Rishi Shah, who quit college to pursue entrepreneurial dreams, became a billionaire last week. And his business partner, Shradha Agarwal, is close behind.
Their windfall came with a $600 million infusion of venture capital into Outcome Health, the Chicago health care tech company they founded in 2006. It’s now valued at $5.6 billion.
Outcome Health installs touchscreens in doctor’s offices and uses specialized software to help physicians and patients make treatment decisions. Health care marketers and pharmaceutical companies use them too.
“It’s changing the life of a doctor,” Shah said in an interview about the technology.
He and Agarwal have been dogged in building their business. Last week’s investment came primarily from Chicago-based Pritzker Group, Goldman Sachs and CapitalG, which is connected to Google.
Not since Groupon, has a company raised that kind of capital in a single round of funding. In 2011, Groupon raised $950 million from investors in a fifth round of funding. For Outcome Health, it’s the first infusion of investment money.
Forbes now estimates Shah’s net worth at $3.6 billion. Not bad for a 31-year-old.
“It’s an acknowledgment that smart investors are beginning to reward prudent management with a focus on revenue and profitability instead of crazy moonshot stories which are more likely to crash and burn than to ever succeed,” said Howard Tullman, who heads the 1871 entrepreneur hub in Chicago.
Shah’s success is no surprise to his family. Mom Sonal Shah remembers her son at age 5 knocking on neighbors’ doors selling hand-painted pictures. His endocrinologist father, Dr. Upendra Shah, realized early on that medicine wasn’t for Rishi — he didn’t like the sight of blood.
But the younger Shah “liked to talk about the issues related to health care,” said his dad. Shree Shah remembers her older brother as the inspirational organizer at Hinsdale Central High School. After the events of 9/11, Shah started a weekly discussion group to focus on world issues. “The goal was to bring light to some of the things going on around us beyond school and studying,” his sister recalls.
Shah met Agarwal at Northwestern University in the early 2000s and they started their company after cobbling together their own money. Before accepting venture capital, Shah owned 80 percent of the company; Agarwal 20 percent.
The company expects to be in 70 percent of doctors’ offices nationwide by 2020 and intends to expand overseas. There’s even talk of an IPO.
Last week’s deal didn’t prompt a big bash. Shah said he’s hanging onto the advice of his mentor, Jeff Coney, director of economic development at Northwestern. “You only pop champagne when you win with customers. Now it’s time to put on the coffee and get to work.”