Online Pharmacy Ro to Raise Funding at $5 Billion Value
Online pharmacy and health technology company Ro has raised $500 million in new funding, its chief executive officer told Bloomberg News.
The round values New York-based Ro at $5 billion, according to people familiar with the matter who asked not to be identified because the matter is private.
Ro Chief Executive Officer Zachariah Reitano said the investment round was led by existing investors General Catalyst, FirstMark Capital and TQ Ventures. New investors including Altimeter Capital, Dragoneer Investment Group and 776 also joined the round.
The company and Reitano declined to comment on the valuation.
Ro, officially known as Roman Health Ventures Inc., initially gained traction by selling erectile dysfunction medication online when it launched about four years ago. It’s since expanded into more services, including women’s health and weight management. It also offers an online pharmacy for people to order generic drugs.
With the fresh funds, Ro plans to improve existing services and build out new ones. It’s raised $876 million since it was founded in 2017.
“What this funding allows us to do is to deeply invest more and more into that infrastructure,” Reitano said in an interview Monday. “It’ll allow us to expand really the breadth and depth of care we provide.”
Going public is a question of when, not if, Reitano added. The company will evaluate the timing and mechanism that makes the most sense, he said. Ro rival Hims went public earlier this year through a merger with blank-check company.
“This will be a large public company,” said Brad Gerstner, Altimeter’s chief executive officer, referring to Ro.
Gerstner said the coronavirus pandemic has altered people’s behavior, including how they want to interact with their doctor.
“From telemedicine all the way from online doctor visits to online pharmacy to at-home blood draw, vaccinations,” Gerstner said. “We just discovered over the course of the last 12 months that the world was ready for it.”
Ro’s model relies on people to pay out of pocket instead of insurance. The company’s revenue totaled $230 million last year, Reitano said.
Ro wants to use software and a network of doctors across the country to reach millions of people, something Reitano said is much harder to do if the company were to build clinics. Companies large and small have tried this model, which requires costly investments and are limited to reaching patients nearby.
Last year, Ro acquired Workpath, giving it access to software that sends health-care workers into patients’ homes to perform diagnostic screenings and other services.