Doctor On Demand and Grand Rounds on Tuesday unveiled plans to merge, representing the latest example of consolidation in virtual care.
The merger follows Teladoc Health late last year merging with Livongo, a digital health company that helps users manage chronic conditions, in a $18.5 billion deal, and acquiring InTouch Health, a telehealth company that serves the provider market, for an estimated $600 million. Cigna last month shared plans to acquire telehealth company MDLive.
Doctor On Demand, a venture-backed telehealth company, and Grand Rounds, a venture-backed company focused on navigation for specialty healthcare, expect to complete their merger in the first half of the year. The companies will continue to operate under their existing brands for the time being.
Both companies have a foothold in the employee health benefits market.
Grand Rounds sells its services to businesses, who then provide it to employees as a benefit. Doctor On Demand sells virtual behavioral health, chronic chare, preventive health and urgent care to employers and health plans. Seven percent of employers who offer telehealth as a carved-out benefit work with Doctor On Demand, according to a 2020 survey by Credit Suisse.
Ninety-two percent of employers overall offered telehealth benefits to their employees in 2020, according to the survey, the plurality of which worked with Teladoc at 40%.
Once the Grand Rounds-Doctor On Demand merger closes, the newly combined virtual care company will operate under the name Grand Rounds, according to CNBC. Grand Rounds' co-founder and CEO Owen Tripp will serve as the CEO of the combined business, while Doctor On Demand CEO Hill Ferguson will continue to operate the Doctor On Demand division and join the combined company's board.
The combined company is designed to help coordinate care and offer patients support related to physical, behavioral, financial and administrative sides of healthcare, according to Tripp.
Financial details of the transaction were not disclosed.
The combined business will represent a multibillion-dollar digital health company. Grand Rounds was recently valued at $1.34 billion after raising a $175 million investment round last year, according to Reuters. Doctor On Demand last year raised $75 million in a funding round and was valued at more than $800 million, according to CNBC.