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Folx Health raises $25 million for virtual clinical offerings and care for the LGBTQIA+ community

Folx Health is leveraging the explosion of virtual care services to offer greater access to healthcare focused on the needs of the LGBTQIA+ community, and has raised $25 million in new funding to help it grow.

It’s part of a revolution in care that’s targeting the needs of specific communities with access to physicians that understand those needs. And it’s all made possible by virtual interactions.

“We have a good sense of the nature of the need and the depth of the pain in the community,” said A.G. Breitenstein, the founder and chief executive of Folx Health. “As a non-binary lesbian and healthcare industry veteran, I have seen and experienced firsthand just how broken the current system is for the queer and trans community,”

Breitenstein said Folx would be using the cash to try and expand to all fifty states and increase the available products and services the healthcare company would look to make available to the queer and trans community.

“Whether it’s HRT, PrEP, sexual health or family creation, health care is essential for us to be who we are. It’s about time we build a platform for ourselves, so Queer and Trans people feel seen, heard, and celebrated,” she said in a statement. 

That was one reason why Bessemer Venture Partners leapt at the chance to lead the new financing round for Folx, according to Morgan Cheatham, an investor out of Bessemer’s New York office. The other was the size of the market.

“At a high level, 2% of the population identify as transgender,” said Cheatham. “At that math, when we looked at that, we were able to see a multibillion dollar market opportunity not just to provide [hormone replacement therapy], but to provide a healthcare destination for this community.”

Telescoping out to the opportunity to provide care to the LGBTQ community broadly, when that population represents about 10% to 20% of the population is a “deca-billion opportunity,” said Cheatham.

Breitenstein envisions offering family planning services, broad primary care, and sexual health and wellness care in addition to the hormone therapies that the company currently offers.

Folx joins a cohort of companies tackling health issues specifically for the LGBTQIA+ community which include the mental healthcare service, Violet; Included Health, an employee benefit service; and Plume, which focuses on care for the transgender community.

“We believed in the vision and the approach that she’s taking. She’s building a healthcare experience that is celebratory and dignified rather than one that pathologizing healthcare,” said Cheatham. 

For Bessemer and Cheatham, the investment speaks to broader opportunities to identify specific populations that need care tailored to their specific experience. That includes companies like Spora Health and Live Chair Health, which focus on providing healthcare specifically to people of color.

“Our individual identities whether it be socioeconomic status, race, gender… All of these things inform how we interface with the medical industrial complex,” Cheatham said.

Previous investors Define Ventures and Polaris Venture Partners will also participate in the round, which follows quickly on the heels of Folx’s launch from stealth in December 2020. 

For its patients, Folx Health is offering Hormone Replacement Therapy (HRT: testosterone or estrogen) with monthly plans starting at $59 a month. Folx Health will also begin releasing its sexual health and wellness offerings starting with Erectile Dysfunction (ED) treatment, soon to be followed by at-home STI Testing and Treatment, all customized for the specifics of Queer and Trans bodies, the company said. 

The services will include unlimited on-demand clinical support with at-home lab testing (for most plans) and home-delivered medications (costs may vary based on medication). The company’s services are now available in California, Connecticut, Delaware, Florida, Illinois, Massachusetts, North Carolina, New York, Texas, Virginia, and Washington.

The company is also launching a Folx Library, which will serve as a content hub and resource for Queer and Trans health, written by Folx clinicians and its broader community.

“Our partnership with Folx is a historical moment. It’s challenging to articulate how transformative Folx is for our community. We do so mindful of the brilliant and brave Queer and Trans people who fought for this moment to happen,” said Cheatham in a statement.

K Health expands into virtual childcare and raises $132 million at a $1.5 billion valuation

K Health, the virtual health care provider that uses machine learning to lower the cost of care by providing the bulk of the company’s health assessments, is launching new tools for childcare on the heels of raising cash that values the company at $1.5 billion.

The $132 million round raised in December will help the company expand and help pay for upgrades including an integration with most electronic health records — an integration that’s expected by the second quarter.

Throughout 2020 K Health has leveraged its position operating at the intersection of machine learning and consumer healthcare to raised $222 million in a single year.

This appetite from investors shows how large the opportunity is in consumer healthcare as companies look to use technology to make care more affordable.

For K Health, that means a monthly subscription to its service of $9 for unlimited access to the service and physicians on the platform, as well as a $19 per-month virtual mental health offering and a $19 fee for a one-time urgent care consultation.

To patients and investors the pitch is that the data K Health has managed to acquire through partnerships with organizations like the Israel health maintenance organization Maccabi Healthcare Services, which gave up decades of anonymized data on patients and health outcomes to train K Health’s predictive algorithm, can assess patients and aid the in diagnoses for the company’s doctors.

In theory that means the company’s service essentially acts as a virtual primary care physician, holding a wealth of patient information that, when taken together, might be able to spot underlying medical conditions faster or provide a more holistic view into patient care.

For pharmaceutical companies that could mean insights into population health that could be potentially profitable avenues for drug discovery.

In practice, patients get what they pay for.

The company’s mental health offering uses medical doctors who are not licensed psychiatrists to perform their evaluations and assessments, according to one provider on the platform, which can lead to interactions with untrained physicians that can cause more harm than good.

