The messaging-based primary care provider 98point6 has raised $50 million in its latest round of led by the Merchant Banking Division of Goldman Sachs.
It seems that Jo Natauri, the global head of healthcare investing in Goldman Sachs’ investment banking group is a fan of the concept that millennials would rather text than video chat.
One millennial’s perspective:
I don’t want to video chat my doctor. I want to text them and share photos. Or see them in person. But video feels weird. Still haven’t put my finger on why…
— Christina Farr (@chrissyfarr) October 26, 2018
The Seattle-based company had previously raised over $36 million from investors including YIS Capital founder Jeffrey Greenstein, according to a filing with the Securities and Exchange Commission.
98point6 said in a statement that it will use the funding to expand its products and services and recruit new doctors to the platform.
The company’s services are currently available in 37 states and Washington and will be in all 50 states by the beginning of 2019.
According to the company, the U.S. will need 52,000 physicians to meet patient demand by 2025, and given the shortage of doctors that already exists in the U.S., 98point6 is touting its messaging service as a viable alternative.
“Primary care is the main entry point for individuals into an increasingly complex healthcare system, making it the ideal setting for providing patient education, encouraging preventive care and controlling downstream costs,” said Natauri, in a statement.
The investment is of a piece with Natauri’s broader thesis that healthcare investment activity broadly is about controlling the engagement with patients earlier and more upstream in the process. It’s driving big healthcare acquisitions like the whopping $69 billion that Aetna paid to acquire CVS.
LISTEN: $GS' Jo Natauri on the major changes shaping #healthcare, including what’s driving M&A activity: https://t.co/td4rBW18su pic.twitter.com/KM1osYdkIf
— Goldman Sachs (@GoldmanSachs) July 2, 2018
The investment is an interesting one for Goldman Sachs’ investment group, because 98point6 looks, in many ways, like a direct competitor to a company in the Goldman Sachs Investment Partners portfolio, DoctorOnDemand.
Earlier this year that company raised a $74 million round and was touted (by me) as a strong contender to reshape role of telemedicine in primary care service.
Video consultation service Doctor on Demand raised $74 million so everyone can see a doctor anytime
In addition to these companies looking to supplant the traditional doctor’s office visit with their own practices. Other companies are looking to give doctors their own way to consult with patient via text and video — selling secure communications tools that doctors can offer to their patients.
Like other startups tackling healthcare problems in the 21st century, 98point6 depends on a combination of algorithmically defined care methodologies and natural language processing alongside consultations with board certified physicians to help diagnose patients and come up with treatment regimes.
If a patient does require a specialist, a physician can make a referral.
So far, the company is selling its service through a mix of commercial contracts with employers and their healthcare providers and direct to consumer marketing. For users paying out of pocket, the plan costs $20 for the first year and $120 for each year thereafter.
The bulk of the company’s publicly disclosed patients — which is expected to reach 100,000 members by the end of the year — come through contracts with customers like Seattle Children’s Hospital, Aegis Living, and Zones Inc., according to a statement.
“We set out to make primary care accessible and affordable for everyone, to address a crisis in America that has led to nearly one-fifth of the population not having a relationship with primary care,” said Robbie Cape, CEO and co-founder of 98point6, in a statement. “
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