Venture Firm NEA Scoops Up DaVita’s Primary Care Clinics for $100M

New Enterprise Associates has acquired DaVita’s portfolio of primary care clinics for roughly $100 million. Paladina Health currently operates 53 clinics in 10 states.

“Paladina is doing some remarkable things in primary care, and there is an opportunity to further innovate and expand,” said NEA’s Mohamad Makhzoumi. “That’s what got us excited.”

Silicon Valley-based NEA, which has $20 billion in committed capital under management, has a long-standing relationship with DaVita, which is best known for its kidney dialysis business. NEA’s former general partner, John M. Nehra, has been on DaVita’s board for almost 20 years.

In 2011, NEA bought DSI Renal from DaVita. Four years later, it sold the company to U.S. Renal Care for an undisclosed amount.

Makhzoumi said NEA typically invests in startups. However, it occasionally acquires majority positions in existing companies.

Paladina operates a direct primary care business, also known as DPC, which means it contracts with employers directly to provide healthcare to employees and pays a monthly fee instead of relying on health insurance. The DPC model moves away from healthcare’s current “fee for service” payments, and edges toward “value-based care,” which compensates and incentivizes healthcare providers to keep patients healthy.

Paladina CEO Chris Miller said the company’s future plans include expanding into more states.

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