Madison-based health care software company Wellbe Inc. is working to raise $5 million from investors, according to a new SEC filing.
The equity and debt round was launched Feb. 1, and so far includes 32 investors who have committed $4.6 million, according to the filing. James Dias, founder and chief executive officer of Wellbe, said the funding round is expected to close March 15. The lead investor in this round is WISC Partners.
The new capital will be used "to drive growth and innovation in the company. Those are things that we would push for, really just scale our business up," Dias said.
Wellbe indicated “a portion of the total offering amount and the total amount sold is comprised of principal and interest from company-issued notes for which a separate Form D was not filed that were converted into the company’s equity securities.”
Founded in 2009, Wellbe’s cloud-based platform provides integrated care delivery for hospitals and health care systems, with team coordination tools, case prioritization logic and alerts for immediate action. On the patient side, Wellbe has a user-friendly app that details action items they should take and provides health reminders. Wellbe was ranked at No. 322 in the 2016 Inc. 5000, with three-year growth of 1,201 percent and 2015 revenue of $2.2 million. At that time, it had 23 employees.
But now, Wellbe has shrunk to 14 employees. Dias said the health care industry's shift from pay-for-service to pay-for-performance, the space Wellbe's platform targets, has been slower than expected.
"We had anticipated as early as 2015 that payment reform would be a catalyst for creating demand for digital health technology to assist with patient programs," he said. "When you're in a pay-for-performance model and so much depends on the patient experience…these kind of connected technologies like the ones we have become much more important.
"That sort of demand has not materialized because of changes in the administration, changes in the rules.”
Dias declined to disclose Wellbe's current revenue.
"We haven't seen the growth that we've been looking for. We are making some changes, introducing some new products, moving a little bit more to the revenue side of the equation," he said.
According to SEC filings, Wellbe has previously raised about $5 million in equity and debt from investors.