Accolade: A Case Study in Making Connections

Helping Patients Make Better Healthcare Decisions

Accolade is addressing multiple pain points in the healthcare market, including:

• Spiraling healthcare costs
• Increasing burdens on the consumer
• Poor consumer decisions leading to wasted spending

By combining advisers, clinical expertise, and smart tech, Accolade engages and influences each member in a personalized way to reach better healthcare decisions. You can think of Accolade as the service and technology powering the phone number on the back of a healthcare card, answering everything from, “Can you explain this medical bill?” to “Should I see my PCP or specialist for this ailment?”

Accolade has become one of the leading independent personalized health and benefits solutions in the healthcare market. They consistently achieve Net Promoter Scores of 70 and higher, 98% consumer satisfaction ratings, and ~15% employer cost savings. Further, they have been named as one of the nation’s 25 most promising companies by Forbes and a fastest-growing private healthcare company by Inc.

Accessing a Deal with Accolade

We participated in a 2018 growth round that was a doubling down to support Accolade’s transition from a services company to a full tech platform. The round was led almost entirely by existing investors, with only a very small subset of new investors allowed in.

AVG was included thanks in large part to the tight connections between our lead sponsor fund, Blue Ivy Ventures (for Yale alumni and friends), and the EVP of Product Management at Accolade, who also is a Blue Ivy Investment Committee member.

Investment Committees (IC) are a significant resource for AVG funds. Our IC members not only help funds evaluate deals, but they identify promising investment opportunities, make connections for portfolio companies, and serve as community ambassadors. In this case, Blue Ivy’s IC helped alert AVG to the Accolade opportunity and connect us with Accolade’s CFO as the deal was coming together.

AVG was able to access a deal with Accolade through this connection established by Blue Ivy. AVG’s 16 core funds frequently leverage alumni networks to access deals and build relationships with entrepreneurs and established VCs, which provides a unique, robust deal pipeline for our investors.

What We Liked About Accolade

1. Standout team. The company is led by the highly successful CEO Raj Singh, a visionary leader and experienced technology operator. With his brother, Singh founded and led Concur Software from its early roots through to IPO and eventual sale to SAP for $8B. A few key leaders from Concur followed him to Accolade, including Chief Product Officer Mike Hilton, EVP of Product Phong Nguyen, and President Rob Cavanaugh.
2. A-list co-investors. a16z led the prior round with a $50M investment, alongside Madrona Ventures, early investor Comcast Ventures, McKesson Ventures, Carrick Capital, and Edgar Bronfman and Michael Cline’s Accretive Capital.
3. Strong traction and performance. Revenue was approaching $100M, in a growing area of healthcare (the self-insured market) that is taking share.
4. Strong and deep Board of Directors. In addition to Bronfman, the Board at the time our investment included Jeff Jordan (CEO of Open Table, and Board member at Instacart, Pinterest, Airbnb); Senator and Dr. Bill Frist; Sheila Burke (Board of Kaiser Family Foundation, Chubb, Ascension Health, former member of the Medicare Payment Advisory Commission); Michael Cline (founder of Accretive and co-founder of Accolade); and Mark Mactus (retired Chairman and President of Towers Watson).

The Road Ahead

Accolade’s debut on the Nasdaq raised $220 million at a valuation of $1.2 billion. Now as a public company, their mission is to empower people through expertise, empathy, and technology to make the best decisions for their health and well-being.

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