Kevin Ryan sold two big companies in media and e-commerce in the last year. Now he’s trying to help build a new one from scratch in a new field for him: Health care.
The founder of Business Insider and Gilt Groupe has co-founded Nomad Health, a New York City startup aiming to take advantage of what it believes are inefficiencies in how hospitals and clinics hire temporary staff.
The startup recently raised a $4 million Series A investment that valued it at nearly $20 million including the new funds. First Round Capital and RRE Ventures led the financing.
Nomad Health is building a website where doctors and nurses can search for temporary work, and hospitals and clinics can find temporary staffing. Along the way, the plan is to use a digital setting to make it easier for doctors to find work while lowering the fees hospitals currently pay brokers to help them staff up. The hope is medical facilities will pass on some of the savings in the form of better pay to medical professionals as a recruiting tactic.
Competitors include publicly traded AMN Healthcare, which has a market cap of $2 billion.
The initial vision came from two neurosurgeons — one of whom approached Ryan after a speaking engagement at Yale — who had the idea but not the time nor plan to execute on it. At the time, Ryan had “never even heard of the space,” he said in an interview, but came back to them with an offer after researching the idea: He would be chairman, help the company raise money and hire a full-time CEO; they would be formal advisers to the company and get a board seat. One of them, Maxwell Laurans, is a board member; the other, Ryan Grant, is a board observer.
“Most good marketplaces have been done because they’re the best long-term business model,” Ryan said, explaining why he was excited about this opportunity. “Most people just don’t think about the temporary doctor market.”
More than 90 percent of U.S. hospitals, however, hire doctors on a temporary basis, according to the startup’s CEO Alexi Nazem. Nazem is a doctor himself who also has a degree from Harvard Business School.
Ryan, who is also the co-founder of other startups like MongoDB and Zola, initially funded the company with a $350,000 check. He has since invested more and is the largest shareholder.
The funding comes less than a year after Ryan sold Business Insider to German publisher Axel Springer in a deal that valued it at $442 million. That was a good outcome.
Gilt’s $250 million sale, on the other hand, wasn’t a great one when you consider the hundreds of millions it had raised and that its valuation once hit $1 billion.
“The question you have to ask yourself as objectively as you can is, ‘A year from now, is the company going to be more valuable or less valuable,’” he said. “I thought Business Insider was going to be more valuable” — but it got a hard-to-turn-down offer — “and I wasn’t sure Gilt was going to.”
This article originally appeared on Recode.net.