Online medical appointment booking company Zocdoc rapidly expanded its services during the COVID-19 pandemic, moving into virtual care and vaccine scheduling.
The New York City-based company is reporting strong growth, with annual revenue up by more than 35% before the pandemic and year-over-year growth in 2020 despite COVID-19’s disruption.
Boosted by $150 million in new growth financing, Zocdoc plans to accelerate its growth, deepen its investments in sales and marketing, and expand the digital health products available through its platform, the company said Thursday.
The financing round was led by Francisco Partners, a leading global investment firm that specializes in partnering with technology businesses.
The infusion of cash for Zocdoc comes as digital health funding has hit record levels propelled by the technology boom during the COVID-19 pandemic. Total corporate funding for digital health including venture capital, debt and public market financing reached $21.6 billion in 2020, up 103% compared to $10.6 billion in 2019, according to a year-end report by research firm Mercom Capital Group.
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In response to the spike in demand for virtual care in early 2020, Zocdoc added telehealth appointments to its platform. The move makes Zocdoc's digital health platform unique as it supports hybrid care: both physical and virtual care services, according to the company. Using Zocdoc, 10,000 providers have conducted nearly one million video visit appointments across 100 specialities.
The company also leveraged its core technology and 13 years of healthcare scheduling expertise to introduce a vaccine scheduler tool. This new free service is designed to help cities, states, and healthcare providers centralize and streamline vaccinations. The city of Chicago is using Zocdoc's tool to help get COVID-19 vaccines into the arms of its 2.7 million residents.
"Zocdoc is a remarkable company that is well-positioned to be consumers' one-stop-shop for all their healthcare needs, and we're proud to work with them to fund their next chapter," said Scott Eisenberg, head of credit and structured solutions at Francisco Partners in a statement.
“We've been incredibly impressed by the pace of Zocdoc's innovation and growth, as well as the company's invaluable contributions to improving America’s healthcare system - including supporting the needs of patients amid the COVID-19 pandemic," Eisenberg said.
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This past year also saw Zocdoc executives embroiled in a legal tussle with former CEO Cyrus Massoumi, also one of the co-founders. Massoumi—who served as CEO from 2007 to 2015—sued executives based on allegations of fraud and conspiracy to commit fraud and alleged they set up "an elaborate series of lies and deceptions" to oust him from the company.
A New York Supreme Court Judge threw out that lawsuit in January.
Zocdoc's recent rapid growth follows a five-year financial turnaround. Back in 2015, the company was on precarious financial footing. Revenue had flat-lined, growing by just one percent month-over-month by October 2015, according to Zocdoc executives in a blog post defending the company's against Massoumi's allegations.
RELATED: Zocdoc leadership move to dismiss co-founder's lawsuit, defend company's financial health
In 2018 and 2019, Zocdoc transitioned its pricing model from a flat subscription fee to one that charges providers for each new patient booking that Zocdoc’s platform facilitates. That change drew backlash from some doctors. But according to executives, that variable pricing model has helped to fuel the company's accelerating growth and profitability.
"The transition from a flat subscription model to the current, fee-per-booking model has enabled the company to lower the barrier to entry for providers, dramatically accelerating the growth of providers on its platform. The company has grown its healthcare provider network by 50 percent in the first states that transitioned to its new model, and other states are following a similar trajectory,' executives said in the press release.
Zocdoc is now profitable and on track to accelerate its pre-pandemic growth trajectory, executives said.
“Today, Zocdoc is the rarest type of private technology company: we are profitable with accelerating growth, and we are a business that does real good for the world," said Oliver Kharraz, M.D., Zocdoc founder and CEO in a statement. “The last year has demonstrated that Zocdoc is poised to have a transformative impact on healthcare in this country. From our rapid expansion into telehealth to our efforts in helping cities and health systems distribute vaccines, our work remains focused on giving power to the patient."