Milwaukee-based Sift Medical Data Inc. is working to raise a new funding round of up to $1.1 million.
The company has just more than $800,000 committed from fewer than 10 investors in the funding round so far, said Justin Nicols, founder and chief executive officer of Sift MD.
This latest funding round comes on the heels of a $655,000 seed funding round Sift closed in November, led by Winnebago Seed Fund. It was the first investment for Neenah-based Winnebago since it closed its $11 million startup fund as part of the Badger Fund of Funds program.
The startup decided to go back to investors so soon because it has been scaling its team as it sees more customer demand in the market. It plans to use the additional funding to expand its sales and marketing efforts and hire additional data scientists in Milwaukee, Nicols said.
Winnebago is again the lead investor in Sift’s $1.1 million round, Nicols said, and other seed-round investors also made follow-on investments. The raise is expected to close Sept. 15.
Sift, established in 2013 and previously known as Small Biz Collections LLC and Remindabill Inc., helps normalize insurance claims and insurance payment data to help medical providers draw analytics from the information. For example, a provider could predict a patient’s propensity to pay, and the optimal bill amount to put in front of a patient based on their ability to pay, Nicols said.
The startup has found traction in the market as the patient responsibility for health care costs has grown to be a larger portion of providers’ revenue, now at about 30 percent, he said. Sift’s customers are health care providers and the billing companies to which they outsource collections.
“Analytics and revenue cycle management is an interesting spot. It’s highly expensive and becoming more costly to process claims and process medical bills,” Nicols said. “Across the board obviously with rising costs associated with medical, people are looking for more efficient ways to cut those costs.”
The company now has six employees. Nicols said a big win for Sift was hiring as its senior vice president of analytics Ken Cunningham, former vice president of insurance claims analytics at LexisNexis.
Currently located in a 1,200-square-foot space at 735 N. Water St. in downtown Milwaukee, Sift is evaluating moving to a larger office space as it grows, he said.
Nicols was previously vice president of business development at Milwaukee startup Okanjo, senior director of business development at Okanjo affiliate Drescher Holdings Inc., founded social academic network Study With Me, and worked in investment banking.