Bethesda, Md., Oct. 31, 2008—CodeRyte, Inc., the healthcare industry’s fastest growing computer-assisted coding and Natural Language Processing (NLP) company, announced today that a new investor, Versant Ventures, joined its existing group of investors providing $13 million of expansion capital to the company.

CodeRyte’s NLP technology and Web-enabled workflow software appropriately strengthens reimbursement, reduces denials and decreases outstanding account receivables while improving the efficiency of its rapidly growing client base that includes 30 of the nation’s most prestigious academic medical centers, 30 leading billing companies and 50 leading physician practices. CodeRyte’s technology excels at navigating through complex and compliance-sensitive medical records.

"Versant looks for companies offering unique products and services that deliver significant value to physicians, hospitals and other healthcare organizations,” said Barbara Lubash, co-founder of Versant Ventures. “We are impressed with CodeRyte’s track record in improving the speed, cost, accuracy and quality of coding for its clients, and its future potential to revolutionize clinical data management.”

“In this difficult financial environment, raising this capital on attractive terms is a testament to the scale of the healthcare IT market opportunity and CodeRyte’s compelling product,” said Bryan Roberts, managing general partner of Venrock, a lead investor in CodeRyte.

The expansion capital from Versant Ventures and other nationally recognized venture firms comes as CodeRyte surpasses more than 115 clients. WinterGreen Research reported this quarter that CodeRyte is winning “the majority of the deals in the market” and the company’s strict adherence to compliance regulations is one of the primary drivers of that new business. Clients, particularly those in the academic setting, continue to validate CodeRyte’s compliance protocols as a key factor in their decision. The market is showing a clear preference for CodeRyte and the additional capital enables the company to increase its already substantial growth rate by investing in additional staff and technology to better serve current and future clients.

“Versant Ventures brings a deep understanding of healthcare and will help CodeRyte continue to build on its dramatic and cost-effective value propositions,” said Andy Kapit, CodeRyte chief executive officer. “The Versant team did its homework during this process: interviewing clients, meeting with CodeRyte’s compliance lawyers and making sure our technology ensures compliance and security. Everyone at CodeRyte is proud to have such a prestigious firm invest in CodeRyte.”

About Versant Ventures

Since its formation in 1999, Versant Ventures, a premier seed and early-stage healthcare venture firm, has invested in 95 companies that have made important clinical contributions across a breadth of therapeutic areas. With $1.6 billion capital under management in four funds, Versant Ventures investments include: St. Francis Medical Technologies, Inc., Pharmion Corp. and a number of now-current public companies including Genomic Health (GHDX) and Insulet Corp. (PODD). Versant’s two primary offices are in Menlo Park and Newport Beach, Calif. For more information, please visit www.versantventures.com.

About CodeRyte

CodeRyte is the premier provider of computer-assisted coding and context-sensitive clinical data extraction solutions for the healthcare industry. Our sophisticated technology streamlines the coding process and identifies clinically relevant information from medical records. Our clients secure their rightful reimbursement and enhance compliance and efficiency through computer-assisted coding. CodeRyte’s data extraction solutions analyze the language of physician narratives and elevate previously undiscovered data for critical treatment and business decisions. Many of the nation’s top physician practices, billing companies and academic medical centers rely on CodeRyte as the centerpiece of their coding and data mining operations. More information is available at www.coderyte.com.

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