While company chief executive Allon Bloch is likely correct in his assessment that most services can be performed remotely (Bloch puts the figure at 90%), they should be performed remotely by professionals who have the necessary training.

There are limits to how much heavy lifting an algorithm or a generalist should do when it comes to healthcare, and it appears that K Health wants to push those limits.

“Drug referrals, acute issues, prevention issues, most of those can be done remotely,” Bloch said. “There’s an opportunity to do much better and potentially cheaper. 

K Health has already seen hundreds of thousands of patients either through its urgent care offering or its subscription service and generated tens of millions in revenue in 2020, according to Bloch. He declined to disclose how many patients used the urgent care service vs. the monthly subscription offering.

Telemedicine companies, like other companies providing services remotely, have thrived during the pandemic. Teladoc and Amwell, two of the early pioneers in virtual medicine have seen their share prices soar. Companies like Hims, that provide prescriptions for elective conditions that aren’t necessarily covered by health, special purpose acquisition companies at valuations of $1.6 billion.

Backing K Health are a group of investors led by GGV Capital and Valor Equity Partners. Kaiser Permanente’s pension fund and the investment offices of the owners of 3G Capital (the Brazilian investment firm that owns Burger King and Kraft Heinz), along with 14W, Max Ventures, Pico Partners, Marcy Venture Partners, Primary Venture Partners and BoxGroup, also participated in the round. 

Organizations working with the company include Maccabi Healthcare; the Mayo Clinic, which is investigating virtual care models with the company; and Anthem, which has white labeled the K Health service and provides it to some of the insurer’s millions of members.

Color raises $167 million funding at $1.5 billion valuation to expand ‘last mile’ of U.S. health infrastructure

Healthcare startup Color has raised a sizeable $167 million in Series D funding round, at a valuation of $1.5 billion post-money, the company announced today. This brings the total raised by Color to $278 million, with its latest large round intended to help it build on a record year of growth in 2020 with even more expansion to help put in place key health infrastructure systems across the U.S. – including those related to the “last mile” delivery of COVID-19 vaccines.

This latest investment into Color was led by General Catalyst, and by funds invested by T. Rowe Price, along with participation from Viking Global investors as well as others. Alongside the funding, the company is also bringing on a number of key senior executives, including Claire Vo (formerly of Optimizely) as Chief Product Officer, Emily Reuter (formerly of Uber, where she played a key role in its IPO process) as VP of Strategy and Operations, and Ashley Chandler (formerly of Stripe) as VP of Marketing.

“I think with the [COVID-19] crisis, it’s really shone the light on that lack of infrastructure. We saw it multiple times, with lab testing, with antigen testing, and now with vaccines,” Color CEO and co-founder Othman Laraki told me in an interview. “The model that we’ve been developing, that’s been working really well, and we feel like this is the opportunity to really scale it in a very major way. I think literally what’s happening is the building of the public health infrastructure for the country that’s starting off from a technology-first model, as opposed to, what ends up happening in a lot of industries, which is you start off taking your existing logistics and assets, and add technology to them.”

Color’s 2020 was a record year for the company, thanks in part to partnerships like the one it formed with the the City of San Francisco to establish testing for health care workers and residents. Laraki told me they did about five-fold their prior year’s business, and while the company is already set up to grow on its own sustainably based on the revenue it pulls in from customers, its ambitions and plans for 2021 and beyond made this the right time to help it accelerate further with the addition of more capital.

Laraki described Color’s approach as one that is both cost-efficient for the company, and also significant cost-saving for the healthcare providers it works with. He likens their approach to the shift that happened in retail with the move to online sales – and the contribution of one industry heavyweight in particular.

“At some point, you build Amazon – a technology-first stack that’s optimized around access and scale,” Laraki said. “I think that’s literally what we’re seeing now with healthcare. What’s kind of getting catalyzed right now is we’ve been realizing it applies to the COVID crisis, but also, we started actually working on that for prevention and I think actually it’s going to be applying to a huge surface area in healthcare; basically all the aspects of health that are not acute care where you don’t need to show up in hospital.”

Ultimately, Color’s approach is to re-think healthcare delivery in order to “make it accessible at the edge directly in people’s lives,” with “low transaction costs,” in a way that’s “scalable, [and] doesn’t use a lot of clinical resourcing,” Laraki says. He notes that this is actually very possible once you re-asses the problem without relying on a lot of accepted knowledge about the way things are done today, which result in a “heavy stack” vs. what you actually need to deliver the desired outcomes.

Laraki doesn’t think the problem is easy to solve – on the contrary, he acknowledges that 2021 is likely to be even more difficult and challenging than 2020 in many ways for the healthcare industry, and we’ve already begun to see evidence of that in the many challenges already faced by vaccine distribution and delivery in its initial rollout. But he’s optimistic about Color’s ability to help address those challenges, and to build out a ‘last mile’ delivery system for crucial care that expands accessibility, while also making sure things are done right.

“When you take a step back, doing COVID testing, or COVID vaccinations is actually those are not complex procedures at all – they’re extremely simple procedures,” he said. “What’s hard is doing them massive scale, and with a very low transaction cost to the individual and to the system. And that’s a very different tooling.”