pan out as expected, GC owns the downside, the VC firm said.
Commure will use the funding to accelerate its full-stack AI platform, which spans revenue cycle management, ambient AI clinical documentation and workflows and practice management solutions.
"The focus is on really aggressively growing our sales and marketing teams and our sales and marketing efforts, and that includes the field sales teams and the implementation teams. CVF is a pretty unique instrument in that it goes directly towards accelerating our go-to-market," Tanay Tandon, CEO of Commure, told Fierce Healthcare in an interview.
The CVF transaction enables Commure to scale investment in growth and go-to-market initiatives without dilution or adding risk to the business, according to the organizations.
Proceeds will accelerate product innovation, implementation and go-to-market strategies, Commure executives said.
"We had a readout this last quarter where the mid-market revenue cycle teams and the ambient teams both blew past their quotas. Usage and adoption was really high, and it's just clear there's a huge market here, while at the same time, we're able to fund R&D engineering with our balance sheet, the equity capital that we've raised. This is a fairly creative way to really press on the gas pedal without dilution, at the same time tying into repeatable revenue that we know is going to show up once we onboard the customer," Tandon said.
The company may raise another round of capital later this year, he noted.
Commure has north of $200 million in contracted annual recurring revenue, according to Tandon. The company says its ARR has doubled for three consecutive years.
"We have a clear view into the levers to allow for profitability if we wanted it, but we are seeing strong demand and are choosing to invest in growing sustainably," Tandon said.
When asked about potential plans to go public, Tandon responded, "We’re in no rush, but the company will likely be IPO-ready within the next two years."
Commure was hatched by GC in 2017 and launched in 2020. In October 2023, the company merged with Athelas, a provider of healthcare workflow automation software, to grab a bigger piece of the health system market. At that time, Commure received a $70 million investment from GC at a reported valuation of $6 billion for the combined entity, Tandon told Fierce Healthcare in an interview at the time the deal was announced.
Nine months later, Commure acquired healthcare AI company Augmedix for $139 million, giving it a foothold in the AI medical scribe market. In December, the company acquired Memora Health, a digital care navigation platform launched out of Harvard Innovation Labs.
The company has been steadily building out its technology stack to service healthcare organizations with AI-powered solutions for clinical documentation, revenue cycle management and practice management operations.
Commure says it now serves more than 130 health systems across the country, representing hundreds of thousands of clinicians.
It's working with HCA Healthcare to co-develop an ambient AI platform to support critical workflows in emergency departments, hospitalist operations and ambulatory care.
The company says its infrastructure platform offers a suite of interconnected AI-powered products to streamline workflows for providers, enhance patient experiences and enable hospitals to increase efficiency and profitability.