Insurance technology startup Bright Health has acquired Zipnosis, a telehealth platform provider.
Cain Brothers, which served as Zipnosis’s exclusive financial advisor during the transaction, made the announcement. Though Bright Health confirmed the news, they declined to provide any additional details about the deal.
The acquisition “reflects a shared vision: lowering costs and providing greater access to quality, affordable, personalized care,” Cain Brothers said in its announcement.
Bright Health, a Minneapolis-based startup, operates in more than 50 markets across 13 states. It provides individual, family, small business and Medicare Advantage plans and works with local partners — including health systems, accountable care organizations and physician groups — to develop and manage provider networks. It also offers an IT platform that can be used to track healthcare costs.
To date, the insurtech company has raised more than $1.5 billion in funding.
Bright Health’s decision to acquire Zipnosis marks its foray into telehealth. Zipnosis, also based in Minneapolis, provides a telehealth platform that is being used at nearly 60 health systems across the country.
Zipnosis had a busy 2020. Its virtual care platform was used to screen and treat more than 2 million patients, and it entered into a strategic partnership with Upfront, combining its platform with Upfront’s patient communication and personalized engagement solution.
The company has raised $24.8 million in funding since its inception in 2009, according to Crunchbase.
The news of the acquisition comes just a few days after reports of Bright Health planning to raise up to $1 billion in an IPO that is expected to be launched in the second quarter of 2021.
The company also recently announced plans to acquire Central Health Plan of California, Inc., which will add about 110,000 consumers to Bright Health’s roster of more than 500,000. But it had not previously indicated an interest in telehealth-related acquisitions.
The U.S. telehealth market is booming, thanks in no small part to the Covid-19 pandemic. A little over 30% of all visits were provided via telemedicine during the public health crisis, and the weekly number of visits increased 23-fold compared with the pre-pandemic period, according to a study recently published in Health Affairs.
Other insurance technology startups have taken advantage of this rapidly growing market and made moves into telehealth. Bright Health’s rival Oscar Health — which also recently announced plans to raise up to $1.05 billion in an IPO — rolled out a virtual primary care product in some of its markets this year.
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