Health tech startup Commure said Friday that it has agreed to buy AI medical scribe company Augmedix for $139 million to beef up its software tools for health systems and doctors.
The deal, which will take publicly traded Augmedix private, gives General Catalyst-backed Commure a stronger foothold in the red-hot market for tools that use AI to automate the burdensome process of documenting medical visits. Dozens of companies have flooded that market, with startups like Abridge, Ambience and Nabla raising tens of millions of dollars this year.
The deal also comes just a few months after Commure bought provider software company Athelas in a deal that valued the company at $6 billion.
Commure launched in 2020 as a health data platform that aimed to solve for a lack of interoperability between electronic health records and health system applications, and allow developers to more easily create tools for healthcare providers in a common technology language. Hemant Taneja, managing partner at General Catalyst, co-founded Commure.
But over time, through a number of acquisitions, Commure has evolved into what CEO Tanay Tandon referred to as “provider productivity platform” that uses AI to help save healthcare workers’ time.
“The mission of the business, which incidentally, is quite similar to Augmedix’s vision, is: How do you use software and machine learning, and create software to just boost the productivity of providers?” he told Endpoints News in an interview.
To that end, Commure last year bought Athelas, the company co-founded by Tandon that sold tools for billing, workflow automation, and remote patient monitoring to providers. Athelas also offered a tool to automate medical summaries, particularly for outpatient clinics and hospitalists.
Buying Augmedix allows Commure to add medical documentation tools for a different set of providers, including acute care and emergency department physicians, where it has historically focused, Tandon said. Augmedix’s tools are able to pull in context from a patient’s electronic health record, he said.
Manny Krakaris“I think that direction in the product that goes deeper into the system is something we wanted to bring in,” Tandon said.
Augmedix, founded in 2013, also has the biggest customer base outside of competitor Nuance, which was bought by Microsoft for $16 billion in 2022. One of those customers is hospital giant HCA, which is also one of Commure’s core customers and holds a seat on its board. Augmedix reported revenue of $44.9 million in 2023, and a net loss of $19.2 million.
Manny Krakaris, the CEO of Augmedix, said joining forces with Commure will bring benefits to providers that go beyond AI scribing to improve how they bill and collect for their services.
“Our vision has always been to create data, or provide data that can empower the (revenue cycle management) process so that there is less friction within that process, less iterations of back and forth between payers and providers and the RCM companies in the middle,” Krakaris told Endpoints. “By combining with Commure, we can actually provide an integrated, seamless journey that spans well beyond the point of care, goes all the way through our RCM to ensure that there’s that optimal efficiency.”