Thoughts on Practice Fusion Raising $70 Million

Today, Practice Fusion announced that they have just closed a $70 million round of funding. This series D round of funding brings Practice Fusion’s total funding to $134 million and a valuation estimated at $700 million. The round was led by Kleiner Perkins Caufield & Byers, OrbiMed Advisors, and Deerfield Management Company.

We’d heard that this round was close almost 2 months ago. I’m not sure what took them so long to finally close the round. I also found it interesting in this Forbes article about the funding round that “Practice Fusion leads vendors this year in acquiring Allscripts’ former customers.” I have a feeling Aprima might have something to say about that.

In that same article, Practice Fusion declined to disclose revenues, but Ryan Howard suggested that he expects Practice Fusion revenues to triple next year. Then, it was suggested in the article that payments from labs connected to Practice Fusion customers would make up a significant source of revenue. You might remember that Practice Fusion lost one revenue stream when Kareo decided to launch their own free EHR. Practice Fusion has since rolled out 3 new billing companies and so they could have made up that revenue.

The article also suggests that revenue is available from Pharma for mining the Practice Fusion data for insights. Then, they’ve always talked about the potential for pharma advertising in the Free EHR. I also had someone suggest to me recently that Practice Fusion could be making money off of selling leads to the various healthcare education companies out there. Considering the number of emails I get from these healthcare education companies, they definitely have money to spend on targeted leads.

The question I’ve asked for many years isn’t whether Practice Fusion has created value. No doubt their current user base and data set has value. The question that remains is whether they’ve created a company that merits a $700 million valuation and whether the $134 million investment will yield a quality return. Plus, can Practice Fusion build the company’s revenue while still maintaining physicians’ trust in Practice Fusion. They now have $70 million in funding to find out.

About the author

John Lynn

John Lynn

John Lynn is the Founder of, a network of leading Healthcare IT resources. The flagship blog, Healthcare IT Today, contains over 13,000 articles with over half of the articles written by John. These EMR and Healthcare IT related articles have been viewed over 20 million times.

John manages Healthcare IT Central, the leading career Health IT job board. He also organizes the first of its kind conference and community focused on healthcare marketing, Healthcare and IT Marketing Conference, and a healthcare IT conference,, focused on practical healthcare IT innovation. John is an advisor to multiple healthcare IT companies. John is highly involved in social media, and in addition to his blogs can be found on Twitter: @techguy.