Teladoc is looking to catapult over some of its recent obstacles with its first acquisition under CEO Chuck Divita, picking up Catapult Health for a lofty $65M.
The closing price is over three times what Teladoc shelled out for BetterHelp in 2015, which could be justified if Catapult’s at-home testing synergies pan out as intended.
Catapult offers an at-home wellness exam called VirtualCheckup, giving members a diagnostic kit to collect blood samples, check their blood pressure, and screen for mental health conditions like depression or anxiety.
- From there, members have a virtual visit with a licensed nurse practitioner to discuss their test results, review top health risks, and develop an individual health action plan.
- If VirtualCheckup turns up anything that requires more intensive care, Catapult can now directly enroll eligible members into Teladoc’s chronic condition management programs or refer them to its virtual therapists and primary care providers.
Teladoc hinted that growing membership for its integrated care segment was a top priority during last month’s JPMorgan Healthcare Conference, with BetterHelp’s rising ad costs and dwindling user base prompting a change of course.
- It was also reported that Teladoc will be a central component of Amazon’s efforts to move deeper into healthcare by allowing its customers to access chronic care programs for diabetes, hypertension, and weight management.
- Revenue for Teladoc’s integrated care segment was up 2% year-over-year as of its Q3 earnings call in September, compared to a 10% dropoff for BetterHelp to $257M.
An immaculate M&A track record isn’t something that Teladoc has going for it. When it acquired Livongo at the height of the pandemic for $18.5B, the companies boasted a combined value of $37B.
- A few billions in write-offs later, Teladoc’s market cap now stands below $2B, but lessons learned from past experiences could set the Catapult integration up for more success.
At-home testing has historically been a significant limitation for many virtual care players, so Catapult could help Teladoc distance itself from the competition with an integrated platform that can tackle both.
The Takeaway
Teladoc is shifting its focus to chronic condition management with the acquisition of Catapult, and adding at-home testing to its diabetes and hypertension programs should be good news for their position in the market (assuming the integration avoids some past missteps).
