Bertelsmann Investments Divests Phare Health Stake To U.S. Market Leader R1
Bertelsmann Investments has held a stake in the U.K.-based AI company since 2023.
Bertelsmann Investments (BI) has sold its stake in the British AI company Phare Health to R1, the U.S. market leader in revenue cycle management (RCM). BI first invested in the London-based start-up in 2023, the year it was founded, and made a follow-up investment in 2024. Phare Health operates primarily in the U.S. healthcare market.
Phare Health Ltd was founded by a team of healthcare and AI experts previously at Google DeepMind and leading AI research institutions. The young company develops generative AI products that help hospitals improve the effectiveness and efficiency of their billing processes. Shortly after its founding, Phare partnered with Bertelsmann Healthcare Investments (BHI), BI’s healthcare-focused venture fund, which supported the company financially and operationally together with co-investors such as General Catalyst and Meridian Health Ventures until the sale to R1.
‘Successful exit confirms our strategy’
Carsten Coesfeld, CEO of Bertelsmann Investments, said: “Our investment in Phare Health in 2023 was one of BI’s first in the healthcare market. The fact that we can now record such a quick and successful exit – to the U.S. market leader, no less – demonstrates the strength of our healthcare investment team. It confirms our strategy to invest globally in the digital healthcare market and, in doing so, open up a growth segment for the Group.”
Based in Murray, Utah, R1 is a pioneer in the intelligent automation of financial processes in healthcare. The acquisition of Phare Health marks an important step in R1’s strategy to leverage cutting-edge AI capabilities to comprehensively automate the revenue cycle and move closer to real-time adjudication of medical claims.
Thorsten Wirkes, Managing Director of Bertelsmann Healthcare Investments, said: “Accurate claims coding has major financial and compliance implications for providers, patients, and payors. Given the large sums involved in the inpatient sector where Phare operates, precise documentation is essential. This is where Phare Health’s AI-native capabilities come into play: assisted coding, automated coding, and clinical documentation improvement.”
Tim Schneider, Partner at Bertelsmann Healthcare Investments, added: “What the Phare team has achieved in just a few years – showing how to rethink the RCM tech stack – is remarkable. This early exit underscores our conviction in partnering with companies innovating where healthcare, AI, and payments intersect.”
