Facebook Application Development

This is the second part in a two-part series on strategic investors in healthcare.

Healthcare IT departments have focused much of their attention on the $19 billion portion of the stimulus bill that is providing billions of subsidies for the adoption of electronic health records. While this is logical given the available money, it is paying for health IT systems optimized for the “do more, bill more” model of reimbursement that is rapidly being replaced by a value and outcomes based – a 180 shift in focus.

It’s hard to argue with modernizing the record-keeping in healthcare that isn’t far beyond how medicine was recorded in the time of Hippocrates. Thousands of lives are saved as a result of this modernization (e.g., avoiding frequent, deadly prescription errors). On the other hand, most companies benefiting from the stimulus have two massive gaps that will need to be addressed for health systems to thrive in the new environment they are facing.

SolarCity, the cleantech company backed by Tesla and SpaceX CEO Elon Musk, filed for an IPO this past week. But there’s hardly been a peep about it compared to most offerings.

That’s because under the recently passed JOBS Act, SolarCity didn’t have to publicly share anything about its financial performance when it filed. This is unlike LinkedIn and Pandora, which had to publicly release three years of data in filings that were more than 150 pages long. In SolarCity’s case, the company merely put out a two-paragraph statement saying that it had confidentially filed with the SEC and planned to have an IPO.

This is the new world under the JOBS Act, which was hastily passed last month. SolarCity qualifies as an “emerging growth” company, or one that’s had less than $1 billion in total revenues in the most recent year.

As a high school student in 2003, Bri Holt found himself increasingly frustrated by the fact that there was no easy way for he and his classmates to view their grades online. So, being familiar with the wizardry of web development, Holt decided to build his own, laying the foundations for what would become Engrade. While Holt went on to other projects, over the next seven-odd years, his simple, free online gradebook slowly found increasing, organic adoption among teachers. In 2010, Holt returned to Engrade, brought in some help, and over the next 18 months, focused on turning the education tool into a more robust, enterprise education platform.

To help it scale, the startup is now ready to take on venture funding, announcing yesterday that it has closed a $3 million round of seed funding, led by Rethink Education, along with participation from the non-profit, education-focused venture fund, NewSchools, which counts John Doerr as a board member, and individual investors including co-founder of Wireless Generation (one of edtech’s largest exits — to News Corp. for about $360M) Greg Gunn, Zac Zeitlin, and Richard Chino.

Facebook’s early investors and employees may sell up to $5.5 billion alongside the company’s offering. Facebook said today that it is selling 180 million shares of stock at $28 to 35 a share. On top of that, other stockholders are selling 157,415,352 shares. Those proceeds will not go to Facebook.

Chief executive Mark Zuckerberg is selling 30.2 million shares, or up to $1.05 billion, which will mostly go toward settling the multi-billion dollar tax bill he’ll face when he exercises his options.

Zuck’s not the only one selling shares though. So are Accel’s Jim Breyer*, Peter Thiel, LinkedIn founder Reid Hoffman and Zynga CEO Mark Pincus. Then there are the institutional entities like Accel* and DST. In fact, it’s Breyer and his firm Accel that are walking away with the biggest immediate payday from the IPO. Who’s not selling in this offering? Sean Parker, Facebook COO Sheryl Sandberg and Facebook co-founder Dustin Moskovitz.

Online payment platform WePay just announced that it has raised $10 million in a new financing round. This round was led by Ignition Partners. Two of the company’s existing investors, Highland Capital Partners and August Capital also participated in this round. WePay, which bills itself as the “anti-PayPal,” is a Y Combinator alumni and was founded in 2008. The company raised a total of $9.15 million in two previous rounds over the last two years. In today’s announcement, WePay notes that this is a growth round and is meant to allow it to scale its technology and workforce.