The digital advance care planning company Koda Health has secured an undisclosed sum in a second seed funding round.

The investment firm Ecliptic Capital led the round, with participation from Memorial Hermann Health System, AARP and the Texas Medical Center Venture Fund. Koda plans to use the funds to spur further expansion, including its patient engagement capabilities, as well as financing the launch of a second, “synergistic” product to be announced later this year, according to CEO Tatiana Fofanova.

“Part of this funding will be going to making sure that we can continue to deliver the quality that our clients expect at a new level of scale, whether that’s on patient outreach and maintaining and growing our engagement strategies, whether it’s operationalizing a lot of our client interactions and processes — everything from billing to reporting,” Fofanova told Palliative Care News. “Then another large proportion of this fund will go to the development and fleshing out of our second product line. We actually have a contract signed for the second product line as a proof of concept already, and it’s going to be synergistic to the advanced care planning product and set us up quite nicely for the series A.”

In addition to its investment, Memorial Herman also recently joined Texas Medical Center and other clients in making Koda’s advance care planning solution available to its patients.

“We are always looking for new ways to further engage our patients and make them feel better supported. The unique challenges of COVID-19 have only heightened the need for innovation in this area,” Feby Abraham, executive vice president and chief strategy officer for Memorial Hermann, said in a statement. “We believe investing in Koda Health will give patients the tools to make sure their wishes are carried forth and the burden is removed from their families to make those decisions.”

Fofanova co-founded Koda Health in 2020 with the company’s CMO Dr. Desh Mohan and Katelin Cherry, the company’s chief technology officer. The three met and began collaborating at the Texas Medical Center’s (TMCi) Biodesign program, which tasked them with finding solutions to problems affecting the health system. Koda Health spun out of that work as an independent company.

The company’s platform is designed to digitize patients’ decision-making around their care preferences and goals. Koda in February 2022 secured $3.5 million in growth capital to spur the expansion of its platform and hire additional staff. Though the dollar amount of the new round is confidential, the total investment was in the “same ballpark,” Fofanova said.

Following that 2022 investment round, Koda designed a repeatable sales and marketing strategy targeting potential clients almost entirely in the value-based care space. This includes Accountable Care Organizations (ACOs), insurance companies, health systems and value-based care enablers, among others.

Currently, Koda serves more than 700,000 patients through its digital platform. When the company launched, only its home state of Texas accepted its documents as legally binding. Today, Koda’s advance care plans are legal in all 50 states and are available in both English and Spanish.

“We’ve also built out from our software platform a services line that allows our specially trained advocates to navigate our clients’ most high risk patients after their plan is actually completed so that we’re able to ensure that a patient’s plan continues to stay relevant as their health changes,” Fofanova said. “We continue to make that alignment happen for the medical decision makers.”

A growing number of families will face end-of-life decisions as aging populations swell nationwide. Roughly 82 million people in the United States will be 65 or older by 2050, a 47% rise from 58 million in 2022, according to projections from the U.S. Census Bureau.

However, a large proportion of families nationwide have not held advance care planning discussions. Only 10.9% of 955, 777 Medicare decedents who died between 2017 and 2018 utilized these services, a JAMA Health Forum study found.

As it pursued this most recent infusion of capital, Koda set out to engage with health care-focused investors.

“The opportunities we are facing In this new phase of growth are pretty unique to health care. I think it made a lot of sense to focus on investors that have a deep understanding of the practice and the economics of health care in this population,” Fofanova said. “So this round, we sought out specifically health systems, payers, organizations that serve this population, like AARP, to help us build out this new strategy of scale so that we can operationalize all of these components. Even under the venture capital side of things, we’re looking for former operators, either of large-scale software businesses or of health care businesses.”