Virtual health provider, MDLIVE has closed a $50 million investment round led by Cigna and Health Care Services Corporation, which the company says it will use for its continued expansion.
The involvement of Cigna, a current partner, in the funding round was bound to raise more than a few curious questions, as the health insurance firm runs American Well, a telehealth firm, that is a competitor to MDLIVE, a virtual healthcare company.
Other major investors in this round of funding include Health Velocity Capital, Novo Holdings A/S, Industry Ventures, Sentara Healthcare, Sutter Health, Heritage Group, and Bedford Funding.
The investors believe the virtual health market could help in addressing cost and access challenges for healthcare in America and leading to the rapid growth of the telehealth industry, they said in a press release.
In a statement, HCSC said it was continuously scanning the healthcare market in search of innovative partners.
HCSC Vice President of Market Solutions, Tom Meier was quoted saying they looked forward to working with MDLIVE “to virtualize, automate and optimize much of the care our members receive via innovative solutions, such as Sophie, MDLive’s AI based personal digital health assistant,” which allows customers to ask questions and receive prompt replies, eliminating the need to wait for a live customer service representative.
Echoing Cordani’s sentiments, Tom Richards, Cigna’s global leader for strategy and business development, said: “Choice, personalization and affordability are critical to improving the U.S. healthcare system.”
Explaining their reason to invest in MDLIVE, Health Velocity Capital Managing Partner, Marty Felsenthal said “we believe there is a real scarcity of credible platforms from which customers can choose and believe MDLIVE to be the nation’s leading next-generation telehealth platforms. We look forward to leveraging our relationships to help MDLIVE continue its very strong growth trajectory”.
MDLIVE CEO, Richard Berner said they would use the funding to “help further accelerate our industry-leading consumer and clinician experience as well as accelerate the growth of the company”.
The approval of a federal budget with expanded access to virtual healthcare for patients on private Medicare Advantage plans has seen a growing interest in telehealth. Forbes reported the Medicare Advantage platform could be poised for growth and more health insurance firms could be drawn into investing as more seniors are drawn to privately managed Medicare benefits.
The first half of 2018 has been particularly lucrative for providers of digital health, with Medtech Drive reporting that $3.4 billion has been spent on 193 deals, continuing a trend that started in 2017, as initially reported by Rock Health.
The Rock Health report said telehealth received a fifth of the funding with 32 deals worth $714.6 million.
MDLIVE, which was founded in 2009, provides virtual healthcare for about 27 million Americans.
The Florida based company describes itself as “a pioneer in the digital delivery of high-quality, convenient, cost-efficient, virtual care for medical, dermatological, and behavioral health conditions”.
MDLIVE provides its patients with all day access to its network of doctors and therapists through secure online video and smartphone mobile applications.
To read about major funding in other areas of the healthcare space, check out this recent funding round in biotechnology.