Teladoc, a large and fast-growing video visits company based in Dallas, Texas, has taken the first step toward filing an initial public offering, according to a statement from the company. Teladoc filed a confidential S-1 form with the SEC and expressed an intention to file an IPO following the SEC's review process.
The Deal had the scoop about a month ago from three investment bankers, one of whom expected a valuation around $1 billion for the company. According to one of the others, Deutsche Bank and JP Morgan Chase will underwrite the IPO.
Teladoc has raised at least $96.6 million since it was founded in 2002, most recently in a $50 million round last fall from Jafco Ventures, FLAG Capital Management, Greenspring Associates, Mellon, and QuestMark Partners. As of that filing, the company had revenues between $25 million and $100 million.
At an event in Boston last fall, Teladoc CEO Jason Gorevic gushed about the company's recent growth.
“We’ve seen really phenomenal growth,” he said. “Over 100 percent growth this year. Yesterday, we did 1,200 telemedicine visits, with an average response time of 11 minutes. We’ll do more than a half a million telemedicine visits next year. The data is pretty clear there’s this massive wave building and I think we’re really just at the beginning of that wave.”
Some of the company’s customers include Blue Shield of California, Cash America, Gallup, Highmark, Ignite Restaurants, Rent-A-Center, and T-Mobile. They also work with health insurers including LifeWise Health Plan of Oregon and Oscar.
Last year, Teladoc partnered with price transparency company Castlight Health. The deal made it easier for employees whose companies are customers of both companies by integrating Teladoc’s virtual visits services into Castlight’s platform. The Teladoc deal was part of the Castlight Connect program, which includes more than 30 integrations with telehealth companies, on-site clinic providers, expert opinion services, and wellness offerings.
Also last year Teladoc snapped up competitor AmeriDoc and in 2013, Teladoc acquired Miami Beach, Florida-based Consult A Doctor. At the time of the Consult A Doctor deal, Teladoc said the acquisition would allow small- and medium-sized companies access to Teladoc’s patient-physician consult services.
At the event last fall, Gorevic also talked about two recent ROI studies Teladoc has been involved in. In one, the Rand Corporation evaluated data from 375,000 CalPERS members whose health plan included remote visits through Teladoc. They found that there was no evidence of misdiagnosis and that people who visited a doctor in-person were twice as likely to need a follow-up visit as people who used video visits. People who went to the emergency room were three times as likely to need follow-up care.
“It turns out that not only is it more efficient care, but in fact everything points to it being highly effective and very likely even more effective in many cases than in-person care for the same type of thing,” Gorevic said.
Teladoc is also in the process of publishing a large matched pair study by a Harvard researcher, Gorevic said.
“He found 25 percent of the people who used our services would have ended up in the emergency room,” he said. “So that’s a massive impact. And the second thing he found — exactly what the RAND study did — there’s a much higher propensity for follow-up care at a traditional site as a telemedicine video. He found the savings was about $700 every time someone uses the Teladoc service. And that’s way more than we expected it to be.”