there was a time When this column was over a never ending round of IPO coverage. Then the unicorn liquidity cycle began and since then it has been a long period of public offerings. This morning is no exception.
Doximity filed to go public earlier today. You might not have heard of the company because it exists in the marginally ambiguous world of telehealth. But it is a venture-backed startup that has raised more than $ 80 million from investors such as Emergence, Interwest Partners, Morgenthaler Ventures and Threshold, according to Crunchbase Data.
Notably, Doximiti has not raised funds since 2014, a year in which it attracted less than $ 82 million, at a valuation of $ 355 million, per Pitchbook data. How did it manage to not grow for so long? By generating lots of cash and profit over the years. Health tech communication, it turns out, can be a lucrative endeavor.
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Doximity is a social network that allows doctors to talk to each other while adhering to HIPAA, a federal law that promotes medical confidentiality. The network, originally defined as LinkedIn for medical professionals, would give doctors a Rolodex for specialists, a newsfeed for health updates, a communication tool to talk to patients, and a job search tool is.
In 2017, Doximity claimed that it reached 70% of all US doctors, more than 800,000 licensed professionals.
This is the second time CEO Jeff Tangney has been making public a health tech company since the inception of his previous medical software startup, Apocrates, in 2011.
Let’s talk briefly about the big health tech exit market and then dig into Doximity’s IPO filing and get your head around how the company managed to survive the private-market dilution for seven years – and what the company is worth. Might be possible.
Health technology exits
The global digital health market is projected to reach $ 221 billion by 2026, which underscores the huge opportunities the sector can offer to venture capitalists. But investors are not just paying attention to projections; They are seeing several exits in digital health (read: liquidity) that are heating up their checkbooks.
CB Insights estimates that there were 79 healthcare IPOs and M&A transactions in Q1 2021 alone, a 60% increase from the previous quarter. Another report said that 145 digital health companies had 145 acquisitions in 2020, up from a solid 113 in 2019.
Still growing, it is fair to say that these figures describe a healthy exhaust environment.
The list of deals in the market is a direct fire. Earlier this year, founded in 2015, Everlywell acquired two healthcare companies to expand its digital healthcare and distribution. Last week, Modern Fertility was bought by RO in a majority-equity deal north of $ 225 million. Before you start complaining that this is not an IPO, consider this: a company less than four years old was bought by another company for a quarter billion dollars that is less than four years old.