Digital health startup Ro raises US$ 500M at US$ 5B valuation

NY-based digital healthcare startup Ro raised US$ 500 million in a Series D funding round on 22 March 2021.

Investors: The funding round was led by General Catalyst, FirstMark Capital and TQ Ventures, with participation from SignalFire, Torch and BoxGroup. New investors include Altimeter, Baupost and Dragoneer among others. Ro has raised over US$ 876 million to date.

Purpose of funding: The funds will be utilized by Ro to fuel the growth of its hybrid telehealth/in-home primary care platform and its pharmacy business. The company wants to optimize delivery and reduce costs for clients.

About Ro

Founded in 2017 by Rob Schutz, Saman Rahmanian and Zachariah Reitano, Ro aims to handle everything from online diagnosis to the delivery of medication, becoming a patient’s first call for all their healthcare needs. It runs three digital health clinics – Roman for men’s health, Rory for women’s health and Zero for fighting addiction. Ro’s business model focuses on providing primary care directly to the consumer, without the involvement of any payer or employer-funded and guided care programs. It aims to reduce costs through vertical integration.

Ro plans to have 10 pharmacies by the end of 2021 and 15 by the end of 2022, placed strategically around the country to ensure patients across the US can receive medicines within a day or two.

The startup believes that the pandemic has brought about significant changes in the healthcare sector that are in Ro’s favour. It has shed light on the inequities like geographic inequity, financial inequity and racial inequity. Everything is starting online, even if it is going to end in person, it will still start online.

What the Founders have to say: “To me, what I’m really excited about is being able to continue to invest in that infrastructure and add even more. We’ll continue to invest in telemedicine, we’ll continue to invest in our logistics and pharmacy, and continue to invest in in-home care, as well as the connection between the three, and then we’ll also invest in additional diagnostics, remote patient monitoring, so collecting and distributing devices to patients to go from reactive to proactive care.” — Zachariah Reitano, Co-founder of Ro.

What the investors have to say: “Putting the patient in charge and removing healthcare delivery from the byzantine health insurance structure means they have different expectations. When consumers are spending out of their own pocket, they are sort of treating it just like any other e-commerce purchase. They care about the consumer experience. They care about value.” — Hemant Taneja, managing partner at General Catalyst.

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