Teladoc Health Becomes First Telehealth Company to Go Public with Over $1 Billion Market Cap on IPO Day

On the morning of July 1, Eastern Time, telehealth company Teladoc officially began trading on the New York Stock Exchange, becoming the world’s first online consultation company to go public. The stock opened at $29.90 per share, representing a 57.37% increase over its IPO price. By the close of trading, Teladoc shares were priced at $28.50, marking a 50% gain from the IPO price but a 4.68% decline from the opening price. The company had issued a total of 38.5 million common shares.

Teladoc (TDOC), founded in 2002, is the first and largest telehealth platform in the United States. It provides on-demand healthcare services via mobile devices, the internet, video, or phone, unrestricted by time or location.

It has more than 1,100 board-certified physicians and behavioral health specialists, handling a high volume of medical cases daily, such as acute upper respiratory infections, urinary tract infections, anxiety, and smoking cessation. Approximately 11 million members benefit from Teladoc’s services, which are available 24 hours a day, 365 days a year. The average cost per patient visit is approximately $40. In 2014, TDOC completed approximately 300,000 telemedicine visits.

TDOC’s customers reduce their healthcare costs by purchasing TDOC’s services, gaining access to convenient, affordable, and high-quality healthcare. TDOC believes that enhancing member satisfaction is central to its corporate value proposition, holding that any consumer or healthcare professional is a potential TDOC member, customer, or supplier. According to data from the U.S. Centers for Disease Control and Prevention (CDC), there are approximately 1.25 billion outpatient visits annually in the United States, including visits to primary care providers, hospital emergency departments, and outpatient clinics. TDOC estimates that roughly 33% of these visits could be conducted via telemedicine.

TDOC plans to expand its platform through selective acquisitions. In August 2013, TDOC acquired Consult A Doctor for $16.6 million in net cash. In May 2014, TDOC acquired AmeriDoc for $17.2 million in net cash. These two acquired companies specialize in providing telehealth solutions to small and medium-sized enterprises through broker distribution channels. These acquisitions added new distribution opportunities, which TDOC considers a crucial component of its development strategy. In January 2015, TDOC completed the acquisition of BetterHelp, a consumer-facing behavioral health service provider, with $3.5 million in cash and a $10,000 promissory note. TDOC committed to paying BetterHelp an amount equivalent to 15% of its total annual revenue for each of the next three years. On June 17, 2015, TDOC acquired Statdoc for $30.5 million, including $13.3 million in cash and $17.2 million in common stock. Statdoc is a telehealth provider dedicated to centralized managed care, health systems, and self-insured clients.

TDOC considers companies that develop telehealth market technologies or provide telehealth services as competitors. Currently, TDOC’s primary competitors in the telehealth market are Doctor On Demand, MDLive, and American Well.

This time, TDOC is expected to raise $100 million from its IPO, which will be used to acquire or invest in other businesses, products, or technologies to expand its existing operations. However, TDOC has not yet made any commitments regarding acquisitions or investments at this stage.

Related Articles:

Will Teladoc Become the First Online Consultation Company to Go Public?

Teladoc, the First Online Consultation Company to File for an IPO, Discloses Revenue Data with Over 10 Million Members