Boston-based telehealth company Amwell plans to go public, including a $100 million investment from Google. The company filed preliminary paperwork with the Securities and Exchange Commission to be listed on the New York Stock Exchange under the symbol AMWL.
Amwell plans to raise $100 million in the offering — likely a placeholder number, as it hasn’t yet set a price range for its shares. It’s one of several planned telehealth deals as companies have seen user numbers soar to record highs during the Covid-19 pandemic: Another telehealth startup, MDLive, is reportedly planning an IPO for 2021, and earlier this month, Teladoc announced plans to acquire digital health startup Livongo in a deal that would value it at $18.5 billion.
The latter could serve as the basis for a bigger telehealth play, as companies look to bring more primary care and chronic care services into one platform.
Another platform play
Amwell might have a similar platform idea in mind. The company struck a multiyear partnership with Google, which includes the tech giant buying $100 million of Amwell’s Class C common stock in a private placement.
In exchange, Amwell plans to migrate its telehealth video traffic to Google Cloud by January. The companies will also work together on a strategic technology collaboration.
“This is an opportunity to shape telehealth across the entire continuum of care,” Aashima Gupta, Google Cloud’s director of healthcare strategy and solutions, said in a phone interview. “That’s where platform thinking is enormously important in healthcare. … That’s where investments are being made and strategic deliberations are happening. We want to be right there with our customers helping with that. That’s a huge reason why we funded this and prioritized this.”
What might that look like? In a blog post, Gupta shared the image of a virtual waiting room, where a chatbot could gather information from patients about their symptoms in their preferred language, that would then be sent to their physician. During the visit, AI could be used for rote tasks, such as patient intake forms or collecting insurance information. Analytics tools could also be used to help patients with chronic conditions who use remote monitoring devices to manage their health.
Gupta said that Google had always been interested in telehealth, but the pandemic created a new sense of urgency. In recent months, she said Google Cloud got several inquiries from healthcare providers and telehealth companies who were looking to modernize their infrastructure or for tools to make the process smoother.
She emphasized that there was no connection between the Amwell partnership and Google’s advertising and search business, and that patient data could only be used for providing health services.
Growing business but a net loss
Currently, Amwell’s biggest customer is Anthem, which accounted for roughly 23% of its revenue last year. The company brought in $148.86 million in revenue last year, and $122.28 million in the first half of 2020, up 77% from last year.
But the company also faces a widening net loss: Last year, it reported an $88.36 million net loss. For the first half of 2020, that grew to $113.44 million.
Overall, average monthly visit volumes were up 300% during the most recent quarter, and the number of providers using its platform has also ballooned.
Amwell said it plans to use the funds to build out its technology platform, grow its sales team, to reduce support costs using automation, and for potential acquisitions.
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