By Timothy Hay, Dow Jones VentureWire 6/29/2011
HealthTeacher Inc., the provider of an online health-and-wellness curriculum in use by millions of schoolchildren in the U.S., said it has raised new funding as it seeks to add gaming to its lessons and go mobile.
Return investor Chrysalis Ventures led the Series C round, joined by newcomer SSM Partners and company executives, said Chrysalis Managing Director Koleman Karleski. Casey West of SSM will join Karleski on the board of the Nashville, Tenn.-based company.
Petra Capital Partners, which invested in HealthTeacher’s first two institutional rounds, was bought out by Chrysalis and SSM in the $5.2 million Series C, Chief Executive Scott McQuigg said.
McQuigg declined to comment on the size of the stake that Petra held, but a $5.2 million round was enough to buy out the firm and still have capital left over for other uses, he said. He wouldn’t say how much of the round’s amount went to the company.
Petra, whose most recent fund closed in 2008, is winding down its 1999 fund, McQuigg said, and isn’t providing follow-ons for companies from that fund’s portfolio. “We were one of their last holdings,” McQuigg said. Petra couldn’t immediately be reached for comment.
Chrysalis holds a majority stake in the company, Karleski said. HealthTeacher raised about $8.3 million in three previous funding events, beginning in 2005, VentureWire records show.
As public schools scramble with budget cuts and other woes, HealthTeacher aims to make sure the health curriculum doesn’t suffer, Karleski said. The company offers lesson plans via software as a service, and content from major hospitals and other health-care providers.
The company was founded in 2005 under the name ConnectivHealth Inc. and soon began snapping up small health-care information companies–another source of content. It acquired Scottsdale, Ariz.-based FaxWatch Inc., a literature research company, in 2005, and Nashville-based Relegent Inc., a health curriculum company, a couple of years later.
Since that time, the company has been tapping health-care providers for more lessons and getting more than 10,000 schools to access and teach the growing curriculum, Karleski said.
“This is one of the fastest-growing companies in our portfolio,” he said. “They have grown a few hundred percent each year for the last three years.”
The company recently reached break-even, he said. He declined to give a valuation.
HealthTeacher generated headlines recently when a senior product manager at Apple Inc.’s iCloud service, John Herbold, left Apple to join the start-up as vice president of product.
With its Series C, the company aims to add social features like games, and make some of its curriculum available via mobile devices. “You have to meet the kids where they are,” Karleski said.
Health-care providers pay the company to offer certain lessons, the most popular of which concern childhood obesity, he said.
Potential acquirers have begun to circle HealthTeacher, Karleski said, but he declined to give further details about the company’s roadmap.