American Well Raises $290 million To Bring Virtual Doctors To Patients’ Homes

Morning Report: Telehealth startup American Well has raised $290 million from Philips and Allianz. 

Boston-based startup American Well just raised over $290 million in a corporate round to scale up its virtual doctor business, per an SEC filing dated June 29. The company aimed to raise over $300 million in the transaction.

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The round was led by Philips and Allianz X. The latter is the investment unit of Germany-based insurance company Allianz Group. With American Well’s new $290 million, the deal is one of the largest venture investment rounds in the Boston area in recent years.

Founded in 2006, American Well is a telehealth platform that connects users with doctors instantly via live video. Prior to this round of funding, American Well raised an $81 million Series C in 2014, followed by a modest $5 million venture round in August 2015.

In April of this year, American Well announced in a press release that it “has entered into a definitive agreement to acquire Avizia.”  Avizia is a Virginia based telehealth startup that specializes in developing telecommunication platform for acute clinical care such as stroke, pediatric, and urgent care.

The telehealth market has heated up in recent years. According to Crunchbase News research, over 200 startups are active in the telemedicine business, and over $431 million in funding has been invested in U.S. telehealth startups this year. American Well leads the market with its $441 million total funding since its founding.

Despite the hype surrounding telehealth technology, a study by Avizia shows that only 18% of healthcare providers and patients have used telehealth services, while 8 out of 10 patients are not aware of how to access telehealth or whether their insurers cover it. However, the positivity from venture capitalists certainly strikes a favorable note for remote healthcare through telecommunication technology.

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Illustration Credit: Li Anne Dias