Digital health startup Yuvo Health has raised $7.3 million in seed funding, the company announced Tuesday.

Yuvo Health, which launched last January, provides management software that federally qualified medical centers can use to transition from fee-for-service to value-based payments. CEO Cesar Herrera said the lack of scale, regulatory burden and limited resources make it difficult for these safety net providers to participate in shared risk programs, limiting care coordination services and revenue opportunities for community health centers.

The startup doesn’t charge clinics to use its technology. Instead, Yuvo Health gets a cut of any savings realized through its services. Herrera said the company’s founders identify as Black, Indigenous and people of color, which is critical to gaining the trust of the organizations and patients that Yuvo Health aims to serve. The executive, who identified himself as Asian American, was uninsured for part of his childhood, he said.

“We have a deep personal connection to the mission of FQHC partners, and that’s what our life experience enables us to do,” Herrera said. Not our goal.”

Yuvo Health plans to use its investment to expand its initial program in the New York market, develop its technology platform and increase partnerships with community health centers and health insurers. Herrera declined to say how many centers and insurers currently work with Yuvo Health.

Investments in digital health startups like Yuvo Health are growing Main Street Health Help physicians transition from fee-for-service to value-based reimbursement. Herrera said Yuvo Health differentiates itself by focusing on the Medicaid population.

Although startups such as city ??block health, belong to health and brave health Recently attracted financing, Medicare-oriented companies are more popular with investors than those aimed at the Medicaid business. So much money has gone to primary care and insurtech startups focused on Medicare patients that some analysts think the market may be ready to explode.

Medicaid represents the “ultimate frontier” in a push to reduce costs and improve quality, Herrera said.and register It’s at an all-time high, so states are looking for ways to control costs, he said.

“For the vast majority of states, Medicaid spending is the number one cost item,” Herrera said. Everyone is paying close attention to how best to manage it, and people see an opportunity. “

AlleyCorp led the round with participation from AV8 Ventures, New York Ventures, Laconia Capital and Brooklyn Bridge Ventures, as well as angel investors including Dr. Melynda Barnes, chief medical officer of health tech company Ro.