Vidyo Gets $10 Million From Health Care Giant Kaiser Permanente

The funding illustrates the health care industry's interest in video conferencing technology for improving care and saving money.


Vidyo has raised another $15 million in funding, including $10 million from the corporate venture arm of health care company Kaiser Permanente, which has been a customer of the video conferencing vendor.

The company announced the latest round of funding Dec. 14, with officials saying that Vidyo has now raised $163 million. The company, which rolled out its first software-based video conferencing product in 2008, is one of a growing number of smaller companies that are taking advantage of the changes roiling the market to gain a foothold in the space dominated by such established players as Cisco Systems, Polycom and Logitech's Lifesize Communications.

Other firms that have invested in Vidyo include Menlo Ventures, Rho Ventures, Sevin Rosen Funds and QuestMark Partners.

Officials with Vidyo and other vendors see the health care space as one that can benefit from the adoption of video conferencing. Vidyo offers a range of solutions aimed at the market.

"The VidyoWorks platform and APIs have been deployed by the top names in healthcare and the quality and experience delivered have played a key role in advancing the use of telemedicine across hospital systems and to patient homes," Vidyo CEO Eran Westman said in a statement.

Telemedicine is a push that is being made nationwide, and one Vidyo wants to accelerate, according to Kelly Williams, the company's director of public relations.

"Our healthcare system has undergone dramatic and sweeping changes in recent years," Williams wrote in a post on the company blog in October. "One such change that took place in 2014 was adoption of a telemedicine policy that helps further the delivery of convenient, clinically meaningful video-based interactions between physicians and patients. Telemedicine or virtual care is a practice we're familiar with and bullish on here at Vidyo."

According to officials, Vidyo's technology is powering telehealth applications for more than 40 percent of the top 100 integrated delivery networks in the United States and is being used by some of the top electronic health record management systems worldwide. The VidyoWorks platform offers a level of encryption that complies with the demands in the Health Insurance Portability and Accountability Act (HIPAA).

Jordan Kramer, director of Kaiser Permanente Ventures, said in a statement that using Vidyo's technology increases "patient convenience and the overall quality of care."

Video conferencing in the health care field is seen as a way of driving down costs and improving efficiencies while enhancing the patient's experience and enabling doctors to treat patients in areas that are difficult to reach. A 2014 study of the use of video conferencing technology at the Veteran's Administration hospital in Indianapolis found that between 2011 and 2013, the video telehealth program saved veterans from having to travel a total of 770,075 miles for appointments at the hospital, which saved the federal government $331,132 in reimbursements.

The video conferencing space continues to migrate toward cloud- and software-based solutions as the business world becomes more mobile and more cloud-enabled. The number of employees who work from remote offices or on the road continues to increase, and the cloud gives businesses as way of ensuring that they can participate in video collaborations from anywhere at any time and on any device, such as notebooks, smartphones and tablets.

"We continue to see the affect of lower-cost video systems and products, new software- and cloud-based video offerings, and Web browser usage for real-time video collaboration combining to fundamentally impact how videoconferencing solutions are bought and deployed by organizations today," Petr Jirovsky, research manager for IDC's Worldwide Networking Trackers unit, said in a statement when the analyst firm this month released its latest market findings.

Cisco, Polycom and others continue to grow their software and cloud portfolios, while Vidyo and other smaller vendors—including Blue Jeans Network and Zoom Video Communications—ramp up their offerings. According to IDC, Cisco continues to dominate the video conferencing space, with 45.9 percent of the market, followed by Polycom and Huawei Technologies.