In three years Zachariah Reitano’s startup, Ro, has managed to hit a reported $1.5 billion valuation for its transformation from a company focused on treating erectile dysfunction to a telemedicine service for a range of elective and urgent care-focused treatments.
Through Rory for women’s health, Roman for men’s health and Zero for smoking cessation, Reitano and fellow co-founders Saman Rahmanian, and Rob Schutz, built a company that now treats 20 conditions, including sexual health, weight loss, dermatology, allergies and more, according to a statement from the company.
Ro also has a new pharmacy business, Ro Pharmacy, which is an online cash pay pharmacy offering more than 500 generic medications for just $5 per month per drug. And the company is getting into the weight loss business through a partnership with the private equity-backed healthcare company, Gelesis.
Ro’s also becoming a gateway into patient acquisition for primary care providers through Ribbon Health, and a test-case for the use of Pfizer’s Greenstone service, which provides certification that a generic drug is validated by one of the major pharmaceuticals.
The company’s $1.5 billion valuation is courtesy of a new $200 million investment from existing investors led by General Catalyst and including FirstMark Capital, Torch, SignalFire, TQ Ventures, Initialized Capital, 3L and BoxGroup. New first-time investor The Chernin Group also participated. In all, Ro has raised $376 million since it launched in 2017.
“This new investment will further our mission to become every patient’s first call. We’ll continue to invest in our vertically-integrated healthcare ecosystem, from our Collaborative Care Center to our national pharmacy operating system. This is just the beginning of Ro’s patient-centered healthcare platform.”
It’s all part of the company’s mission to provide a point of entry into the healthcare system independent of insurance qualifications.
“Telehealth companies like Ro are using technology to address long-standing healthcare disparities that have been exacerbated by COVID-19,” said Dr. Joycelyn Elders, MD, Ro Medical Advisor and Former U.S. Surgeon General. “By empowering providers to leverage their skills as efficiently and effectively as possible, Ro delivers affordable, high-quality care regardless of a patient’s location, insurance status, or physical access to physicians and pharmacies.”
Ro’s new financing is one of several forays by tech investors into reshaping the healthcare system at a time when patient care has been severely disrupted by attempts to mitigate the spread of COVID-19.
Digital medicine is assuming a central position in the healthcare world, with most consultations now occurring online. Reimbursement schemes for telemedicine have changed dramatically and investors see an opportunity to capitalize on these changes by aggressively backing the expansion plans of companies looking to bring digital healthcare directly to consumers.
That’s one of the reasons why Ro’s major competitor, Hims, is reported to be seeking access to public markets through its sale to a special purpose acquisition company for roughly $1 billion, according to Reuters.