Montreal-based healthcare software provider Alaya Care Inc. is bolstering its expansion into the United States with a $225 million funding round led by Al Gore’s investment firm.
The financing marks Generation Investment Management’s second investment in Canadian tech after funding Calgary-based Benevity Inc. in February. The former U.S. vice-president is Generation’s founding partner and chairperson.
The round also includes Klass Capital and existing investors Inovia Capital, Caisse de dépôt et placement du Québec and the Quebec government’s investment arm, Investissement Québec.
AlayaCare, the name of the company’s platform, helps more than 500 home and community care agencies manage the scheduling and dispatching of healthcare workers to patients’ homes, and processes invoices and payroll, among other administrative tasks. The software also uses artificial intelligence to assess patient needs and help workers plan their visits.
“We fundamentally believe that treating people in the home is key to building a sustainable health system that provides better outcomes at lower cost,” Generation partner Dave Easton said in a statement.
Alaya Care intends to use the funding to expand further into global markets. The health tech start-up is considering expanding into the United Kingdom, the Middle East and Asia, but is predominantly eyeing acquisitions the U.S. market in the short-term, where its business has grown sevenfold in two years.
Canada, Australia and the U.S. each account for one-third of Alaya Care’s revenue, but 70 per cent of all new revenue comes from south of the border where the company faces a fragmented market with competitors including WellSky, Homecare, Homebase and Netsmart.
The seven-year-old company raised US$37 million last January and acquired Victoria-based Procura, a software provider for long-term and post-acute care organizations, as well as New York-based software company Arrow Solutions.
“We’re really seeing the opportunity to accelerate our growth,” said chief executive officer Adrian Schauer. “This financing is really about expanding the business, and the U.S. market is the biggest opportunity for us.”
It also plans to grow its 470-person team, hiring more than 300 more staff over the next two to three years.
While the company has weathered pandemic and continued to grow, COVID-19 continues to weigh on the healthcare sector. Last spring, Alaya Care slashed its growth forecasts for two quarters as patients and caregivers avoided making house calls due to pandemic restrictions. That pressure eased at the end of 2020 as caregivers and patients adapted to new safety guidelines and secured protective equipment, and demand for Alaya Care’s digital services climbed again.
But labour shortages are where the “next battle will be fought,” according to Schauer. Alaya Care retained its staff throughout the pandemic, but as it grows it will need to ramp up its hiring.
“The labour market is so competitive, there’s such a shortage of labour in our sector on the software development side and the product management side,” Schauer said.
View source version on Financialpost.com: https://financialpost.com/fp-finance/al-gores-investment-firm-leads-225-million-investing-round-in-montreals-alayacare