Vertical SaaS for Health Tech Raises $15M
Third Way Health, a platform that streamlines front-office operations for medical practices, has closed a $15 million Series A. The funding highlights investor interest in vertical SaaS startups that target industries with significant operational and regulatory complexity.
The oversubscribed Series A was led by Health Velocity Capital, with partner Kristin Torres Mowat heading the round. This brings Third Way Health's total funding to $22.5 million, following a 2025 strategic investment from Astrana Health and MedPOINT Management. Based in Los Angeles, Third Way Health was founded in 2022 by CEO Frederik Mueller, COO Timm Schneider, and CPO Royce Cheng. Mueller's background includes experience at Salesforce and in global healthcare consulting, giving him a unique perspective on the industry's operational and technological challenges. The company offers a hybrid human-AI solution to tackle administrative complexity in healthcare. By combining AI-powered workflow tools with dedicated teams, Third Way Health manages front-office tasks like scheduling, insurance verification, and prior authorizations. This approach aims to alleviate the staff burnout and financial pressures caused by fragmented processes and outdated technology. This model has demonstrated significant results for its clients, which collectively serve over 5 million patients annually. Practices using Third Way Health have seen up to a 40% reduction in front-office administrative costs, an average 11% increase in patient visits, and a 50% decrease in phone wait times. The new capital is earmarked for accelerating customer growth and expanding the company's operational footprint. Specific plans include scaling the sales and implementation teams and making deeper investments in its AI capabilities. Vertical SaaS solutions are gaining traction in healthcare because they offer specialized tools designed for the industry's unique regulatory and operational needs, unlike one-size-fits-all horizontal platforms. This targeted approach is attracting investors as the global vertical SaaS market is projected to reach $317.49 billion by 2032.
