Investments

Online Health Startup Ro Raises $200M On $1.5B Valuation

Online health startup Ro is valued at $1.5 billion after a new funding round, furthering its business of offering customers digital medical advice, CNBC reported.

The company, which began in 2017 as a way to sell hair loss supplements, has branched into a number of health apps that work to generate around $250 million per year, not counting the insurance, according to CNBC. It provides patients with a remote care team for each of its services.

The company, CNBC reported, has closed a recent financing round for $200 million, which was led by General Catalyst. The company, now sitting at $376 million total funding, is one of the more popular in the health tech sector.

Telehealth has skyrocketed in use during the pandemic. Patient visits for non-urgent care at NYU Langone shot up 4,345 percent between March 2 and April 14, PYMNTS reported.

The original Ro app was intended to alleviate men's stigma in talking to a doctor about hair loss issues. From there it branched into a women's product, Rory, focused more on birth control and other products, and a smoking cessation app called Zero, along with a new medication service, Ro Pharmacy, responsible for delivering 500 generic medications for around $5 each.

Ro isn't profitable yet, but it's growing at an expedited rate as compared to other such companies and has dodged some of the pitfalls that have ailed those companies, including having to make binding deals with insurers, CNBC reported. CEO Zachariah Reitano said he wants to be the first thought in people's heads when they need medical assistance.

"The more we are involved, the more we can impact the outcome," he said, according to CNBC.

Reitano said he thinks there's too much waste in the regular healthcare system and hopes to instead implement a model focused more on what patients need, with more transparent prices and health on demand. Some have thought of Ro as a company tailored toward millennials, but the average user age is 46, CNBC noted.

Ryan Krause, vice president at healthcare software company Epic Systems, told PYMNTS that the older ways of working in healthcare have long been inefficient, and the pandemic has only expedited the move toward digital health consultations.

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NEW PYMNTS DATA: HOW WE SHOP – SEPTEMBER 2020 

The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.

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