Setting the stage for an IPO two years from now, data warehousing and analytics company Health Catalyst raised $70 million in a rare and oversubscribed Series D round of funding.

Health Catalyst set out to raise $60 million and upped its goal to $70 million when the funding offers were three times as much as what the company had sought.

With a valuation in excess of $500 million, Health Catalyst surpasses that of many public companies.

"While some other companies have gone public at our size, we want to make sure we can be a really successful, predictable public company, so we wanted to achieve some additional size and scale before going public," Health Catalyst CEO Dan Burton told Healthcare IT News.

"We have no doubt that's the path that we're on," Burton said. "We just want to make sure we're really ready to be very, very effective once we get there."

Norwest Venture Partners, an investor from start-up days, led this latest round of funding, which included existing investors Sequoia Capital, Kaiser Permanente Ventures, Sorenson Capital, CHV Capital – which is an Indiana University Health Company, and Partners HealthCare.

[See also: Health Catalyst shows Midas touch.]

Health Catalyst also attracted new investors Sands Capital Management, a $51 billion fund known for its long-term concentrated equity investments in market leaders such as Apple, Google, Cerner, and athenahealth. Also joining as new investors are Tenaya Capital, Epic Ventures, and Leavitt Equity Partners.

Existing investors contributed about half, and the new investors contributed the other half.

"Our investors have been a really important part of our growth," Burton said. "We've taken a different approach. We've welcomed more strategic investors. They give the company a different feel, I think. We like the mission orientation that we retain."

The Health Catalyst team was thoughtful about selecting investors to that best match the company's goals.

The funding raised in this round of funding will be used to fund significant continued product development investments, particularly in areas of advanced clinical and workflow applications designed to measurably improve clinical and financial outcomes, Burton said.

Health Catalyst’s value proposition is that its solutions drive permanent improvements in the efficiency and effectiveness of care delivery and population health.

"As more healthcare organizations are coming to understand, data warehousing and analytics are foundational to their success under new payment and risk models," Burton said. "This additional capital will enable Health Catalyst to develop the solutions necessary to offer every health system in the U.S. a roadmap to systematically reduce waste and improve care delivery, across every major clinical and workflow area.”

Most of the flagship product – the data warehouse – is nearly complete in terms of development, Burton said. However, the company needs to keep investing in the analytics app layer.

"The analytics apps use that data from the data warehouse to pinpoint where there are opportunities for improvement," he said, "and for us to be a longterm strategic partner to almost any health system in this space, we need to have a suite of analytics apps across the waterfront, both clinically and from a worklow perspective. We want to be the best partner to enable these health systems to measurably improve outcomes and bend their cost curves."

Steve Barlow and Thomas Burton, both with roots at Intermountain Healthcare, founded Health Catalyst in 2008. Minneapolis-based Allina Health became their first customer. At the start of 2015, Allina became a partner, investing $100 million in the company and launching a 10-year initiative to build a new model for improving outcomes system-wide.

It's a shared-risk agreement with a lofty goal: To improve the quality and lower the cost of care for Allina's patients and to provide a model for outcomes improvement across the country.

[See also: Allina goes all in for outcomes with Health Catalyst.]

Today, Health Catalyst has an array of clients, small, medium and large, including big names like Partners HealthCare, Kaiser and Stanford among them, and Burton said it would soon announce a new Allina-like partnership with another of its clients.