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Khosla Ventures seeks $1.1 billion for its latest fund

Khosla Ventures, the eponymous venture firm helmed by longtime Silicon Valley rainmaker, Vinod Khosla, is raising  $1.1 billion for its latest venture fund, according to documents from the Securities and Exchange Commission.

The filing was first spotted by Ari Levy over at CNBC.

Khosla, whose investing career began at Kleiner Perkins Caufield & Byers (back when it was still called Kleiner Perkins Caufield & Byers) is rightly famous for a number of bets on enterprise software companies and was a richly rewarded co-founder of Sun Microsystems before venturing into the world of venture capital.

Like his former partner, John Doerr, Khosla also went all-in on renewable energy and sustainability both at Kleiner Perkins and then later at his own fund, which he reportedly launched with several hundreds of millions of dollars from his personal fortune.

Over the years Khosla Ventures has placed bets and scored big wins across a wide range of industries including cybersecurity (with the over $1 billion acquisition of portfolio company Cylance), sustainability (with the Climate Corp. acquisition), and healthcare (through the public offering of Editas).

And the current portfolio should also have some big exits with a roster that includes: the unicorn lending company, Affirm; the nuclear fusion technology developer, Commonwealth Fusion Systems (maybe not a winner, but so so so cool); delivery company, DoorDash; the meat replacement maker, Impossible Foods; grocery delivery service, Instacart; security technology developer, Okta; the health insurance provider, Oscar; and the payment companies Square and Stripe .

That’s quite a string of unicorn (and would-be unicorn) investments. And it speaks to the breadth of the firm’s interests that run the gamut from healthcare to fintech to sustainability and the future of food.

Khosla will likely benefit from the surge of interest in investments that adhere to new environmental, social responsibility and corporate governance standards.

There are billions of dollars that are looking for a home that can invest along those criteria, and for the last 16 years or so, that’s exactly what Khosla Ventures has been doing.

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Telehealth Startup Nurx Rolling Out At-Home Test For COVID-19 

Nurx, the telehealth startup known for delivering birth control and at-home sexually transmitted infection testing, is rolling out a home test for COVID-19.
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The company’s long-time partner, Molecular Testing Labs, is developing the test, which will be available as soon as Friday afternoon.
“Drive-through …

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Across furtive videocons, junior VCs wait for the layoffs to begin

Amid post-YC Demo Day discussions and online “coffee” catchups, there is a lingering sense of dread among VCs — particularly junior VCs — about their own job security.
Over the past few days, I have heard rumors — and they are just rumors, for now — about three recognizable venture firms and how they …

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Interos Raises $17.5M Series B In Venrock-Led Round

Risk management startup Interos landed $17.5 million in a new round of funding, the company announced Thursday.
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Interos ingests more than 85,000 information feeds a month and uses machine learning across five risk factor categories to understand which risk factors are important to customers and could disrupt …

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Zumper Secures $60M To Become The ‘Airbnb For One-Year Leasing’

Zumper, a rental marketplace for renters and landlords, announced this morning it has raised $60 million in a Series D round led by new investor
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Existing backer Greycroft also participated in the financing, which brings San Francisco-based Zumper’s total funding since its 2012 inception …

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Practice Fusion, backed by top VCs before selling in 2018, pushed doctors to prescribe opioids in kickback scheme

Practice Fusion, a medical records startup that attracted more than $150 million from VCs, including at Founders Fund, Kleiner Perkins, and Artis Ventures, has some negative press coverage since selling to its older and publicly traded rival Allscripts in a $100 million cash deal in early 2018.

Yet it appears that Practice Fusion, founded in 2005, was run even more poorly than has been reported. In fact, the company was just tied to same drug overdose epidemic that has killed tens of thousands of Americans in just the last few years alone. How is it possible that a venture-backed, San Francisco-based medical records startup could have that kind of impact? In a word: kickbacks.

According to the U.S. Department of Justice, Practice Fusion solicited and received pay from a major (unnamed for now) opioid company in exchange for using its EHR software to influence doctors in the act of prescribing opioid pain medications. Specifically, according to court documents released earlier today by federal prosecutors in Vermont, Practice Fusion solicited a nearly $1 million payment from the opioid company, promising that in exchange it would create alerts in its software that would cause physicians to write more prescriptions for extended release opioids than were needed.

Practice Fusion has agreed to pay $145 million to resolve the DOJ’s criminal and civil investigations, including a $26 million criminal fine and a $118.6 million civil settlement that “also resolves allegations of kickbacks relating to thirteen other CDS arrangements where Practice Fusion agreed with pharmaceutical companies to implement CDS alerts intended to increase sales of their products.”

Not last, it agreed to post documents about its conduct on a public website — though apparently not on its own site, which instead features very typical marketing language, beginning with the suggestion that visitors, “Meet the EHR that helps independent practices thrive.”

The news isn’t featured on Practice Fusion’s still live blog or press section or a separate “resource center” area, either. And good luck finding mention of the settlement on the site of Allscripts, which has no acknowledgment of the case listed on its site that we can find. Instead, a vice president at Allscripts, Brian Farley, today released a statement that reads:  “Since learning of this matter we have further strengthened Practice Fusion’s compliance program. Allscripts recognizes the devastating impact that opioids have had on communities nationwide, and we are using our technology to fight this epidemic.”

Allscripts has denied from the start that it knew the depths of Practice Fusion’s woes, even while it apparently had an inkling. According to numerous reports, AllScripts submitted a nonbinding letter of intent in May 2017 to purchase Practice Fusion for between $225 million and $250 million, which is twice what it paid seven months later.

According to FierceBiotech, Allscripts pulled its offer in June 2017 after an other EHR vendor, eClinicalWorks, settled with federal prosecutors for $155 million to resolve allegations that it falsified EHR certification. The “settlement suddenly clarified [for Allscripts] just how expensive a similar legal battle could be,” says the outlet, noting that the DOJ had separately reached out to Practice Fusion about its own EHR certification in March of 2017.

Either way, by last August, AllScripts had agreed to pay the $145 million settlement after reaching an agreement with the DOJ related to what was then an ongoing investigation. At the time, Allscripts President Rick Poulton told investors during a second quarter earnings call, “As you know from our previous SEC filings, DOJ began investigations into certain practices of Practice Fusion before we acquired the business early last year. These investigations had many similarities that have either been settled or remain active with many of our industry competitors.”

Poulton added, “After acquiring Practice Fusion, the DOJ investigations continued to expand and required expanding levels of resources from us to support.”

The company’s admission of guilt and accompanying settlement is a black mark for everyone involved with Practice Fusion from its earliest days, particularly given that this latest news punctuates a string of concerning revelations about the way that Practice Fusion was managed.

Soon after the startup was acquired by Allscripts, for example, CNBC published a report outlining “several years of missed targets,” a “management shake-up that resulted in the ouster of founder and CEO Ryan Howard,” and a board that was “quietly looking for a way out.” It also reported that many longtime employees left the company with nothing while managers “banked millions” in a pre-arranged carve-out.

Christina Nolan, U.S. Attorney for the District of Vermont had her own harsh words in delivering news of the settlement earlier today, calling Practice Fusion’s conduct “abhorrent.”

Said Nolan, “During the height of the opioid crisis, the company took a million-dollar kickback to allow an opioid company to inject itself in the sacred doctor-patient relationship so that it could peddle even more of its highly addictive and dangerous opioids.

“The companies illegally conspired to allow the drug company to have its thumb on the scale at precisely the moment a doctor was making incredibly intimate, personal, and important decisions about a patient’s medical care, including the need for pain medication and prescription amounts.”

Source: TechCrunch