Posted on Tuesday, Dec 1st 2015
It is well-known that the healthcare industry has been rather slow in adopting the benefits of the digital age. While federal regulations may have led to the implementation of the electronic health record system, when it comes to the simple task of taking an appointment over the Net, things still aren’t quite there. Billion Dollar Unicorn player ZocDoc realized this early in the day and has made significant advances to tap into this market opportunity.
New York-based ZocDoc was founded in 2007 by Oliver Kharraz, Nick Ganju, and Cyrus Massoumi with the objective of improving the healthcare experience for Americans. The company was founded when one of the founders, Cyrus Massoumi, suffered from a burst eardrum. Cyrus had to wait four days before he could see a doctor. It was then that he realized that in an age where most other services and products can be purchased any time and all the time using the Internet, access to healthcare professionals was still a far cry. The idea of ZocDoc was born with the intention of enabling patients to view doctors’ open appointment times and book instantly online.
Today, its platform allows patients to find doctors based on specialty, location, or insurance providers. They can make informed decisions about choosing their doctors based on reviews of their profiles. ZocDoc also offers additional capabilities such as booking an appointment either directly through its website or through the iOS and Android apps. For Doctors who subscribe to ZocDoc, the platform integrates the appointments into its office calendar software and its website so that the diaries are updated in real-time for other appointments. Patients can also get the benefit of reminders for checkups and online filing of waiting room forms. ZocDoc operates in more than 2,000 cities across the US and provides access to more than 50 medical specialties in English and Spanish. It has a database of more than 5 million patients using its system to make online doctor appointments.
ZocDoc does not charge any fee from the patients. Instead, it charges an annual fee of nearly $3,000 from the healthcare providers who are covered. The company does not disclose detailed financials, but as of August 2015, it was catering to more than 49,000 doctors. That translates to annual revenues of $147 million in revenues in 2015. Analysts estimate that the company has been profitable in all the markets that it has been operating in since 2013.
ZocDoc has been venture funded so far with $223 million raised in four rounds from investors including Atomico, Baillie Gifford, Goldman Sachs, DST Global, Founders Fund, and Khosla Ventures. Its last round of funding was held in August this year when it raised $130 million from Atomico and Baillie Gifford at a valuation of $1.8 billion.
ZocDoc plans to use the latest funds to accelerate growth and build new products. They are working on products such as the ability to upload medical records, improve data analysis tools to suggest additional procedures that should be scheduled, improved interaction tools between doctors and patients, especially with reference to a prescription refill and other services that could help patient better utilize insurance benefits.
An earlier funding round, held in 2011, had valued them at $700 million. Sometime earlier, insurance company Aetna, had offered to acquire ZocDoc for a valuation of $300 million. ZocDoc had declined the offer then. Last year, when asked about an IPO, ZocDoc had declined saying that it was in no big rush. I believe that the company has a good business model while catering to a definite market demand. It is working on expanding its product offerings and is already supported by a profitable and revenue generating business model. I wouldn’t be surprised if ZocDoc continues to stay independent before going public. And, if it does, given its performance, it should be able to sustain a Unicorn level valuation, even under tighter public scrutiny.
More investigation and analysis of Unicorn companies can be found in my latest Entrepreneur Journeys book, Billion Dollar Unicorns. Unicorns will also be discussed with some special guests during our 1M/1M Roundtable programs over the next few weeks. To be a part of the conversation, please register here. The term Unicorn was coined in a TechCrunch article by Aileen Lee of Cowboy Ventures.
This segment is a part in the series : Billion Dollar Unicorns
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