BlueCross BlueShield of Tennessee and Echo Health Ventures announced today in a press release that the health company has joined the investment company’s Echo Innovation Alliance.

Through the alliance, BlueCross BlueShield of Tennessee—the largest health benefit plan company in the state—plans to add new care models to lower costs and improve the quality of its services for members, BlueCross BlueShield of Tennessee president and CEO JD Hickey said in a press video.

BlueCross BlueShield of Tennessee’s involvement with Echo Innovation Alliance is occurring less than a year after the Blue Cross Blue Shield Association rescinded a rule in May 2021, which limited the total amount of revenue that member plans can generate from organizations unrelated to Blues businesses. Today’s announcement Marks the most recent Blues brand effort to scale its business, while also becoming more competitive through a partnership with a non-Blues company.

While the new alliance could result in new services, technology and capital, Bradley Ellis, senior director for Fitch Ratings, stopped short of calling it a consolidation. Instead, he views the alliance as an opportunity for BlueCross BlueShield of Tennessee to make use of venture capital technologies, as Echo Innovation Alliance also receives a return on its investment.

“Across the health insurance sector, you’ve seen a lot more investment in these types of things. It sounds like Echo is working with these companies to generate some funds to invest in these healthcare-type companies,” he said. “There’s a huge market and it’s growing by leaps and bounds, so a lot of people want to get involved in that.”

Echo Health Ventures formed the Alliance in January 2021 to extend its investment model, drive healthcare innovation and expand industry relationships, according to the press release. In addition to BlueCross BlueShield of Tennessee, the company’s portfolio also includes Cambia Health Solutions, Mosaic Health Solutions and USable Corporation, according to the press release.

The growth of venture capital firms, such as Echo Health Ventures, has been a boon to tech startups over the past decade. Compared to their incumbent counterparts, startups are newer to the field, but can provide novel approaches to old problems. If conducted successfully , that can increase their value, leading to a big profit for venture capital investors.

Digital health startups raised $29.1 billion in 2021—a record-setting year—across 729 deals, according to a report from Rock Health, an early-stage digital health venture that also compiles research in the sector. This aggregate is more than double the amount of funding that was raised in 2020. Not to mention, the total is also higher than all the funding that was accumulated from 2016 and 2019, according to the report.