Accolade to Acquire Telehealth Company Innovation Specialists (dba 2nd.MD)

Accolade, a provider of cloud-based, on-demand technology-enabled healthcare concierge services for employers, health plans, and health systems, agreed to acquire telemedicine company Innovation Specialists (dba 2nd.MD) for $460 million.

Innovation Specialists reported unaudited revenue of $35 million in 2020. The company’s telehealth services cover conditions across all adult and pediatric specialties and subspecialties. According to the company, its telehealth platform is used by 300 employers, covering over seven million employees.

“We share a common vision to help every person live their healthiest life by dramatically improving quality and accessibility of care through a people-focused, clinically-driven support model. Bringing 2nd.MD’s world-class Care Team and digital approach with expert medical consultation into Accolade, and continuing to offer it on a stand-alone basis, will have an immediate and measurable impact for our customers, their employees, and the health plans we work with,” said Rajeev Singh, CEO of Accolade.

“Both companies have built deep relationships with employers and health plans by helping employees navigate the increasingly complex and inconsistent healthcare system. With the addition of 2nd.MD, we will nearly double our total addressable market while providing the most comprehensive, integrated healthcare navigation experience available.”

Last year, Accolade acquired MD Insider, a data-driven machine learning platform that analyzes physician performance insights in experience and quality areas, for an undisclosed amount. Backed by over $20 million funding from Summation Health Ventures and other individual investors, in 2020, MD Insider reported revenues of over $24 million.

Mergers and acquisitions (M&A) continue to be the most popular exit source for digital health investors and companies. A total of 184 digital health companies were acquired in 2020, compared to 169 in 2019, a 9% increase in M&A activity in year-over-year, according to Mercom’s Q4 and 2020 Digital Health Funding and M&A Report.

More recently, Talkspace, a telebehavioral healthcare company, and Hudson Executive Investment Corp, a special purpose acquisition company (SPAC) sponsored by Hudson Executive Capital, announced that they have entered into a definitive merger agreement. The combined company will operate as Talkspace. The transaction values Talkspace at an initial enterprise value of $1.4 billion (approximately 11x 2021 estimated net revenue of the Talkspace).