Montréal-based Clinia has entered into a strategic partnership with Telus’ health technology services division and closed a $10-million CAD Series A round led by the Canadian telecommunications giant’s venture capital (VC) arm.
For Clinia, which has spent the past few years ensuring its artificial intelligence (AI)-powered health-search infrastructure is “enterprise-grade,” the deal gives the healthtech startup fresh capital from Telus Ventures, a new customer in Telus Health, and a strong distribution network.
In an interview with BetaKit, Clinia co-founder and CEO Simon Bédard said that Telus’ approval grants the company’s tech the endorsement it needs to gain the trust of other large healthcare organizations in the United States (US)—and a better avenue for selling to them.
Telus Health’s Martin Bélanger called the deal a “win-win.”
“This is our visa to say, ‘Hey world, the largest player in telehealth in Canada has our technology, it’s stamped, it’s approved,’” said Bédard. “There are much, much, much bigger fish in the US, and that’s [who] we want to target now.”
Telus Health plans to deploy Clinia’s tech to help improve navigation and provide better recommendations to healthcare providers and payors using its products, beginning with its provider registry. With the help of Clinia, Telus Health aims to improve the interconnectivity and personalization of its existing offerings and create new ones.
Martin Bélanger, managing director of payor and provider solutions at Telus Health, called the joint partnership-investment deal a “win-win” for both parties. “From a growth perspective, for Clinia, on top of capital, it’s really an infinite opportunity here,” he told BetaKit in an interview.
Clinia’s all-equity, all-primary $10-million Series A financing closed in mid-December. New investor Telus Ventures provided $7.8 million, with the remainder coming from existing Clinia investors, which all reinvested. This group includes AQC Capital, Anges Québec, Groupe Benoit, Kastello, and Formentera Capital. In addition to this $10 million, Bédard said that a small, undisclosed amount of secondary went to existing Clinia shareholders.
Bédard declined to disclose Clinia’s latest valuation but claimed it doubled relative to the company’s $5-million seed round from early 2022. This Series A funding brings Clinia’s total equity financing to $15 million. The startup has also secured $4.4 million in grants to date.
Telus Ventures managing partner Terry Doyle told BetaKit in an interview that Clinia “has been building a great business.” He credited the startup for building a product capable of both meeting Telus Health’s requirements and growing beyond them, noting that Telus is a “fairly demanding customer.”
RELATED: Clinia closes $5 million to scale B2B health search infrastructure
“For us, it was a clear match, and clear that they had built a robust technology that could deliver the types of results that we need,” said Doyle.
Clinia was founded in 2016 as a direct-to-consumer play, aiming to become the “Expedia of healthcare for Canada” before it stumbled onto the problem of how to manage a health resource registry at scale and pivoted into its current business-to-business approach.
Since then, Clinia has built its health-focused, AI-powered, API-first search infrastructure for enterprise healthcare organizations from the ground up. Today, instead of competing directly against other digital health companies, Clinia sells its tech to these firms, enabling them to build their own “Google of healthcare” within their products.
Telus Health sells a variety of different tech solutions to a wide range of public and private players. Bélanger noted that Telus Health’s 2022 acquisition of LifeWorks helped scale its business on a global basis. Today, Telus Health serves about 70 million people across 160 countries, has over 7,000 employees, and generates more than $1.5 billion in annual revenue.
Telus Health also owns Canada’s biggest provider registry, which Bélanger said is powered by legacy tech. Clinia initially reached out to the Telus Health team about three years ago to pitch itself as a modern replacement. At the time, Telus was still trying to figure out whether they wanted to build and own this tech internally or partner with a third-party provider.
RELATED: Telus acquires TSX-listed HR tech firm LifeWorks for $2.3 billion
“Sometimes we build stuff ourselves and we deploy it into the marketplace, but sometimes we want to go faster,” said Bélanger.
According to Bédard, it took Clinia a few years to prove to Telus Health that they were the right folks for this job and that Clinia’s tech had a much wider array of potential use cases. Once that determination was reached, Bélanger said Telus Health brought in Telus Ventures to help mitigate the risk of doing business with a smaller startup.
“Now, with the Telus logo and stamp, we’re really at the stage where we can be trusted by similar-size types of [international] enterprise clients,” he argued.
According to Bélanger, Clinia’s solution offers modern infrastructure, great taxonomy, and strong interoperability. “It’s a super health navigation engine,” he said.
While Clinia already has big-name clients, including Dialogue and Teladoc, Bédard said that the Telus Health partnership elevates the startup to another level. “We’re now in a much bigger league in terms of volumes and in terms of use cases.”
RELATED: Telus Health continues Canadian healthtech acquisition spree with Sprout
Moreover, Telus Health has large customers of its own in both Canada and abroad. For Clinia, which primarily serves Canadian clients, US expansion is a core focus for the startup going forward. Bédard noted that Telus Health’s global presence “opens up international doors” for Clinia’s tech.
Telus Ventures invests in a wide variety of areas, including digital health, with a focus on finding startups that help drive Telus’ product roadmaps. It tends to back Series A and Series B-stage firms that Telus can help scale. Telus Ventures’ other healthtech investments include League, MedStack, and PocketPills.
For its part, Telus Health has previously acquired other Canadian healthtech companies, including Nightingale, EQ Care, Akira Health, and ZRx Prescriber. In the past, Telus Ventures invested in Sprout before Telus Health eventually purchased the firm outright.
“There are much, much, much bigger fish in the US, and that’s [who] we want to target now.”
– Simon Bédard, Clinia
Telus Ventures has only acquired a minority stake in Clinia, and Bédard emphasized Clinia remains independent, noting that he has no intentions to sell the company anytime soon.
According to Bédard, Clinia has hired and invested strategically to date, an approach that has helped Clinia and its now 30-person team navigate COVID-19 and today’s challenging economic conditions.
Bédard claimed that as a stickier healthtech infrastructure play, Clinia has not been hit as hard as other tech startups from a revenue and market development standpoint, and unlike many of its peers, Clinia has not made any layoffs during the current downturn.
As Clinia focuses on big customers in an industry with long sales cycles, Bédard said that the startup has taken a “patient” approach to date, noting that bringing in Telus as an investor affords it more flexibility on this front.
As Telus’ corporate VC arm, Telus Ventures is not beholden to the same pressures and timelines of traditional VCs. Telus Ventures has ramped up its VC investing amid the downturn. As the rest of the market recalibrates, Doyle said Telus Ventures has not been restricted because it invests “off-balance sheet,” adding that last year was one of its most active to date.
“We don’t have the same fund dynamics that [other] institutional investors have to deal with,” said Doyle. “I don’t have a requirement to return capital over any period of time, so we can be patient capital.”
Feature image courtesy Clinia.
