Dive Brief:
- Virtual care operator American Well is well on its way to raising $315 million, according to an SEC filing. As of June 28, the company had already fetched $291 million.
- The securities being offered include equity and Series C convertible preferred and common stock.
- A major backer is multinational technology powerhouse Philips, which partnered with American Well in January to embed telehealth services in a range of products.
Dive Insight:
Enthusiasm for telehealth has been steadily mounting with major health systems like Mayo Clinic, Intermountain Healthcare and Kaiser Permanente investing heavily in the technology.
Investors are also betting big on the modality. During the first half of 2018, telemedicine landed 21% of total digital health funding with 32 deals worth $714.6 million, a new Rock Health report shows. Behavioral health was also a big winner, with 16 deals across 15 companies valued at $273 million. More than half of those startups include virtual or on-demand services, the report notes.
Still, telehealth has struggled at times to show clear ROI, and adoption has been slowed by lack of consumer awareness and regulatory barriers that prevent doctors from providing virtual care across state lines in some areas.
Telehealth was vital to delivering care during last year’s Hurricanes Harvey and Irma and again during the last winter’s flu outbreak. But not everyone is convinced telehealth is headed for large-scale care delivery. “I remember when Segway came out and there were all these articles about how it was going to help people get around, and ultimately it found its niche in tourism and cities,” Jay Parkinson, founder and CEO of virtual primary care company Sherpaa, told Healthcare Dive earlier this year. “It feels like that’s what telehealth is … [I]t’s going to revolutionize a niche.”
Boston-based American Well continues to forge new partnerships and roll out products. In May, the company signed a definitive agreement to acquire acute care telehealth vendor Avizia for an undisclosed amount. The deal — set to close in the second quarter — would create a “single, end-to-end offering for telehealth customers," American Well CEO Ido Schoenberg said at the time.
