Accolade PlushCare 450M Soper

The story: Seattle-based health benefits platform Accolade will offer upwards of $450 million to buy PlushCare PlushCare, a Bay Area-based business that offers virtual primary healthcare. This is in line with the purchase of $460 million for another company offering telemedicine, 2nd. M.D., in March.

What’s the significance of it: The deal will add primary care to Accolade’s array of services that help its clients’ employees understand their health insurance plans and benefits. Accolade announced that it would expand its market reach by five times to over $200 billion.

Accolade’s CEO Raj Singh said the company would integrate its extensive information on people who have been to every doctor they’ve seen in the last year; any medication they’ve used; the benefits program for the company; etc. — to create a tried and validated primary care service.

“Primary care is the most important element of the healthcare journey,” Singh stated 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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The acquisition is also a move by Accolade to enter the market of consumers as well as Accolade’s 2nd. M.D. acquisition. Accolade continues to develop PlushCare’s direct-to-consumer business. Singh pointed out that more than 160 million people are living in the U.S. have healthcare not covered by their employers.

“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 on May 15, 2015, 2015 by Ryan McQuaid and Dr. James Wantuck, PlushCare offers online appointments on the same day with primary care doctors who are averaging 15 years of experience. It charges a copay of $99 per appointment. The 150-strong company has helped around 400,000 clients so far and reported $35 million in revenue last year. The company has raised more than $30 million from private investors and announced the $23 million round in June.

Trends in Telemedicine: Interest in virtual health care is increasing with the epidemic as people search for medical advice without going to a doctor’s office. New regulations also have 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. Another Seattle-based company, 98point6, raised 118 million dollars in October for its rapidly expanding virtual primary care services, as Amazon recently added its own online medical program.

This deal includes 40 million dollars as cash in addition to $340 million of Accolade Common Stock and 70 million more in revenue milestones. It is expected that the deal will close in June.

Accolade’s business The company was listed on the stock exchange on Jul. 1 and disclosed revenues of $38.4 million (up 30 percent) for the third quarter fiscal year and an operating loss of $16.4 million (down by 9%). The company currently serves more than nine million members and 400 customers. The number of employees is about 22,000.

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Accolade’s shares have increased by over 50% since the company raised $220 million at the price of $1.2 billion back in July. Accolade’s market capitalization is greater than $2.5 billion.

The accolade, located within the cities of Seattle and Philadelphia, was founded in the year 2007 in 2007 by Michael Cline and Tom Spann. The business is now run from 2015 onwards by Singh, who had previously founded the Travel expense software giant Concur, which was was sold its business to the SAP company for $8.3 billion in 2014. Concur’s Co-founder Mike Hilton is the Accolade chief product officer.

Daniel Downey
Daniel Downey
Daniel was born in Auckland and raised in Calgary, except for the time when he moved back to Quebec and attended high school there. He studied Physics and Science at the University of Auckland. He began writing after obsessing over books.

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