Exclusive: Dr. B raises $8M for COVID telehealth service
Vaccine waiting list startup Dr. B raised $8 million as it pivots to virtual COVID treatment distribution, CEO Cyrus Massoumi tells Axios exclusively.
Why it matters: As COVID surges continue and public health agencies relax safety guidelines, demand for antiviral medications such as Paxlovid is on the rise — but data suggests the drugs aren't getting to those who need them most.
Deal details: Lerer Hippeau and Founders Fund led the fundraise.
Between the lines: Massoumi, who also founded doctor-patient matching startup Zocdoc, plans to offer the antivirals for free to those who can't afford them.
- "My greatest regret at Zocdoc is we never did enough to help the people who couldn’t afford coverage," says Massoumi. "I always told myself with my next health care company I’d solve both parts of that equation — accessibility and equity."
Context: After his stint at Zocdoc, Massoumi started Dr. B as an online matchmaking service in New York for unused vaccines, with 2.5 million people signing up.
- The company distributed 1.1 million vaccine doses in 90 days — and Massoumi began looking for the company's next act.
- "As vaccines became more widely available we started asking, 'How will we help improve health care access more broadly?'" says Massoumi. "That’s when we decided to go into medications."
How it works: For users who can pay, Dr. B will charge $15 per consult.
- Those who can't pay fill out an online form that instantly calculates whether they qualify for financial hardship based on federal poverty guidelines. If approved, the service is free.
Yes, and: To ensure Dr. B can offer those no-cost services, Massoumi aims to keep the company's budget trim — for example by avoiding expensive advertisements.
- "What makes us different from other telemedicine companies is we’re not buying Superbowl or subway ads," says Massoumi. "We take our promotional budget and give away free care under the hope and belief that that will spread enough knowledge about us to turn the economic model on its head."
Of note: Between April and May, Paxlovid demand jumped 315%, per Reuters.
- Yet socioeconomically vulnerable parts of the U.S. had less access to Paxlovid and other antivirals, per the Centers for Disease Control and Prevention.
What's next: Massoumi plans for Dr. B to soon offer a range of prescription consultations via telehealth — from those for heart health and dermatology to reproductive health‚ all with a no-cost option for those who qualify.
- In the meantime, the company has yet to consider future fundraising and is instead "heads down executing and getting ready for what we expect to be a very busy fall," says Massoumi.
👨🏽⚕️ One fun thing: Dr. B is an homage to Massoumi's grandfather, who became a doctor during the last global pandemic — the 1918 influenza pandemic.
Be smart: As Dr. B expands, it will face sharp competition from large and small telemedicine companies, most of whom have years (if not decades) of a head start and far more capital. They include:
- Thirty Madison in February acquired women's-focused digital pharmacy Nurx and was last valued at $1.4 billion.
- Ro in January raised $150 million at a staggering $6.6 billion valuation.
- Teladoc (Nasdaq: TDOC) in 2020 acquired chronic virtual care company Livongo for $18.5 billion.
Additionally, Dr. B will need to create a clear and defensible customer acquisition strategy as it seeks to compete against its direct-to-consumer (DTC) rivals.
- "Five to 10 years ago, building a DTC business was itself considered disruption," says Lerer Hippeau managing partner Ben Lerer. "Now, that’s par for the course. So how do you crack that user-acquisition nut? That'll be the big challenge."