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The coronavirus pandemic has quickly increased the need for telehealth services, and the high-demand has made telehealth startup Ro a winner. It was disclosed Monday that Ro is valued at $1.5 billion after closing a $200 million Series C led by existing investor General Catalyst.

Startup co-founders motivated by health problems

Ro was launched in 2017 by Rob Schutz, Zachariah Reitano, and Saman Rahmanian. CEO and co-founder Zachariah Reitano told Forbes that Saman Rahmanian, Rob Schutz, and himself have all faced health challenges and started the company motivated by a personal need. Reitano says that all his family members have faced life-threatening illnesses.

The company will use the new funding to offer remote patient monitoring with integrated devices. This is expected to quickly increase the capacity for chronic disease management, urgent care, and at-home testing on its platform.

Ro also plans to add more staff. They currently have around 250 employees. There are also plans to add 100 more employees to double the engineering team. 

Trending toward telehealth

U.S. health care spending reached $3.6 trillion in 2018, about $11,172 per person, according to data from the National Health Expenditure Accounts.

The trends were already gravitating toward telehealth, but the pandemic escalated an expansion in digital medical treatment. Most medical practices have shut down for non-elective procedures and are not taking office appointments during the coronavirus crisis. In the meantime, the telehealth marketplace is growing.

Analysts at Forrester Research predict that telehealth appointments could top 1 billion worldwide by the end of 2020 and Frost & Sullivan analysts think demand will increase by 64% in the U.S. alone.

Ro operates three digital health clinics in the U.S.: Roman for men’s health, Rory for women’s health, and Zero for smoking cessation. Between the 3 clinics, its product offerings cover nearly 20 conditions, including sexual health, weight loss, dermatology, and allergies.

In April the Ro Pharmacy was launched. It is an online cash pay pharmacy for existing customers. And more than 500 generic medications are offered for $5 per month per drug.

Patients use the company’s digital platform to connect with a Care Team which includes a U.S. licensed doctor or nurse practitioner. Appointments are not covered by insurance, but a visit only costs $15 which Ro says is less than many copays. 

A unicorn company with big plans

Ro’s Series C funding round included significant participation from existing investors FirstMark Capital, Torch, SignalFire, Box Group, TQ Ventures, Initialized Capital, and 3L. First-time investor The Chernin Group came in for the new round. The Ro team has raised a total of $376 million since the company was founded in 2017.

Ro expects to generate $250 million in revenue in 2020 based on its current run rate, a method of forecasting earnings based on current financial performance. The digital platform has hosted more than 5 million healthcare visits for patients in nearly every county in the U.S. 

29-year-old Reitano was a 2020 Forbes 30 Under 30 honoree in the healthcare category. He was also featured in the Big Money list which highlights founders from across the 20 Under 30 category who have raised more than $15 million. Ro was the highest-funded startup on the list. 

Forbes has pointed out that Ro is now a unicorn, a private company valued at more than $1 billion. According to CB Insights there only about 400 unicorn companies in the world.

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