By Editorial Team
Cityblock HealthIndependently confirmed
Cityblock Health entered into a definitive agreement to acquire Homeward Health in an all-stock transaction, paired with a $116M Series E financing round.
The round
Cityblock Health, a digital health company, has secured $116 million in Series E funding. The round was led by General Catalyst. This financing coincides with Cityblock Health’s definitive agreement to acquire Homeward Health in an all-stock transaction. While the financial details of the acquisition were not disclosed, Cityblock Health has now raised over $900 million to date. The company’s last major financing in 2021 was a $400 million late-stage round, which had valued the company at approximately $5.7 billion. Cityblock Health has indicated that it is not currently focused on an exit.
What Cityblock Health does
Cityblock Health, launched in 2017 from Alphabet’s Sidewalk Labs, focuses on delivering integrated health and social services to historically marginalized communities with complex needs. The company primarily serves urban Medicaid and dual-eligible members. Its model combines primary care, behavioral health, and chronic disease management, addressing social determinants of health such as transportation, housing, and access to healthy food.
The acquisition of Homeward Health will enable Cityblock to expand its reach into rural markets. Homeward Health’s clinical and regional infrastructure will be paired with Cityblock’s data assets and AI orchestration engine. This integration aims to scale Cityblock’s value-based, tech-enabled care model to reach high-need Medicare Advantage and dual-eligible members across diverse markets. Combined, the two companies are projected to serve nearly 250,000 individuals, positioning them to reach a significant portion of the 120 million people receiving government-funded healthcare in the U.S.
Since 2021, Cityblock Health has demonstrated significant financial and operational growth. The company has expanded its enterprise revenue by 323% and improved corporate operating expenses as a percentage of revenue by 64%. Its customer base has grown from 5 to 18 health plans, and EBITDA margins have improved by 81%. Cityblock currently serves almost 200,000 members, with an annualized revenue of $2.2 billion, marking a 77% year-over-year increase.
Why it matters
This funding round and acquisition come at a time when Medicare Advantage rate adjustments are tightening and federal Medicaid funding faces long-term pressures. The transaction positions Cityblock Health to address the challenges faced by early-generation value-based care platforms that have retrenched from high-acuity, lower-income populations due to high administrative friction and static risk-stratification models. By combining Cityblock’s data and care-orchestration platform with Homeward’s rural provider relationships and care model, the company aims to enhance its ability to coordinate care and prevent acute escalations. The increased scale from the acquisition is expected to further empower Cityblock to iterate and test its AI-enabled tooling, improving the identification of member needs and enabling care teams to deliver better outcomes.