Redox, which is geared towards software developers and hospital systems, aims to do for healthcare what Plaid did for the financial services industry.
Everyone knows you can’t fit a square peg into a round hole, but imagine that’s what your plumbing connections actually looked like. That’s day-to-day life in the world of healthcare data exchange—pipes of all different shapes and sizes with no good way to connect them. Redox, a Madison, Wisconsin-based startup, has invented a technological soldering iron to tighten these connections, enabling healthcare information to flow in the cloud.
“We think about ourselves as an infrastructure company,” says Redox cofounder and CEO Luke Bonney. “How do we accelerate the adoption of technology in healthcare? Integration is a massive problem.”
Bonney, 35, and his cofounders Niko Skievaski, 34, and James Lloyd, 36, aim to do for healthcare what Plaid did for the financial services industry: get different software systems to talk to each other. Plaid connects an individual’s bank account to financial applications like Venmo. Redox enables hospitals (and ultimately patients) to connect with software developers building the latest healthcare applications.
“The major inspiration for Redox was thinking about a developer-first platform, where we’d be powering a two-sided network,” says Bonney. “One side was going to be the innovators and developers, the people building technology. And on the other side was going to be all the providers and patients, the people who need to use that technology.”
It’s an attractive solution to a seemingly intractable interoperability problem. Redox raised $45 million in a Series D round announced Wednesday led by Adams Street Partners. Avenir participated along with returning investors Battery Ventures, .406 Ventures, and RRE Ventures, bringing Redox’s total funding to $95 million to date.
To explain Redox’s attraction to investors, Thomas Bremner, a partner at Adams Street, offers a hypothetical example of ten software companies that need to connect to ten health systems. In the traditional point-to-point connection system, this would require a total of 100 connecting pipes. With Redox as the intermediary, a software vendor and healthcare system only need to make one connection each for a total of 20 pipes. “You take 80% of the inefficiency out of the market in that scenario,” says Bremner. “Expand it to the broader market. There’s thousands of software vendors and thousands of health systems, so you’re saving a ton of effort and energy when you have that kind of central hub.”
Plus, Redox doesn’t just build a pipe and then forget about it. It maintains the connection over time taking into account different software versions and upgrades, and also acts as a translator. There are commonly used standards for exchanging electronic health information, including HL7 and FHIR. “Within those languages, there are dialects,” says CTO Lloyd. “Even though a health system is using HL7, and you go to another health system using HL7, it doesn’t mean they actually can make sense of what each other is saying.”
Redox currently has 350 digital health company customers connected to more than 1,400 healthcare delivery organizations. While its focus so far has been on serving the provider market, investors are eyeing the health insurance market, especially as new federal interoperability rules come into effect regarding patient data. “I think what’s next for the team is to get into the payer market, which is another huge opportunity,” says Bremner. “One that they’re just kind of scratching the surface of now.”
It’s not just about getting new customers, a huge part of our growth is the expansion of existing customers.
The Redox cofounders got a taste of the coming digital health revolution while working at Verona, Wisconsin-based Epic Systems in the late aughts. That’s when they saw the hundreds of different interfaces electronic health records needed to connect to within a health system. “There was this big disconnect between the world of electronic health records and the world of new cloud-based software,” says Skievaski, the president of Redox.
The trio met not through their day jobs but through an “intrapreneurship” program inside Epic that fostered collaboration on innovative projects. Skievaski was the first to leave in 2013 and began working on a startup. He and Lloyd soon founded a co-working space in downtown Madison called 100state, which later launched an incubator called 100 Health. “Epic is the largest employer in that whole county with 10,000 plus employees, and there wasn’t an ecosystem of people starting health tech companies around Madison,” says Skievaski. “It just seemed like there should be.” Bonney came onboard in February 2014 and by the end of that year, Redox was born.
Bonney is the only one of the three cofounders who still lives in Wisconsin. The company had a remote work policy from the very start and has grown to 130 employees. While Redox saw an initial slow down of integrations at the start of the Covid-19 pandemic, there was soon a huge demand for telehealth companies that wanted to connect to health systems, ranging from tiny startups to publicly-traded firms. Redox customers pay a license fee and then a connection fee based on the total number of hospitals, which gives software developers “a predictable pricing model,” says Bonney, as opposed to the per transaction fee charged by similar companies.
Japan-based Omron, which makes home blood pressure monitoring devices, started working with Redox on clinical integrations a year and a half ago as part of a pilot for its remote patient monitoring program, which officially launched in January. “What Redox allows us to do is bolt on to exactly how [the provider] is already operating,” says John Lustig, Omron’s director of remote patient monitoring and clinical programs.
Redox is electronic health record agnostic, meaning it helps Omron connect its remote patient monitoring software VitalSight to more than 50 different records systems. “Redox enables us to flag out of range readings and send them back in triggering an alert notification,” says Lustig. The doctor doesn’t have to use another interface or app. Everything is centralized in the electronic health record they are already used to using.
“The interesting thing about us is it’s not just about getting new customers, a huge part of our growth is the expansion of existing customers,” says Bonney. The members of Redox’s network currently integrate more than 12 million patient records daily. “We grow as our customers grow, and the total number of connections that we help them enable.”
Correction: The original article incorrectly referred to the startup incubator in Madison. It is called 100state.