IkaSystems Corp., a Southborough, Mass.-based provider enterprise-level, Web-based technologies for the healthcare payer market, has raised an undisclosed amount of funding from Essex Woodlands Health Ventures. This follows a previously-announced investment from Providence Equity Partners. VentureWire reports that the two investments totaled $120 million.
ikaSystems announced today the closing of an investment by Essex Woodlands Health Ventures following on and participating as a minority investor with the recent investment by Providence Equity Partners. Terms of the transaction were not disclosed. ikaSystems, a provider of enterprise-level Web-based technologies for the healthcare payer market, will use the proceeds to fund future growth, including enhancing project management, account management and implementation services as the company continues to rapidly expand its market share. As previously announced with the closing of the investment by Providence Equity Partners, Eran Broshy, former chief executive officer and currently chairman of inVentiv Health, Inc., and a senior advisor at Providence, will serve as chairman of the board at ikaSystems.
Under the successful leadership of founder and chief executive officer Ravi Ika, ikaSystems has experienced significant growth. As health insurance companies seek new approaches to reducing administrative expenses while containing medical expenses, the company’s flagship technology platform, ikaEnterprise, is rapidly replacing legacy systems at these large insurers. ikaEnterprise automates all key processes in the payer business cycle for any health plan line of business: individual, employer-sponsored, Medicare or Medicaid. ikaEnterprise includes a portfolio of software modules that can be purchased independently or as an enterprise wide solution for insurers.
“We have proven that ika software gives our customers a competitive edge at a time when their businesses demand systems that are flexible and can accommodate rapid changes,” said Ika. “This transaction gives us additional funding to capture and adequately support a much greater share of the payer systems marketplace. We partnered with Steve Wiggins of Essex Woodlands three years ago and have enjoyed significant growth since that financing. We are delighted that Essex Woodlands, a leading private investor in health care, is joining Providence, one of the largest and most successful private equity funds, in this transaction.”
Essex Woodlands Health Ventures makes venture capital and growth equity investments in all sectors of the health care industry, with investment teams active in biotechnology, medical technology, specialty pharmaceuticals, health care services and health care information technology. Essex has nearly $2.5 billion in equity commitments. Providence is the leading global private equity firm specializing in equity investments in media, entertainment, communications and information companies around the world, with approximately $22 billion in equity commitments.
“I’m very excited about the prospects for ika,” said Steve Wiggins, a Managing Director at Essex Woodlands and the former Founder and CEO of Oxford Health Plans. “They are exceptionally well positioned to benefit from health insurance reform. I believe they have the best people, the best software and the best strategy for responding to changes in the health care industry.”
Mr. Broshy commented, “Ravi is a tremendous entrepreneur who is helping to advance the healthcare information sector through ikaSystems’ success. We look forward to working with Ravi, the ika team and Essex Woodlands to add value at the Company over the long-term.”
In addition to Ravi Ika, Steve Wiggins and Eran Broshy, the ikaSystems board of directors will include Peter O. Wilde and Jesse Du Bey of Providence Equity Partners.
About ikaSystems Corp.
ikaSystems is healthcare payers’ premier provider of enterprise-level Web-based technologies for commercial, Medicare and Medicaid lines of business. ikaEnterprise, the company’s flagship product, automates all key processes in the payer business cycle — from marketing and sales through claims administration and customer service to care and quality management — all on a single integrated platform. Using our agile, modular technology, organizations can proactively move to lower administrative and medical care expenses and thrive in even the most challenging environments. To learn more, please visit www.ikasystems.com.
About Providence Equity Partners
Providence Equity Partners is the leading global private equity firm specializing in equity investments in media, entertainment, communications and information companies around the world. The principals of Providence manage funds with approximately $22 billion in equity commitments and have invested in more than 100 companies operating in over 20 countries since the firm’s inception in 1989. Significant investments include Archipelago Learning, Bresnan Broadband Holdings, Casema, Com Hem, Digiturk, Education Management Corporation, eircom, Hulu, Idea Cellular, Kabel Deutschland, NexTag, Ono, PanAmSat, ProSiebenSat.1, Recoletos, TDC, Univision, VoiceStream Wireless, Warner Music Group, Western Wireless and Yankees Entertainment & Sports Network. Providence is headquartered in Providence, RI (USA) and has offices in New York, London, Los Angeles, Hong Kong and New Delhi. Visit www.provequity.com for more information.
About Essex Woodlands Health Ventures:
With $2.5 billion under management, Essex Woodlands is one of the largest and oldest venture capital and growth equity firms pursuing investments in pharmaceuticals, biotechnology, medical devices, health care services, and health information technology. Since its founding in 1985, Essex Woodlands has maintained its singular commitment to the healthcare industry and has been involved in the founding, investing, and/or management of over 100 healthcare companies ranging across all sectors, stages and geography. The team is comprised of 25 senior investment professionals with offices in Palo Alto, Houston, New York and London. For more information please see www.ewhv.com.