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Oak HC/FT makes first investment, leads $25M series C financing for Limeade

(Story by Brian Gormley originally ran on WSJ/Dow Jones Venturewire) Oak HC/FT, the $500 million fund launched by members of Oak Investment Partners, has made its first investment, leading a $25 million financing for Limeade Inc., which helps employers implement wellness and employee-engagement programs. Limeade, a software-as-a-service company, is one of a few venture-backed startups looking to help employers improve workers’ health. Corporations’ drive to lower medical costs is increasing interest in tools to promote employee fitness and well-being. Others include Jiff Inc., which recently raised $18.3 million to help companies roll out digital-health incentive programs. Limeade, formed in 2006, counts employers such as Cincinnati Children’s Hospital Medical Center as clients. Limeade and Cincinnati Children’s partnered in 2011 to launch a program to improve employee health and fitness and to increase their use of preventive health care. Over the past three years, health-care costs have been lower for workers participating in the Limeade program than they have been for nonparticipants, according to the hospital and Limeade. Limeade and Cincinnati Children’s also created “challenges” enabling employees to earn points for participating in volunteer activities and programs aimed at career development and personal finance. “Our goal is not just about health cost reduction only, it’s about engaging the workforce in all the ways that are most strategic to [a] company,” Limeade Chief Executive Henry Albrecht said. Oak HC/FT is leading this Series C financing, which also includes return backer TVC Capital and Limeade employees and directors. The company, based in Bellevue, Wash., plans to use the capital to expand its sales and marketing and its platform. It hasn’t revealed specifics about its revenue and profitability. Oak HC/FT is a growth-equity fund raised this year by health-care and financial-services technology investors from Oak Investment Partners. The fund’s leaders, Managing Partner Ann Lamont and General Partners Andrew Adams and Patricia Kemp, previously backed companies such as Benefitfocus Inc., which went public in September 2013, and Castlight Health Inc., which went public in March. Benefitfocus helps people shop for benefits, while Castlight helps them to shop better by providing information about the price, quality and convenience of medical services. Limeade provides additional technology and services that enable employers to engage workers in ways that further their overall goals. An employer could use services from all three companies, according to Mr. Adams. “These three all work well in concert for the employer and the employee,” he said.