Telehealth startups are finding new riches amidst the coronavirus crisis.
As patients across the U.S. seek out medical professionals via phone or other devices, six telehealth startups have closed funding rounds amounting to a combined $190 million in recent weeks. Experts believe the Covid-19 pandemic will change the health care industry long after the crisis ends--and it will extend beyond the telehealth companies themselves.
Seattle-based 98Point6 announced a $43 million Series D on April 3 with funding from Goldman Sachs and Costco co-founder James Sinegal, among others. The startup gives customers on-demand access to doctors via text chat or video at a cost of $20 for the first year and $120 for the second.
98Point6's app has seen a 200 percent usage increase since January, with one-third of all visits now Covid-19-related, according to the company. The startup founded in 2015 recently launched a Covid-19 assessment tool that helps patients quickly determine the best course of action using Centers for Disease Control guidelines.
Co-founder and CEO Robbie Cape says the company will use the funds to increase the number of physicians on its staff, which already has grown from 50 in early March to 160 today. The company has raised $129 million in total funding.
TytoCare, a New York City-based startup, on April 7 announced a $50 million Series C that was co-led by Insight Partners, Olive Tree Ventures, and Qualcomm Ventures. The company creates a $300 kit that includes internet-enabled tools including a stethoscope and otoscope, which is used for ear exams. A doctor can examine the patient remotely and diagnose ailments ranging from respiratory issues to ear infections to the flu.
Experts suggest that might soon become the norm.
"Health care will remain forever changed by the Covid-19 pandemic," says Arielle Trzcinski, senior analyst at Forrester who studies the health care industry. "The pandemic has removed significant barriers in past adoption--awareness, cost, and ability for patients to see providers on a reoccurring basis. We'll continue to see a dramatic shift toward a virtual-first delivery model."
Still, some expect the industry to cool off a bit once the current crisis ends.
"Looking out to the long term, we expect telehealth utilization to come back down but remain above pre-pandemic levels as providers expand their offerings and as patients embrace the technology," says Marc Albanese, senior director of research at market tracker CB Insights. He adds that more health care practices are using wearables and remote patient monitoring during the current crisis--a trend he expects to continue even after the crisis subsides. The global telehealth market is expected to grow from $41 billion in 2019 to $155 billion in 2027, according to a report published by market research firm Grand View Research earlier this month.
Other telehealth companies that have closed rounds during the pandemic include Los Angeles-based SteadyMD ($6 million), Singapore-based Doctor Anywhere ($27 million), and New York and Tel Aviv-based K Health ($48 million), which offers primary care via text. K Health co-founder Allon Bloch told VentureBeat in late February that the startup's app was adding 10,000 to 15,000 new users per day.
The impact of more patients turning to telehealth could be felt by other health care companies. Joe Kvedar, a dermatologist at Massachusetts General Hospital and president of the American Telemedicine Association, expects to see home testing kits and online medication delivery grow with the rise of telehealth, for instance.
"If you and I did a video visit," he says, "and I said you need a strep test, now you have to go visit a practice--so why did you bother doing it online? Anything that equips you, the consumer, with the tools you need to give me, the doctor, the right information to make a decision, those are the kinds of companies that we'll see proliferate."