DocGo, formerly called Ambulnz, hit the public market Monday after closing its merger with a blank check company.
DocGo merged with special purpose acquisition company Motion Acquisition Corp., and the SPAC merger implies an equity value of about $1.1 billion, according to the company's original announcement of the transaction in March.
The company, which provides mobile health and transportation services, raised $158 million in cash from the business combination and associated PIPE investment. The PIPE investment was led by Light Street Capital with participation by Moore Strategic Ventures.
The company began trading on Nasdaq Monday under the DCGO ticker.
DocGo will have $200 million on its balance sheet "when the smoke settles," CEO Stan Vashovsky said Monday, to expand its geographic footprint in mobile health services.
"We’re definitely open to M&A opportunities to help accelerate our growth. We plan to put this money to work to help fuel our growth and take more market share," Vashovsky said during the Credit Suisse Virtual Healthcare Conference.
Founded in 2015, DocGo offers what it calls "last-mile" healthcare services to patients in their homes or at work, such as testing, vaccinations, bloodwork, IV hydration, wound care, mobile imaging and EKGs, among other services.
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Together with its integrated Ambulnz medical transport services, DocGo says it bridges the gap between physical and virtual care.
DocGo has a national footprint across its joint ventures, which includes partnerships with Fresenius, the nation’s leading dialysis service provider, Jefferson Health and UCHealth. DocGo's clients for its mobile health services include HBO, the National Football League, GoodRx and RXR, a leading real estate owner and operator in the New York tri-state area.
The company operates in 28 states and plans to expand its mobile health business to 35 states in 2022, Vashovsky said.
At-home medical services is a fast-growing and competitive market with companies like Heal and Dispatch Health. Amazon also plays in this market with Amazon Care, which offers virtual care services as well as in-home care. Amazon is expanding that service, which can dispatch a medical professional to a patient’s home for services ranging from routine blood draws to listening to a patient’s lungs, to Dallas, Chicago, Philadelphia, Boston and Los Angeles next year.
Vashovsky said DocGo takes a differentiated approach to its mobile medical services business by building a medical field staff comprised of licensed/certified EMTs, paramedics and licensed practical nurses rather than nurse practitioners and physician assistants.
"We 'uptrain' people of lower skill but who are medically certified to do that work," he said. DocGo's approach is more cost-effective as physician assistants and nurse practitioners, who would be doing work that is below their level of training, come with higher labor costs and are also more difficult to recruit, especially now during a labor shortage, he said.
"That allows us to provide our services at a much more affordable cost factor," he said.
DocGo has 3,500 medical professionals in its healthcare field staff.
The company currently offers its services to government agencies, employers and health systems, but is launching a direct-to-consumer pilot program in an overseas market.
"We feel that market is wide open, within a certain price range, with no insurance and direct pay only," Vashovsky said. "Within an affordable price range, consumers will entertain paying for services right through an app. If that goes well, we'll bring it to the U.S."
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Expanding its at-home healthcare services to the direct-to-consumer market would triple DocGo's total addressable market, he said.
Vashovsky said a SPAC deal was "less expensive, easier and less time-consuming" than going public the more traditional IPO route.
"We had a business to run and we didn’t want to lose momentum," he said. "Many companies went public through SPACs, some good and some bad. With our performance, we’re definitely on that stronger end, within the top 2% to 3% that perform in the space today."
The company is projecting 2021 revenue to reach $260 million, up 175% compared to $94 million in 2020, Andre Oberholzer, chief financial officer, said during the virtual conference.
"Twenty percent of this growth is expected from our medical mobility business and the remaining 80% from mobile health services," he said.
The company project revenue to rise 11.5% year-over-year to $290 million in 2022.
For 2021, the company expects full-year EBITDA profitability and projects adjusted EBITDA of $44 million in 2022. The company believes that its U.S. total addressable market is worth $95 billion.
DocGo's mobile health services business is rapidly growing with revenue expected to hit $43 million in 2021, up from just $2 million in 2020, company executives said.
"Both businesses have plenty of room for growth. We’re in the infancy stage as we've been in business for five years," Vashovsky said.
He said the company was eyeing M&A opportunities in healthcare, particularly companies that currently outsource the mobile healthcare services that DocGo offers.
"The entire industry right now is short-staffed. It's very hard to get highly skilled medical professionals. Why have these highly skilled professionals do very basic things, when we can do it at a fraction of the cost. So far, we’re having phenomenal success with it," he said.