Founders: Toyin Ajayi (CEO), Bay Gross, Iyah Romm
Funding: $868.8 million (PitchBook)
Valuation: $6.3 billion (PitchBook)
Key technologies: Cloud computing, machine learning
Industry: Health care
Previous appearances on Disruptor 50 List: 1 (No. 28 in 2021)
For many start-ups, a business plan begins with a focus on the higher-end consumer, and only once successful, the ability to scale and expand down market profitably. For Cityblock Health, the initial business model is built on a different concept: tackling a major problem for lower-income consumers head-on.
Spun out of Google's urban innovation group Sidewalk Labs in 2017, Cityblock Health was created to help low-income and elderly Americans access health-care, primarily those who qualify for Medicaid.
Co-founder Iyah Romm, at one time a Sidewalk Labs "entrepreneur-in-residence," told CNBC back in 2018 that the company was created specifically because so few health technology start-ups focused on low-income patients, while the "worried well," as he referred to better-off consumers, were targeted with all sorts of services to optimize health.
In 2018, the start-up raised $20 million from investors including Maverick Ventures, Thrive Capital and Sidewalk Labs. Funding has accelerated since.
A $160 million round in December 2020, which valued the firm over $1 billion, led one of Romm's co-founders, Dr. Toyin Ajayi, the company's current CEO, to stress the need for "better healthcare outcomes for all, not just for the few."
Having a female leader highlights another disparity in health: 80% of health-care decisions are made by women but they hold less than 10% of leadership roles in the industry.
The 2020 raise was followed by a $192 million round in March 2021, bringing its total funding from investors including Tiger Global, General Catalyst, Wellington Management, and Goldman Sachs Asset Management, among others, to roughly $868 million, according to PitchBook.
The company has attracted some big names in health, including Andy Slavitt, the former head of the federal government's Centers for Medicare & Medicaid Services, who is on its board of directors. "We need a Cityblock in every community that we have ignored for too long and where the odds stack against people to live a healthy life," Slavitt said in a 2020 funding announcement.
Early investor Ambar Bhattacharyya of Maverick Ventures recently told CNBC that the pandemic has reinforced the importance of Cityblock's business model.
"Cityblock has been fortunate to work with many of the most vulnerable members of our population during this immense moment of need. ... it is poised to redesign the health-care system for the underserved in this country," he said.
It has a partnership with EmblemHealth, a major provider of Medicare and Medicaid coverage, strong relationships with community organizations, and in-home care for physical, mental and social service needs. Technology is also core to its investments and services, led by its care delivery platform Commons and virtual-first service via mobile app, SMS, and video.
Cityblock Health has over 70,000 members located in New York, Connecticut, Massachusetts, and Washington, D.C., and has expanded into North Carolina and Ohio. Its goal is to serve 10 million people in 10 years.
The idea of value-based healthcare has become a core component of many emerging healthtech business models, with companies and providers paid based on results. Cityblock says providing preventative care for at-risk populations receiving government health insurance has already generated results. At the time of its 2021 funding, Cityblock cited a 15% reduction in emergency room visits and a 20% reduction in in-patient hospital stays among its first generation of members. And it reported 3x year-over-year revenue growth.
Providing better health outcomes for poorly served communities can benefit the biggest health-care consumer of all: the federal government. National health spending is over $4 trillion annually, as of 2020, and accounted for roughly one-fifth of GDP, according to CMS. Medicare and Medicaid were the biggest components of that, at a combined 36%.
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