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Revenue Cycle Solutions Receives $12.4 Million from Austin Ventures and Other Strategic Investors
WESTCHESTER, IL - July 27th, 2005 - Revenue Cycle Solutions (RCS), a leading provider of outsourced accounts receivable management services to hospitals, today announced a private equity infusion of $12.4 million and a new $4.0 million credit facility. The capital will allow RCS to expand its technology platform and operational capabilities. Austin Ventures, a growth equity firm with $3 billion under management, led the investment together with InvestRx, a specialized private equity firm investing exclusively in companies that provide revenue cycle services to hospitals. Silicon Valley Bank provided the senior debt financing.
"We're very excited to partner with Austin Ventures and InvestRx as we continue to deliver industry-leading solutions to maximize hospital cash collections," said Nick DiGiovanni, Co-Founder and Managing Partner of RCS. "We're committed to quality and improvement, and with this new capital, we'll be able to further extend the competitive advantage of our technology platform and operations, resulting in greater efficiencies and even higher collection rates for our hospital customers."
"Managing small-balance receivables is a problem for overworked hospital back offices because it generally takes just as much effort to clear up a $50, $500 or $5,000 account. Hospitals need an outsourced service provider who can cost effectively collect small-balance accounts, which have proliferated in the last several years as the healthcare industry has shifted towards more outpatient services and consumer-directed health plans," said Kevin Lalande, the Principal at Austin Ventures responsible for the firm's investment activities in Healthcare IT and Services. "RCS was founded by industry veterans for this very purpose, and they've developed proprietary technology and workflow best practices that give them a clear operating advantage over other players in the industry."
"Data from head-to-head competitions show that RCS collects 33% more cash than their competitors, which increases the hospital's bottom line by 1/2 to 1% of the hospital's annual revenue," added Lalande. "We are impressed by the accomplishments of this team since inception three years ago, and by how quickly hospitals are adopting RCS as their solution for small-balance receivables."
About Revenue Cycle Solutions
Revenue Cycle Solutions (RCS) has developed proprietary technology for efficiently collecting small-balance hospital receivables. Built from the ground up, with an exclusive focus on small-balance insurance claims, RCS "finds" and collects millions of dollars of additional cash for its hospitals customers. Once all insurance balances have been collected, RCS provides the most configurable and patient-friendly, self-pay collection process in the industry. The result is higher collections and patient satisfaction providing RCS with an unmatched hospital customer reference list and wide recognition as the fastest growing firm in the hospital receivable management industry. RCS is based in Chicago, IL. For more information, visit www.revcs.com.
About Austin Ventures
With $3 billion under management across nine funds, Austin Ventures has provided startup and growth capital to emerging companies for over twenty years. We partner with exceptionally talented entrepreneurs and operating executives to build valuable businesses in a variety of technology and service industries. We invest nationally but maintain a particular focus on Texas and the Southwest, where we are the region's most active investor. Our team of investment professionals works with companies at every stage of the funding lifecycle, from initial seed investments, through startup and growth capital, to management-led buyouts and recapitalizations. Austin Ventures brings a long-term investment perspective, broad experience in building high-growth companies, and access to an unparalleled network of entrepreneurs and executives. For more information, visit www.austinventures.com.
About InvestRx
InvestRx, a unique investment fund focused solely on hospital-services companies, was formed in 2003 by a group of experienced healthcare technology executives. The fund was formed around the hypothesis that HIPAA will make hospital services firms increasingly dependent on IT capability to achieve optimal operating performance. Working with several professors within Harvard Business School's Technology and Operations Management department, InvestRx developed a focused strategy for investing in only the most capable IT-driven service providers in the management of the hospital revenue cycle. For more information, visit www.investrx.com.
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