Raj Singh, CEO of Accolade, speaks during the GeekWire Summit event in Seattle, Washington, on October 3, 2018.
David Ryder | Bloomberg | Getty Images
Accolade, a healthcare technology company that helps employees navigate their medical plans, is buying the 2nd.MD telemedicine start-up to bolster its ability to offer users subsequent opinions, CNBC reported exclusively.
Accolade is about to announce the acquisition of Houston-based innovation specialists, a parent company of 2nd.MD, for about $ 460 million, according to people familiar with the situation. The transaction will be half in cash and the rest in Accolade shares, part of which depends on revenue targets, and will close next month, people said, who did not want to identify themselves by talking of the agreement.
The move is said to nearly double Accolade’s airship market to about $ 46 billion, giving the company an expert medical opinion provider from a network of U.S. doctors. Founded in 2011, 2nd.MD automates the process of obtaining second opinions so that they occur in a matter of days by video or telephone, rather than taking weeks to schedule as usual.
“At a critical time in someone’s healthcare journey, when you make a decision on whether you want to have surgery or perform specific treatment, you often seek expert guidance,” Accolade CEO Raj Singh said this week. in a Zoom interview.
“2nd.MD will take your medical records and provide them to a network of doctors who specialize in these categories of diseases, and these doctors will do a video consultation to give you another opinion on what the next step is,” he said.
The start-up has 300 corporate clients with more than seven million employees and revenue of about $ 35 million last year, according to documents consulted by CNBC. Singh said he plans to incorporate 2nd.MD into his company’s products as well as offer it autonomously.
Just as the digitalization of finance has attracted billions of dollars in investment and increased mergers and acquisitions, the nascent field of healthcare technology has seen increasing interest during the coronavirus pandemic.. According to CB Insights, emerging digital health companies around the world attracted $ 24.1 billion in venture capital funding in 2020, 29% more than the previous year and reaching a record in the third quarter.
“How consumers access care and how they want to make decisions about care, all of that is changing, driven by a healthcare system that is under enormous stress,” Singh said. “Clearly you see more consolidation opportunities in this space.”
Accolade, which went public in July, has Comcast, CNBC’s parent company, as a major customer and investor. Seattle-based deal was advised by Goldman Sachs in the deal.