Amwell files to go public with $100M boost from Google

man laying on couch talks with a female doctor using a telehealth app on his smartphone
Borthers Roy and Ido Schoenberg launched Amwell, formerly American Well, in 2006. Amwell works with 55 health plans, which support over 36,000 employers, as well as 150 of the nation’s largest health systems, encompassing more than 2,000 hospitals. (American Well)

Telehealth company Amwell is going public with $100 million in backing from Google.

The company filed its preliminary prospectus with the Securities and Exchange Commission (SEC) on Monday. The company confidentially filed for an IPO in June, according to a report from CNBC reporters Christina Farr and Ari Levy.

Morgan Stanley, Goldman Sachs and Piper Sandler are acting as lead joint book-running managers for the offering. UBS, Credit Suisse, Cowen and Berenberg are acting as bookrunners for the IPO.

The number of shares to be offered and the price range for the proposed offering have not yet been determined. Amwell will be listed on the New York Stock Exchange under the ticket symbol "AMWL."

Google is investing $100 million into the telehealth company as part of a stock purchase agreement, according to the S-1 filing. Amwell will issue the tech giant $100 million of its Class C common stock, with the price per share to be equal to the purchase price to the public in the IPO. 

The telehealth company also announced Monday a strategic parnership with Google Cloud. As part of that deal, Amwell selected Google Cloud as its preferred global cloud platform partner, and will migrate its video performance capabilities onto Google's cloud platform for both new and existing customers.

There has been surging demand for telehealth during the COVID-19 pandemic.

Amwell's IPO comes after telehealth competitor Teladoc's blockbuster deal to buy Livongo for $18.5 billion.

RELATED: Amwell lands close to $200M in funding to keep up with demand for telehealth

During the second quarter of 2020, Amwell saw average monthly visit volumes and average monthly active providers delivering healthcare on its platform increase over 300% and 400%, respectively, compared to the first quarter of 2020, the company reported in its SEC filing.

During the second quarter of 2020, 2.2 million telehealth visits were performed on Amwell's platform with 77% of those visits performed by health systems' own providers.

That compares 700,000 telehealth visits in the first quarter of 2020, with only half of those visits performed by health system providers.

"We view this rapid embrace of healthcare delivery by a patient’s own doctor as evidence that doctors are increasingly using telemedicine to reach their patient population, patients are amenable to receiving care by their doctor virtually, and overall, providers and patients within the Amwell ecosystem are increasingly receiving care virtually on the Amwell platform," the company said in its filing.

Visits in April 2020 were as high as over 40,000 per day, versus approximately 2,900 visits per day in April 2019, the company said. During this surge, the company reported that average wait times remained under 10 minutes.

"While the COVID-19 crisis is a unique event, we believe that utilization of the Amwell platform will remain at higher levels after the crisis versus levels previously forecasted before the crisis," the company said.

Amwell, formerly known as American Well, raised $194 million in May to help it keep up with skyrocketing demand for virtual care services.

The company, which launched in 2006, works with 55 health plans, which support over 36,000 employers and collectively represent more than 80 million covered lives, as well as 150 of the nation’s largest health systems, encompassing more than 2,000 hospitals, according to its S-1 filing.

To date, Amwell says it has powered over 5.6 million telehealth visits for its clients, including more than 2.9 million in the six months ended June 30, 2020.

Amwell reported revenue of $114 million in 2018 and that grew 31% to $149 million in 2019. However, the company has significant losses reporting net losses of $52 million in 2018 and that widened to $88 million in 2019.

According to the S-1 filing, the company plans to expand into adjacent markets such as Medicare and Medicaid, government clients, clinical partnerships such as its existing collaboration with Cleveland Clinic and international markets.

In the first half of 2019, Amwell's revenue was $69 million and that jumped 77% to $122 million in the first half of 2020. During the first half of 2020, Amwell reported net losses of $113 million, up from a loss of $42 million in the same period last year.

The company also operates its Amwell Medical Group, a nationwide clinical network of over 5,000 multi-disciplinary providers covering 50 states with 24/7 coverage, it said.

RELATED: Amwell CEOs on the telehealth boom and why it will 'democratize' healthcare

Healthcare today faces many challenges, the company said in its filing, as choice and access can be limited, care delivery is fragmented and inefficient, and costs continue to rise and shift to consumers while health outcomes have not improved.

There are significant risks to Amwell's business, including weak growth and increased volatility in the telehealth market and it's history of losses, the company said in its SEC filing.

"The healthcare industry is evolving to meet these challenges with innovative care models and new regulatory frameworks to promote more effective outcomes. As healthcare’s key stakeholders demand innovative technology solutions that streamline care delivery, lower costs, expand access and improve outcomes, we believe there is significant opportunity for transformation," Amwell said.

Amwell estimates that the subscription revenue market opportunity for health plan customers to be $8.7 billion while the market for health system customers could reach $3.7 billion, the company said in its S-1 filing.

The company also projects the urgent care and telepsychiatry visit revenue market opportunity to be approximately $18.2 billion and $3.9 billion, respectively.

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