GV-Backed Fabric buys TeamHealth’s virtual care business

Now, Fabric is moving even further into telehealth with yet another acquisition. The startup has acquired TeamHealth VirtualCare, the virtual care business of giant medical practice group TeamHealth, Business Insider has learned exclusively.

Fabric’s four acquisitions were backed by some cash from top investors such as Google Ventures, Thrive Capital and Salesforce Ventures. The startup has raised $80 million to date, including a $60 million Series A round in February led by General Catalyst.

The fabric is leaning into telehealth at a time when many others are leaning. While virtual care saw a tsunami of venture capital interest during the pandemic, investors and healthcare companies alike are now pulling back. UnitedHealth Group’s Optum also shuttered its virtual care business earlier this year, and telehealth companies Amwell and Teladoc have seen their stocks fall from pandemic highs.

But Fabric founder and CEO Aniq Rahman is still optimistic about the future of virtual care.

“There are a lot of people who are a little gun-shy about doubling down on their beliefs. For us, virtual care is not going away,” Rahman said. “We want to delve deeper into virtual care, and there are some amazing teams and technologies we’ve been able to assemble as a result.”

Getting care anywhere

While the plant’s M&A strategy is unusual for an early-stage startup, it is not unfamiliar to General Catalyst’s portfolio.

Commure, the $6 billion startup co-founded by General Catalyst CEO Hemant Taneja, has made six acquisitions in the four years since launching and has relied on those acquisitions to fuel its growth, a September BI investigation.

However, where Commure has faltered in developing in-house technology, Fabric claims its purchases are based on its own products.

Fabric, formerly known as Florence, launched emergency room software last year to help manage patients before, during and after their visits. But emergency rooms are often overcrowded, including with patients with non-urgent medical conditions who might be better off seeking care elsewhere, Rahman said.

By buying Bright Health’s Zipnosis, Fabric could offer telehealth capabilities to those patients.

“That really accelerated our business, and we had such a good experience with the Zipnosis business that we just went on an acquisition spree,” Rahman said.

Next, Fabric acquired Gyant, a generative AI platform that automates patient scheduling and directs them to the right type of care.

Rahman said the startup continues to build and improve its products that speed patient intake into the emergency room, automatically record health data in the hospital’s electronic medical record and track patients after their visits.

By purchasing MeMD from Walmart earlier this year, Fabric acquired the retailer’s virtual care technology platform and expanded into contracts with payers, employers and providers.

Now, combined with the acquisition of TeamHealth, Fabric has a 50-state network of clinicians and access to more than 100 million lives in managed care contracts with payers.

The startup says it serves 30,000 employers, payers and healthcare organizations, including major health insurer Highmark and Intermountain Health System.

Signs of life in the M&A market

Rahman said Fabric’s position as an early-stage startup has been surprisingly beneficial for closing deals.

“It allowed us to be very agile and nimble. We were able to guarantee speed and certainty to sellers, and we were also able to build very creative deals that allowed us to align interests for teams and shareholders. he said.

The strategy is new to Rahman, an entrepreneur and longtime investor at Vast Ventures. The last company he ran, an ad analytics company called Moat, he sold to Oracle in 2017 for $850 million.

In the years before the sale, Rahman said Moat “flirted” with the idea of ​​M&A, but it was never a priority for the company.

Now, Fabric is looking at increasingly larger acquisition targets, Rahman said, from the spectrum of private equity-backed and venture-backed startups as well as public companies. And with the IPO window still closed, many startups looking for liquidity have come knocking.

“A lot of the companies that are struggling to raise capital right now, or some of these larger businesses that are reassessing their market position, create opportunities for us as well,” Rahman said. “Almost every week, there’s input from investors saying we have assets in our portfolio that could be favorable to what you’re doing with Fabric.”