Join Transform 2021 this July 12-16. Register for the AI event of the year.

Health care providers are laden with antiquated technological infrastructures and are afraid to bring them online for fear of violating HIPAA (the Health Insurance Portability and Accountability Act) or other industry regulatory requirements.

While there’s reason to tread carefully, with old tech comes new opportunity.

A wave of companies including Veeva Systems, Health Catalyst, and ClearDATA are building cloud-based platforms to align with the health care industry’s rigorous regulatory requirements. And they’re growing quickly: Veeva, which earns most of its revenue from its global life sciences CRM product, just had a wildly successful IPO on the New York Stock Exchange; data warehousing company Health Catalyst raised a $33 million funding round this Jan.; and cloud computing firm ClearDATA just closed a $14 million round, the company announced Thursday morning.

The Phoenix, Ariz.-based ClearDATA hosts data and applications for hospitals, physician groups, and health care software vendors. Its products include a HIPAA-compliant cloud, medical imaging storage, automation, disaster recovery, offsite backup, virtual desktop infrastructure, and security services. The company guarantees 100 percent network uptime and a “fanatical” devotion to security and compliance, CEO Darin Brannan told VentureBeat in an interview.

Amazon Web Services, the largest cloud computing vendor, also touts it services as HIPAA-compliant.

“Other clouds might provide some level of HIPAA compliance, but we provide HIPAA compliance at every pillar,” said Brannan. Around “95 percent of health care companies don’t have the time, resources, or understanding of how to build out a cloud computing environment.”

Brannan noted that the company conducts a security risk analysis and secures all potential breach zones before migrating its customers to the cloud. ClearDATA also fully encrypts customer data at rest and in motion, he said.

The $14 million round ClearDATA just closed includes the initial $7 million the company announced this August. It extended the round to include Merck Global Health Innovation Fund, which joined existing investors Excel Venture Management and Norwest Venture Partners.

“One of the key tenets for us is the team,” said Robert Abbott, a general partner at Norwest Venture Partners, explaining why his firm chose to invest in ClearDATA. “They have both the health care domain expertise and the IT expertise — if you look at the makeup of the team, it’s a nice blend of the two.”

ClearDATA will use the newly raised capital primarily for sales and marketing efforts, said Brannan, though it will also continue to build out its products and optimize operations. Brannan told us that ClearDATA has grown 150 percent since last year, though he declined to disclose the size of the company.

A major focus for the company going forward will be capitalizing on the vast mountains of data health care providers store on its service.

“We sit on close to the exobyte range of technical health care information, both on the clinical side and the financial side,” said Brannan. “We’re working on methods of extracting, organizing, and analyzing that data. … We see that as a big opportunity for us over the next couple years.”

For more on the challenges and opportunities of the health IT market, check out this video from our CloudBeat conference last year that features ClearDATA’s CEO in conversation with VentureBeat executive editor Dylan Tweney.


VentureBeat's mission is to be a digital town square for technical decision-makers to gain knowledge about transformative technology and transact. Our site delivers essential information on data technologies and strategies to guide you as you lead your organizations. We invite you to become a member of our community, to access:
  • up-to-date information on the subjects of interest to you
  • our newsletters
  • gated thought-leader content and discounted access to our prized events, such as Transform 2021: Learn More
  • networking features, and more
Become a member