March 7, 2023 : Healthcare company 98point6 sells a part of its business to San Francisco-headquartered startup Transcarent for $100 million in cash and equity.
The contract will contain the virtual care platform and primary care company of Seattle-based 98point6, which delivers care in all 50 states. The transaction is anticipated to close on March 31.
98point6 links users in real time to its doctors alongside an AI-powered texts, chatbot, and digital images. Its clients include corporations such as Boeing, health plans, and health systems, and it also heads direct-to-customer.
98point6 will reintroduce as 98point6 Technologies, a software-only business that licenses its tech to third-party healthcare providers.
The agreement marks the latest branch in a startup road that began in 2015 and included almost $300 million of venture capital raised; rapid development during the pandemic; an abrupt leadership change in 2021; and furloughs.
About half of 98point6’s 300 workers, including doctors and clinical support staff, are pushing to Transcarent as part of the acquisition, as per a 98point6 representative.
“By integrating the 98point6 AI-powered virtual care technology and an affiliated company of world class physicians with Transcarent’s complete care platform, we will provide consumers and employers what they really want and require,” said Transcendent CEO Glen Tullman in a report.
Established in 2020, Transcarent delivers services to self-insured employers and offers virtual credentials to physicians through its app. Transcarent previously used third-party contractors for upkeep.
The company anchored a $200 million Series C round in January 2022, which obtained its valuation to $1.62 billion.
Tullman formerly took three other healthcare organizations public as CEO: Enterprise Systems, Allscripts, and Livongo.
98point6 is directed by Jay Burrell, who was elevated to chief commercial officer in February 2022. He substituted Jeff Greenstein, the company’s chairman, who assumed over interim leadership duties following the withdrawal of former CEO and co-founder Robbie Cape in 2021 August.
98point6’s investors possess private equity goliath L Catterton, late-stage investment firm Activant Capital, and Goldman Sachs.
The company anchored a $20 million convertible note in September and reported a contract with Tacoma, Wash.-based MultiCare Health System, the company’s first incursion as a third-party software provider. It also laid off 10% of its team in July.
98point6 rates No. 32 on the GeekWire 200, our privately held Pacific Northwest startup checklist.
“We remain determined to innovating new technology solutions and corporation models that operate upstream to give health care providers the infrastructure they require to succeed with consumers,” Burrell articulated in a message.