The story: Seattle-based health benefits platform Accolade will offer upwards of $450 million to purchase PlushCare, the Bay Area-based company that provides virtual primary healthcare. This comes on top of the purchase of $460 million for another telemedicine company, 2nd. M.D., in March.
What is it about: The deal will add primary care to Accolade’s range of services that help its customers’ employees understand their health insurance plans and benefits. Accolade announced that it would expand the market it can address almost fivefold to more than $200 billion.
Accolade’s CEO Raj Singh said the company would merge its deep information on people who have been to each doctor they’ve visited over the past year, any medications they’ve taken, their benefits program for the company, and so on. — to create a tried and validated primary care service.
“Primary care is the most important element of the healthcare journey,” Singh said to GeekWire. “By adding primary care to what we do, we’re going to make costs go down even further and we’re going to make clinical outcomes get better.”
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This deal is a further move by Accolade to enter the market of consumers and is in addition to its 2nd. M.D. acquisition. Accolade continues to develop PlushCare’s direct-to-consumer business. Singh said that there are 160 million individuals within the U.S. that have healthcare that their employers do not provide.
“Those people are making individual choices,” he explained. “The idea of reaching them has always been a part of our strategy, and we think PlushCare only further enables that strategy.”
Background of PlushCare: Founded at the end of 2015 in 2015 by Ryan McQuaid and Dr. James Wantuck, PlushCare offers instant online appointments with primary care doctors who typically have 15 years of experience. It charges a copay of $99 per appointment. The 150-strong company has helped over 400,000 people so far and reported 35 million dollars in revenue last year. It has raised more than 30 million in private investment and an investment of $23 million in June.
The latest trends in TelemedicineInterest in virtual healthcare has been rising amid the epidemic, as people seek medical advice and do not go to a doctor’s office. The new regulations have also led more people to use telemedicine. The last period “changed the pace at which we might have been able to pursue a transaction like this,” Singh stated. The company, 98point6, a Seattle-based startup, raised $118 million for its rapidly growing virtual primary care services, as Amazon recently extended the scope of its own Telemedicine program.
This deal includes 40 million dollars of cash and $340m of Accolade Common Stock, and 70 million additional revenue milestones. It is expected that the deal will close in June.
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Accolade’s business The company that went public in July announced earnings in the range of $38.4 million (up 30 percent) in its third quarter fiscal year, and the loss was $16.4 million (down 9 percent). The company has 9 million members and 400 customers. The company’s staff is around 22,000.
Accolade’s shares Accolade has increased by over 50% since the company raised $220 million with a price of $1.2 billion in July. Accolade’s market capitalization is greater than $2.5 billion.
The Accolade, located in the cities of Seattle and Philadelphia, was founded in the year 2007 in 2007 by Michael Cline and Tom Spann. The business was run in 2015 by Singh, who previously founded the Travel expense software giant Concur and later sold its business to the SAP company for $8.3 billion in 2014. Concur’s founder Mike Hilton is the Accolade chief product, chief executive.