American Well, a start-up that helps hospitals and other physician groups integrate virtual consultations, has backing from a giant new partner: Philips.
As of June 28, American Well had raised a fresh $291 million, according to an SEC filing, which indicates the company is aiming to raise a total of about $315 million. In January, American Well announced a deal with Philips “to jointly deliver virtual care solutions around the world.” Derek Ross, the business leader of Philips’s population health management division, has joined American Well’s board as part of his company’s investment in the start-up.
The new infusion of capital makes American Well one of the best-funded companies in the booming digital health space. Telemedicine, or remotely connecting patients with doctors through secure voice and video chats, has long been considered one of the biggest opportunities to infuse technology into medicine.
However, adoption has been slow because of regulatory concerns along with a lack of consumer awareness and the challenges that many physicians have pulling in all the necessary patient records.
Still, investors are betting on the opportunity. American Well competes with Teladoc, a public company, and Doctor on Demand, a venture-backed consumer app that also offers virtual physician visits.
A new report from the research firm Rock Health found that digital health companies have raised more than $3.4 billion in funding in the first half of 2018. And acquisitions are picking up, most notably with Amazon’s agreement last week to buy internet pharmacy PillPack for around $1 billion.
Philips, which has a health-tech venture fund and also makes what it calls “business strategic investments,” is one of a number of significant partnerships that American Well has forged of late. Early this year, the digital investment division of insurer Allianz Group put over $59 million into American Well as part of an effort to “develop digital solutions that will widen access, lower cost and improve quality of healthcare for millions of patients worldwide.”
American Well also announced this year that it the telemedicine vendor working with Apple and Stanford on their heart-health study. American Well’s Board includes Deval Patrick, the former governor of Massachusetts, and Brendan O’Grady, CEO of the U.S. business of Teva Pharmaceutical Industries.
An American Well spokesperson didn’t provide a comment for this story. A representative from Philips didn’t respond to a request for comment.