Connecture, the leading provider of Web-based information systems used to create health insurance marketplaces and exchanges, today announced that Great Point Partners, LLC, a Greenwich, Conn.-based private investment firm focused on the healthcare industry, has led a $20 million funding round in growth recapitalization of Connecture. Existing investor Chrysalis Ventures also co-invested in this financing.
The investment will enable Connecture to meet the demand from states for the creation of health insurance exchanges mandated by the Patient Protection and Affordable Care Act (PPACA). In addition, the investment will support Connecture's ongoing investment in software innovation that benefits the health plan, broker and insurance exchange markets.
In addition to projected growth in excess of 50 percent for 2012, this investment adds additional business momentum to Connecture, which recently announced its role in the development of health insurance exchanges in Maryland and Minnesota, an effort to hire more than 100 Java developers and its move to a larger facility in Brookfield, Wisconsin.
Since its founding in 1997, Connecture has established itself as the leading developer of software designed to streamline and simplify the health insurance distribution process. More than half of the nation's 20 largest health insurance plans use Connecture's technologies, and more than 25 million Americans shop for their health insurance on systems built by Connecture.
"The Great Point team has the health care technology and payer sector domain expertise to complement and support our strategic vision as a company, which is to eliminate friction in the health insurance purchasing process," said Doug Schneider, Connecture CEO. "This investment will enable Connecture to accelerate building out our capacity, and it will help states, brokers and health plans meet the deadlines associated with health care reform with the best information systems in the market."
The recapitalization adds to Connecture's board Great Point team members David Kroin, managing director; Adam Dolder, managing director; Charles Myers, senior vice president; and Brett Carlson, vice president, as well as Chrysalis venture partner Alan Ying. Schneider and board chair David A. Jones, Jr., who is Chrysalis' chairman and managing director, continue to serve as directors.
"Connecture has developed tools for the modern day health plan," said Carlson. "With the depth of their product offering and leadership position in the sales automation market, Connecture's technology effectively connects consumers, health plans, employers and brokers to the new health insurance marketplaces being developed by the states and in the private sector."
Jones added, "Connecture has been the market leader in health insurance sales automation for almost a decade. Connecture's recent growth in terms of customer base, market penetration and product innovation has been outstanding, and the market opportunity has never been better. We welcome Great Point as an investment partner and on the board as Connecture continues to evolve during this historic period in healthcare."
About Great Point Partners
Great Point Partners, based in Greenwich, Conn., is a leading healthcare investment firm with approximately $450 million of equity capital under management. The firm manages capital in public (the Biomedical Value Fund) and private equity funds (GPP I – a $156 million private equity fund). Great Point Partners has provided growth equity, growth recapitalization, and management buyout financing to more than 100 healthcare companies. The private equity fund invests in profitable companies across all sectors of the healthcare industry including behavioral health, biologics manufacturing, healthcare services, hospital outsourcing, information technology, life sciences, media and reagents, medical devices, rehabilitation, specialty pharmaceuticals and workers compensation. The firm pursues a proactive and proprietary approach to sourcing investments. Reach Great Point at 203.971.3300 or www.gppfunds.com.
About Chrysalis Ventures
Chrysalis Ventures manages one of Mid-America's largest funds for early-stage and growth investments with approximately $400 million under management. Since 1993, the firm has invested in over 65 companies, primarily in the healthcare and technology sectors. With headquarters in Louisville, Kentucky, Chrysalis has offices in Cleveland, Pittsburgh, Ann Arbor and Houston. The firm seeks to partner with entrepreneurs to build enduring businesses in industries undergoing significant transformation. For more information, please visit www.chrysalisventures.com.
Connecture is the leading provider of Web-based information systems used to create health insurance marketplaces and exchanges. Its industry-proven solutions enable consumers, employers and brokers to more easily shop for, purchase and renew health insurance while minimizing back-office administrative expenses for health plans. Connecture's solutions are provided to health plans, state insurance exchanges, private exchanges and insurance brokers. More than 25 million Americans shop for their health insurance through systems built by Connecture, and more than half of the nation's 20 largest plans rely on them to sell, administer and manage their plans and products effectively. For more information, visit www.connecture.com.