Healthcare technology firm Commure is set to merge with Athelas, a provider of healthcare workflow automation software, in a strategic move aimed at expanding their presence in the health system market.
The merger is expected to be finalized by the end of October.
Under the terms of the agreement, the combined entity will retain the Commure name, with Athelas co-founder and CEO, Tanay Tandon, leading the organization. Current Commure CEO, Ashwini Zenooz, M.D., will transition into a nonexecutive director role on Commure’s board while serving as a senior advisor. Hemant Taneja, CEO and Managing Director at General Catalyst and Commure co-founder, will continue in his role as Executive Chair of Commure.
While the financial details of the merger remain undisclosed, Commure is bolstering its growth strategy with a $70 million investment from General Catalyst, resulting in a reported valuation of $6 billion for the merged company.
According to Tandon, this merger positions the new entity as one of the largest and fastest-growing digital healthcare companies. It aims to become a central player in the healthcare technology space.
The merger brings together Athelas’ expertise in large language models (LLMs) with Commure’s extensive software and hardware solutions. Together, they plan to accelerate the integration of language models and workflow automation technology into larger healthcare systems.
With approximately 800 employees—comprising 300 from Commure and 500 from Athelas—the new organization plans to aggressively expand its workforce as part of its scaling efforts.
Language models are considered transformative technology with the potential to drive innovation in healthcare and streamline tasks for the industry’s workforce.
Commure, founded in 2017 by General Catalyst, has focused on establishing a common healthcare infrastructure, offering solutions like the Strongline workforce badging system for staff safety and AI-enabled workflow and revenue integrity solutions. In 2021, Commure acquired physician workflow software maker PatientKeeper from HCA Healthcare, significantly expanding its reach.
In contrast, Athelas, launched in 2016, has concentrated on software and sensor products to enhance healthcare workflows, particularly in small and medium-sized healthcare practices. Their focus lies at the intersection of hardware and software, with a particular emphasis on LLM-powered tools that improve efficiency in health systems.
The merger positions Commure with a $110 million “run rate,” and the company is on track to achieve a $150 million “run rate” by the end of the year.
Both companies had been on a trajectory toward independent IPOs within the next two years. However, with the merger, they aim to drive long-term value for hospitals and healthcare systems, delivering scalable solutions powered by automation.
Commure expressed its intention to pursue strategic, organic, and inorganic growth opportunities as it works towards an eventual IPO, anticipated to occur within the next two to three years.
This merger is seen as a critical turning point for Commure and the healthcare industry, poised to accelerate the introduction of healthcare innovations to providers and patients in the United States. The combined entity enjoys backing from investors such as General Catalyst, Sequoia, Lux, Human Capital, 8VC, Greenoaks Capital, and Elad Gil.
Cooley LLP acted as legal advisor to Commure, while Belcher, Smolen & Van Loo LLP represented Athelas in the transaction.
