Existing investors have pumped another $3 million into health insurance software developer Bloodhound to take the firm to profitability.
The fourth-round funding was led by Noro-Moseley Partners of Atlanta and included A.M. Pappas & Associates of Research Triangle Park, Eno River Capital of Durham and Wakefield Group of Charlotte.
Bloodhound has developed a software tool that helps health insurers track down claims that otherwise would result in overpayments. The company had raised $20 million in three previous rounds, the last of which came two years ago.
Company officials “have much more visibility into the pipeline” and now know where to concentrate their efforts to produce revenue, says Daniel Egger of Eno River. He projects that the company will reach profitability in the second or third quarter of next year.
“The company has been bumping along, as have all companies in this recession,” Egger says. “We saw we had a cash flow gap of less than $3 million, so everyone went around the table and chipped in.”
The deal “is not a desperation financing,” he says, calling it “basically a flat round” that preserves all preferred stock positions.