Alto Pharmacy snagged $200 million in a series E funding round led by SoftBank Vision Fund as the telehealth pharmacy startup looks to compete with retail giants.
The company launched in 2016 as a tech-enabled solution providing lower costs and free same-day delivery on prescriptions.
Alto has seen rapid growth in the last two years, expanding into 12 markets with over $700 million in annual revenue as healthcare rushed to respond to pandemic demand for virtual care solutions.
“People are waking up to the need for a better pharmacy solution than standing in line with sick people at a chain pharmacy,” said Matt Gamache-Asselin, co-founder of Alto, in a statement. “Our team is incredibly proud of the rave review we’ve earned from our customers by focusing on lower prices, expert care and free same-day delivery.”
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The San Francisco-based company reportedly considered a merger last year with a blank-check firm backed by billionaire Alec Gores, according to Bloomberg, but the deal was said to have fallen through in later months.
The company last raised $250 million in a series D round in February 2020, also led by SoftBank Vision Fund.
After the series D round, Reuters reported that the startup’s valuation had risen over $1 billion. Alto has raised over $550 million to date.
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Now operating in 12 major metropolitan areas across the country, including New York, Los Angeles, Denver, Dallas and Seattle, the company has more than doubled its revenue over the past year and expects to continue its upward growth trajectory.
The startup also inked a deal in December with the New York City Health Department as the exclusive provider of the city’s supply of COVID-19 anvitirals.
“We’ve been laser-focused for the last seven years on building solutions to the foundational issues plaguing the broken pharmacy industry. We’re so proud of the progress the team has made, quietly solidifying our position as the market leader in the rapidly growing digital pharmacy market,” said co-founder Jamie Karraker. “We’re thrilled this new funding will enable us to continue to define this evolving industry and to help even more patients get the care they deserve.”
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Beyond traditional retail pharmacies like CVS and Walgreens, who are also making moves in digital health, payers like UnitedHealth Group as well as startups like Capsule are expanding further into prescription delivery services.
Digital pharmacy Capsule raised $300 million last April in a round that boosted the startup to unicorn status.
UnitedHealth Group acquired home-delivery pharmacy DivvyDose in September 2020 for $300 million, following deals in years prior that saw Amazon and Walmart snapping up their own prescription delivery and medication management tools.