A Chicago advertising startup that partnered in late October with Navicent Health is being sued by its investors who allege the company presented false data and financial reports to secure nearly $500 million in funding earlier this year.
Outcome Holdings LLC and its co-founders, Rishi Shah and Shradha Agarwal, were sued in New York Supreme Court in New York County on Nov. 7, a little less than two weeks after the partnership with Macon’s Navicent Health was announced.
An investment unit of Goldman Sachs Group Inc., Google parent company Alphabet Inc., and other firms allege the company and its founders misled them by knowingly providing false data and financial reports before the firms invested $487.5 million beginning in March.
The company, which also goes by the name Outcome Health, installs video screens and tablets in healthcare providers’ offices. Profits come from advertising revenue.
Never miss a local story.
“Through our partnership with Navicent Health, we will connect with patients during the early stages of their experience, equipping them with the tools and information to have meaningful conversations with their physicians that impact the success of their treatment and experience,” Shah said in an Oct. 26 hospital news release.
The company was set to work primarily with the hospital’s Peyton Anderson Cancer Center, installing an “innovative education platform across the entire patient experience, including waiting areas, exam rooms and infusion chairs,” the release states.
Since news of the lawsuit broke last week, two Chicago-area hospitals have reportedly backed away from Outcome Health.
Officials representing Advocate Health Care and Edward-Elmhurst Health both told The Chicago Tribune that their companies are suspending plans to further engage with Outcome Health.
It is unclear whether Navicent Health in Macon is considering similar action.
“Navicent Health is currently following this situation as it develops,” spokeswoman Megan Allen said in an email to The Telegraph late Friday.
Recently, a number of major advertisers and agencies said they pulled tens of millions of dollars in ads from Outcome Health.
Outcome Health investors asked the court to award damages and require Shah, Agarwal and Outcome Health to return their investments.
Spokesman John Eddy says Shah and Agarwal are calling the lawsuit a “money grab” that “simply is inexcusable and disappointing.”
The Associated Press contributed to this report.