It’s Thursday! And September is here.
Note on programming: Starting tomorrow, each Friday’s newsletter will be a roundup of the week’s top news, providing easy access to all the scoop, deals and analysis we’ve covered since Monday in one place.
1 big thing: 98point6 for bringing virtual care to healthcare systems
98point6, a text-based virtual care startup, has raised over $20 million more from insiders L Catterton and Activant Capital.
Why is this important: The investment will enable Seattle-based 98point6 to bring – through technology licensing agreements – its virtual care platform to healthcare systems and their emergency departments, whose models are ripe for innovation .
- “Healthcare systems have a new set of competitive entrants into EP-supported urgent care providers,” 98point6 President Jay Burrell told Sarah. “With our platform, they have a new model for patient engagement.”
What they say : The model is win-win. By licensing its technology, 98point6 gains higher-margin deal flow, Burrell says.
- “As we focus on a path to [sustainable] profitability, it’s a big step forward to achieve that.”
Details: 98point6’s first licensing agreement is with MultiCare Health System, which will use its technology through its Indigo Health urgent care division.
- MultiCare, with 11 hospitals, is the largest health care system in Washington state, while Indigo includes 35 outpatient clinics. This year, it added primary care services.
- 98point6 is in talks with another half-dozen regional health systems and aims to secure licensing deals with a portfolio of organizations by the end of the year, Burrell said.
- When needed, 98point6 can also leverage its own network of clinicians to provide support to health systems.
How it works: Offered via a smartphone app, 98point6’s core business is text-based primary care that includes on-demand consultation, diagnosis and treatment.
- Its customer base includes several hundred self-insured employers who access 98point6 by subscription.
- Users access the application at low or no cost per visit.
- Photo, audio, and video capabilities are available as needed, and virtual doctors can also direct for in-person care.
- The startup expanded beyond primary care and into behavioral health last year.
And after: Burrell says the startup is starting to think about chronic care entry points and risky healthcare models.
By the numbers: The investment brings 98point6 total funding to date to $267 million, nearly two years after raising $118 million in Series E funding.
- The October 2020 funding was led by L Catterton (through its growth fund) and Activant, joined by Goldman Sachs Merchant Banking Division, Optus Capital Partners, MUUS Asset Management, Westway Capital, Summer VC, ACE & Company and Cole Rotman .
Catch up fast: 98point6 laid off 10% of its workforce in July, according to Geekwire, with the job cuts including the creative team and many members of the marketing team.
- Burrell calls the layoffs “very painful” but says that amid a focus on profitability, 98point6 remains in growth mode by continuing to hire on the tech side and bolster its clinical staff.
- Co-founder and CEO Robbie Cape abruptly left 98point6 in September 2021, after which Chairman Jeff Greenstein took office, Geekwire reported.