Telehealth company Doctor On Demand plans to combine with Grand Rounds to form a "first of its kind patient-centric integrated virtual care company," officials announced Tuesday.
Owen Tripp, CEO of Grand Rounds, will serve as the CEO of the expanded business. Both companies will continue to operate under their existing brands for the time being, officials said in a statement.
Doctor on Demand CEO Hill Ferguson will continue to run that side of the company and will join the board.
Terms of the transaction were not disclosed.
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The two venture-backed digital health companies have seen accelerating demand for virtual care services during the COVID-19 pandemic.
Grand Rounds launched in 2011 and got its start with virtually connecting patients with top-ranked medical experts for a second opinion. The company's services are now used by more than 6 million workers at companies such as Walmart, Home Depot, Salesforce, Travelers and other firms. Over the past year, Grand Rounds has increased the number of workers using its services by 55%.
San Francisco-based Doctor On Demand provides on-demand and scheduled visits with U.S.-licensed healthcare providers in both medical and behavioral health. The company currently covers more than 98 million lives. In July, the digital health firm reported that it had more than doubled its covered lives in the first half of 2020, propelling Doctor On Demand to 3 million virtual visits.
Doctor On Demand has raised $236 million to date, while Grand Rounds has banked $270 million from investors.
Grand Rounds was last valued at $1.34 billion in a round in mid-2020. Doctor on Demand was valued at about $820 million, according to SharesPost.
The merger is an all-stock combination without any fresh capital from outside investors. The companies claim to have hundreds of millions of dollars in combined annual revenue, CNBC's Ari Levy reported.
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“No one has done this before, combining navigation and virtual care delivery. We think it’s the future,” Tripp said in a statement. “People make unguided healthcare decisions every day, often with higher costs and worse outcomes. Now, with Doctor On Demand, we’ll offer them coordinated support on all fronts—physical, behavioral, financial, administrative—and we’ll do it for everything from acute issues to life-long health. This is truly complete care, and it’s what we all need.”
The deal comes amid a surge in digital health in 2020 which resulted in blockbuster deals, including Teladoc's $18.5 billion acquisition of Livongo.
Market analysts speculated last year that the Teladoc deal would increase acquisition activity in the digital and virtual care space as other telehealth companies look to broaden their capabilities.
The combination of Doctor on Demand and Grand Rounds will combine Grand Rounds’ data-driven clinical navigation platform and patient advocacy tools with Doctor On Demand’s virtual care offering. It will accelerate the adoption of virtual care in key areas including primary care, specialty care, chronic condition management, and behavioral health, the companies said.
“We’re building a next-generation virtual care company with a nationwide practice of diverse, dedicated providers and a multidisciplinary care team,” Ferguson said in a statement. “By fully integrating medical and behavioral healthcare with clinical navigation, we’re impacting healthcare where it actually happens—between a patient and their provider—and ensuring that experience is seamless, personalized, and can follow the patient wherever they go.”
The transaction is subject to regulatory approval and customary closing conditions and is expected to close in the first half of 2021.