Major investors are bankrolling 98point6 with $118 million in a series E funding round, betting big on the continued demand for virtual care.
The Seattle-based startup developed an on-demand digital primary care service that delivers personalized consultation, diagnosis and treatment to patients. The text-based platform now has more than 240 commercial partnerships—accounting for 3 million members—with prominent brands including Banner|Aetna, Boeing, Circle K, Red Bull North America, Sam's Club, Teamsters Western Region and the New Jersey Health Care Fund.
The round was led by the Growth Fund of L Catterton, a large, consumer-focused private equity firm, and Activant Capital, the global growth equity investment firm highly focused on technologies disrupting legacy industries. Additional funding came from new and returning investors, including Goldman Sachs Merchant Banking Division.
The latest financing brings the company's total equity funding to $247 million across six funding rounds to date.
The funding will go toward research and development as well as expanding the company's medical practice as employers, health plans and retail partners look to add remote care to their offerings, according to 98point6 co-founder and CEO Robbie Cape.
98point6 also is focused on deepening its engagement with patients so it can build long-term relationships with them, he said.
As the COVID-19 pandemic has propelled the virtual care market, investors have a thirst for digital health companies.
98point6, which Cape founded in 2015, was not looking to raise more funds, but the latest financing round was entirely driven by inbound interest, Cape told Fierce Healthcare.
"We didn’t make a single external call. We were getting calls from a lot of different potential investors and we decided as a group to take those calls and remain open-minded to the possibility of raising additional money if we met the right investor that we wanted to partner with," he said.
Like many other virtual care companies, 98point6 has seen rapid growth during the pandemic. The company's membership has grown 274% since the end of 2019.
"It's interesting. We ended 2019 with about 300,000 members who had been deployed and with 824,000 members under contract. We expected that we would spend the first three to four months of the year scaling our membership and deploying those additional 500,000 members who had been contracted," Cape told Fierce Healthcare. "Right as the pandemic hit, we were faced with this onslaught of interest from healthcare plans and employers to scale close to 3 million members, beyond anything we could have imagined."
Cape credits his team and the company's robust technology platform for the ability to scale quickly to add a large number of new members.
"We did this successfully while keeping our Net Promoter Scores and quality of care incredibly high," he said.
The platform continues to see usage across age groups, and 90% of patients surveyed say they would use the service again, according to the company.
With more people choosing the affordability and convenience of on-demand care over higher cost options like urgent care or the emergency room—or delaying care altogether—the result is a greater return on investment for partners and healthier individuals in the long term, the company said.
Employer partners are experiencing, on average, eight times higher utilization of the 98point6 service than with their previous, traditional telemedicine solutions.
Through its mobile app, 98point6 leverages artificial intelligence and machine learning with the expertise of board-certified physicians to offer patients accessible and affordable primary care services. The service uses an AI chatbot to gather initial information from the patient before a doctor talks with the patient using a secure app.
"The increased interest in 98point6 put us in a unique position to serve many in a time of need. Our approach to care replaces the high cost and complexities of navigating the healthcare system while meeting the expectations and preferences of today's healthcare consumer," Cape said.
98point6's pricing model is attractive to patients as well as the ability for asynchronous, text-based communication, he said.
"Consumers are able to get on-demand primary care immediately, not with a 5-minute or 10-minute wait time. People want immediacy, and we're able to deliver," Cape said.
In September, the startup announced a deal with warehouse retailer Sam’s Club to offer subscriptions to its services. Through the collaboration, Sam’s Cub members will have exclusive offerings on 98point6’s telehealth virtual clinic via a text-based app following a yearlong pilot program.
Washington-based Premera Blue Cross announced in May that it's launching a new virtual primary care plan for employers designed in partnership with 98point6.
Michael Farello, managing partner at L Catterton, said 98point6 has differentiated itself as the leading digital primary care service in the market with 24/7 accessibility, the latest advancements in AI and automation and a diverse network of best-in-class physicians and personalized care plans.