Carbon Health

Carbon Health, a primary and urgent care provider, filed for Chapter 11 bankruptcy on February 2, 2026 in the Southern District of Texas.^1239111618 The company had raised over $600 million in venture funding, including a $350 million round in 2021 led by Blackstone's Horizon at a $3 billion valuation.^23891011 The bankruptcy plan, confirmed on May 29, 2026, included a $100 million debt-for-equity exchange transferring majority ownership to a lender group led by Future Solution Investments LLC.⁴¹⁷

Timeline

Money raised

Carbon Health raised a total of $688.42 million in funding, according to Forge.⁹ In June 2019, Carbon Health raised a $29.25 million Series B round.⁹ In May 2020, Carbon Health raised a $20.1 million Series B-1 round.⁹ In November 2020, Carbon Health raised a $120.39 million Series C round.⁹ In July 2021, Carbon Health raised a $350 million Series D round led by The Blackstone Group at a $3.3 billion valuation.⁸⁹¹⁰ The Chapter 11 plan included approximately $33 million in new capital and a $100 million debt-for-equity exchange.⁴¹⁷

Investors named in the sources: The Blackstone Group⁸⁹, Blackstone’s Horizon³, Lux Capital⁹, Sand Hill Angels⁹, Nolan Arenado⁹, Intersect Capital⁹, Dragoneer Investment Group⁹, 500 Startups⁹, Blackrock Holdings⁹, Brookfield Growth Partners⁹, Builders Vc⁹, Bullpen Capital⁹, Dcvc⁹, Foundersguild⁹, Green Meadow Ventures⁹, Hercules Capital⁹, Javelin⁹, Silver Lake Partners⁹, Two Sigma Ventures⁹, Atreides Management⁹, Brookfield Ventures⁹, Cvs Health Ventures⁹, Fifth Wall Ventures⁹, Homebrew Capital⁹, Hudson Bay Capital⁹, Silver Lake Waterman⁹, Future Solution Investments LLC⁴¹⁷.

What happened

Carbon Health was founded in 2015 by Caesar Djavaherian, Eren Bali, Greg Burrell, Pablo Stanley, and Tom Berry.⁹ The company described itself as a human-centered, tech-enabled healthcare company providing in-person primary care and telemedicine.⁹ Since 2018, Carbon Health acquired Direct Urgent Care, Steady Health, and Alertive Healthcare.⁹ In 2019, Carbon Health raised a $29.25 million Series B round.⁹ In 2020, Carbon Health raised a $20.1 million Series B-1 round and a $120.39 million Series C round.⁹

During the COVID-19 pandemic, Carbon Health expanded rapidly, leveraging pop-up testing sites and telehealth surges.¹⁰ By 2021, Carbon Health had expanded from a handful of clinics to over 80 locations.¹⁰ In July 2021, Carbon Health raised a $350 million Series D round led by The Blackstone Group at a $3.3 billion valuation.⁸⁹¹⁰ Leadership aimed to reach 1,500 clinics by 2025 to become the largest primary care provider in the U.S.¹⁰ By 2023, CVS Health had invested $100 million in Carbon Health, which had 125 clinics across 13 states and served over 1 million patients.¹⁰

Carbon Health lost more than $84 million in the first half of 2023, in addition to $129 million in the first half of 2022.¹⁴ On February 2, 2026, Carbon Health Technologies Inc. and twenty-eight affiliated debtors filed voluntary Chapter 11 petitions in the Southern District of Texas.^1239111618 The company listed between $100 million and $500 million in debt in its Chapter 11 petition.³ The bankruptcy filing was a lender-backed dual-track process involving a court-supervised sale and a restructuring plan.¹¹ The proximate trigger was a liquidity crunch after demand normalized post-pandemic and capital markets tightened.¹¹

A landlord dispute allegedly froze about $1.9 million of cash as the acute shock.¹¹ The company had a debt stack anchored by at least $77 million secured term debt, $36 million unsecured obligations, and $15 million of clinic-level secured facilities.¹¹ Revenues were reported around $166 million in 2024 and $154 million TTM to November 30, 2025.¹¹ The company obtained debtor-in-possession financing of up to $19.5 million to maintain operations.¹¹ The bankruptcy court approved bidding procedures for the sale of assets on February 10, 2026.¹⁶

