Telehealth Continues On VC Funding Roll With Newest MDLive Round

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MDLive announces this week that it has closed a $50 million funding round provided exclusively by IT-focused private equity firm Bedford Funding. Bedford Funding is a PE firm with $1.4 billion in managed assets that targets mid-sized software companies, providing the capital and support needed to grow the business into a large, dominant market leader. The new round brings MDLive’s total funding level to $73.6 million, and caps an impressive run for telehealth vendors over the last year.

Just last week, rival telehealth vendor Doctor on Demand closed its own $50 million Series B funding round. Boston-based telehealth vendor American Well announced in December 2014 that it had raised an $80 million Series C round, and, in September of last year, Teladoc raised its own $50 million funding round. Now, MDLive has joined its peers in the telehealth space, raising its own massive round. As payers and employers continue to warm up to the idea of integrating telehealth solutions into the traditional care delivery system, these four controlling vendors in the industry are all raising funds and preparing to compete for market share and mindshare. While the race for funding is certainly on, the biggest newsmaker in this space recently is Teladoc, who recently announced intentions to go public and is expecting to raise north of $100 million in the process.

Congress has made slow progress on efforts to authorize reimbursement for broader telehealth access for Medicare and Medicaid patients. Private insurers are also in no rush to reimburse for the services, citing concerns that the added convenience will drive up utilization without reducing the overall cost of care. As a result, telehealth vendors have had to build businesses that offer healthcare services at a cost consumers are willing to cover entirely out of pocket, a market pressure that is relatively unique in healthcare. The result is a group of agile, technology-savvy mid-size businesses capable of delivering near real-time physician consultations that are able to diagnose and treat a growing number of non-urgent ailments.

Because of its convenience and propensity to keep costs low, telehealth vendors are finding fertile grounds selling services directly to employers. Keeping employees out of ERs and urgent care centers for routine conditions like flu, UTIs, and respiratory infections can save employers millions in healthcare costs. Add to this the fact that telehealth services are more convenient and require employees to take less sick days, and telehealth services begin to look like a promising supplementary tool for large employers.


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