Direct-to-consumer virtual care and mail-order prescription startup Ro is adding to its already impressive fundraising haul with a fresh $500 million investment headed by prior backers General Catalyst, FirstMark Capital and TQ Ventures, the company announced this morning.
SignalFire Torch and BoxGroup also returned to participate in the Series D round, as did new investors Altimeter, Baupost, Dragoneer, Shawspring, Radcliff and 776.
This raise brings Ro's lifetime fundraising to $876 million, according to the company. It also places the company at a valuation of $5 billion, CEO Zachariah Reitano told Bloomberg.
WHAT IT DOES
The New York-based company got its start in 2017 as Roman, with an initial focus on erectile dysfunction and other men's health and wellness issues often accompanied by stigma.
It wasn't too long before the startup began expanding to additional areas like smoking cessation, weight management, pharmacy distribution services, women's health, prescription treatments for allergy and dermatology, and end-to-end virtual primary care.
Just since its last major raise in July 2020 the company announced the acquisition of Workpath – a move that enabled the company to complement its remote services with on-demand in-home care services.
It also recently partnered with New York State's Department of Public Health to operate a COVID-19 vaccination hotline and help coordinate vaccine house calls for seniors, as well as in-home diagnostic testing.
"The current healthcare system is working beautifully for insurance companies, but terribly for patients; to pretend otherwise is absolutely ridiculous," Reitano said in a statement. "It’s time to give patients power.
"Ro is the only company to combine a nationwide telemedicine, pharmacy distribution and in-home care network. Through this vertically integrated platform we're making high-quality care available when and where patients need it, with no insurance required, so patients are the ones in control.
"We’re powering a patient revolution, and we’re just getting started.”
WHAT IT'S FOR
Ro said in the announcement that these funds would further build out the company's full-stack primary care platform. Specifically, it described plans to:
- Expand its pharmacy distribution network.
- Improve the Ro Collaborative Care Center, its proprietary EHR system.
- Introduce remote patient monitoring with integrated devices.
- Add other capabilities or treatment areas into its repertoire.
The new funding round comes after reports in January that the virtual health company was weighing a potential special purpose acquisition company (SPAC) merger – plans that would ostensibly have been put on the back burner or discarded in favor of the $500 million raise.
That SPAC approach to the public market has had its highs and its lows for Ro's chief competitor in the D2C virtual care space, Hims & Hers. In its first quarterly earnings call since closing its merger the company highlighted growing revenues and big-ticket investments that it said will continue fueling growth for the coming years.
Investors, however, were less than thrilled with its near-term projections, which triggered a dip in its trading price and, as of now, a market cap of about $2.4 billion.
The larger virtual care and telehealth market has seen no shortage of action since the start of the pandemic.
Teladoc Health, for instance, highlighted a full year of major growth during its most recent earnings call. Doctor on Demand and MDLive both announced plans to merge their platforms with Grand Rounds and Cigna's Evernorth, respectively, in recent weeks.
Meanwhile, Amazon finally went public with plans to expand its app-based virtual care services across the U.S.