The debtors filed their Combined Disclosure Statement and Plan of Reorganization on March 4, 2026.¹⁶ The meeting of creditors was held on March 12, 2026.¹⁶ The sale hearing and disclosure statement hearing were held on March 24, 2026.¹⁶ The general bar date for filing proofs of claim was April 2, 2026.¹⁶ On May 29, 2026, the Bankruptcy Court confirmed the Third Amended Plan of Reorganization.⁴¹⁶¹⁷

The confirmed plan included approximately $33 million in new capital and a $100 million debt-for-equity exchange.⁴¹⁷ The plan transferred majority ownership to a lender group led by Future Solution Investments LLC.⁴¹⁷ Future Solution Investments expressed its intention to transform Carbon Health into an AI-driven healthcare system.¹⁷ The plan established a $12 million trust for unsecured creditors, including $4.55 million for commercial creditors and $7.45 million for abuse claimants.¹⁷ The effective date of the Plan occurred on June 15, 2026.¹⁶

On June 26, 2026, the California Attorney General announced a settlement with Carbon Health and co-founder Eren Bali for violations of the corporate practice of medicine and other laws.¹⁵ The settlement required Carbon Health to restructure its corporate ownership to comply with California's ban on corporate practice of medicine.¹⁵ The settlement imposed $4.4 million in penalties on Carbon Health and $100,000 on Eren Bali.¹⁵ Carbon Health agreed to stop misleading advertising, update patient contracts, and fix billing practices.¹⁵ The settlement was subject to court approval in the Los Angeles County Superior Court.¹⁵

Legal outcomes

• settledThe California Attorney General alleged that Carbon Health violated California's prohibition on the corporate practice of medicine, engaged in false advertising, used unlawful consumer contracts, and improperly billed patients and insurance providers.¹⁵
• settledThe settlement required Carbon Health to restructure its corporate ownership and imposed $4.4 million in penalties on Carbon Health and $100,000 on co-founder Eren Bali.¹⁵

Where the founders are now

Eren Bali was a co-founder and former CEO of Carbon Health and was subject to a $100,000 penalty in the California Attorney General settlement.¹⁵

Lessons, as others put them

"Carbon Health’s bankruptcy is therefore less a punchline than a reminder that “digital transformation” in healthcare is not a theme — it is a balance sheet."Galen Growth¹¹

Sources

1. Carbon Health files for bankruptcy: 7 things to know, beckershospitalreview.com, Feb 3, 202
2. Primary care provider Carbon Health files for Chapter 11, fiercehealthcare.com, Feb 3, 202
3. Urgent-Care Provider Carbon Health Technologies Files Bankruptcy, news.bloomberglaw.com, 2026-02-02
4. Carbon Health Approved for AI-Focused Bankruptcy Turnaround Plan, news.bloomberglaw.com, 2026-05-29
8. Carbon Health banks another $350M to become 'largest ..., fiercehealthcare.com
9. Carbon Health IPO Timeline and Financing Details - Forge, forgeglobal.com
10. Strategic Insights: Carbon Health’s Boom, Bust, and Bankruptcy, haverin.substack.com, 7 months a
11. Carbon Health’s Chapter 11 Explained, Galen Growth, 2026-02-26
14. Health startup Carbon Health lost millions in 2023 ..., healthcare-brew.com, Nov 22, 20
15. Attorney General Bonta Announces First-of-Its-Kind Settlement with Carbon Health and its Co-Founder for Violating California’s Ban on Corporate Practice of Medicine and Other Healthcare and Consumer Protection Laws, State of California - Department of Justice - Office of the Attorney General, 2026-06-26
16. Kroll Restructuring Administration, restructuring.ra.kroll.com
17. Carbon Health Emerges From Bankruptcy With AI-Focused Turnaround Plan - PSZJ, PSZJ, 2026-05-30
18. Carbon Health files Chapter 11 bankruptcy, modernhealthcare.com, Feb 2, 202

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