Everlywell raises $175 million to expand virtual care options and scale its at-home health testing
Digital health startup Everlywell has raised a $175 million Series D funding round, following relatively fast on the heels of a $25 million Series C round it closed in February of this year. The Series D included a host of new investors, including BlackRock, The Chernin Group (TCG), Foresite Capital, Greenspring Associates, Morningside Ventures and Portfolio, along with existing investors including Highland Capital Partners, which led the Series C round. The startup has now raised over $250 million to date.
Everlywell, which launched to the public at TechCrunch Disrupt SF 2016 as a participant in Startup Battlefield, specializes in home health care, and specifically on home health care tests supported by their digital platform for providing customers with their results and helping them understand the diagnostics, and how to seek the right follow-on care and expert medical advice.
Earlier this year, Everlywell launched an at-home COVID-19 test collection kit – the first of this type of test to receive an emergency authorization from the U.S. Food and Drug Administration (FDA) for its use that allowed cooperation with multiple lab service providers over time. The COVID-19 test kit joins its many other offerings, which include tests for thyroid hormone levels, food and allergen sensitivity, women’s health and fertility, vitamin D deficiency and more. I spoke to Everlywell CEO and founder Julia Cheek about the raise, and she acknowledged that the COVID-19 pandemic was definitely behind the decision to raise such a large amount so quickly again after the close of the Series C, since the company saw a sharp increase in demand coming out of the coronavirus crisis – not only for its COVID-19 test kit, but for at-home digital health care options in general.
“We obviously have a very successful COVID-19 test,” she said. “But we’ve also seen three-fourths of our test menu just explode at well over 100% year-over-year growth, and several of our tests are at 4x or 5x growth. That is really representative of this shift in consumer health behavior that will continue in a big way in many different verticals that include testing, and making things more convenient, digitally-enabled, and in the home.”
Like other companies built on solving for a shift to more remote and virtual care options, Cheek said that Everlywell had already anticipated this kind of consumer demand – but COVID-19 has dramatically accelerated the pace of change, which is why the startup put together this round, at this size, this quickly (she says they started the process of putting together the Series D just in September).
“We’ve been talking about the digital health movement, and the consumer-directed movement probably for a decade now,” she told me. “I do believe that this will be the watershed moment, unfortunately. But hopefully, we will come out on the other side of the pandemic and say, ‘There are some good things that happened broadly for healthcare.’ That is the hope of what we lean into everyday, and fundamentally, why we went out and raised this amount of capital in this tremendous growth year.”
Everlywell has also expanded availability of its products this year, with distribution in over 10,000 retail locations across Target, Walgreens, CVS and Kroger stores across the U.S. The company also landed a number of new partnerships on the diagnostic lab and insurance payer side, as well as with major employers – a key customer group since employers shoulder the largest share of healthcare spending in the U.S. due to employee benefit plans. Cheek says that despite their commercial and enterprise customer wins, the focus remains squarely on consumer satisfaction, which is what distinguishes their offering.
“Our COVID-19 test is 75% new people buying our product, and it has an NPS [net promoter score] of 75,” she said. “And then it’s the most highly-referred product, and also one of our top tests where people buy other tests. Experience matters here – we know that if someone is a promoter of Everlywell, if they rate us a nine or a 10, on NPS, they are five times more likely to purchase again on the platform.”
That’s not new for Everlywell, according to Cheek – customers have always had a high degree of satisfaction with the company’s products. But what is new is the expanded reach, and the realization among many Americans that virtual care and at-home options are available, and are effective.
“What you have is this lightbulb moment for Americans in a new way that care can be delivered where then they definitely don’t want to go back,” she said. “It’s not just for Everlywell. This is all of these verticals, that have really shifted consumer behavior around healthcare in the home, and I think that will be somewhat permanent. That is the main driver here, and is what we’re seeing, and it’s why Everlywell has resonated so well with so many Americans.”