About six months after rolling out its new virtual telehealth product, a Las Cruces health care technology and service company wants to bring in close to $100 million for marketing and sales expansion on its path to going public.
Electronic Caregiver Inc., on June 12, announced the opening of a $95 million Series A preferred financing round. Proven companies typically use Series A investment rounds to boost their scaling or expansion, and that's the plan for Electronic Caregiver's raise.
Its CEO, Anthony Dohrmann, told Albuquerque Business First about 40% of the money brought in through the financing is set to go toward advertising and marketing for the company's virtual telehealth tech, called Addison Care. It's a customizable, artificial intelligence-backed avatar that assists patients with home health care.
The financing is also part of the company's path toward an initial public offering, or IPO — the process of a private corporation offering shares of itself to the public in a stock issuance for the first time. If things go to plan, Electronic Caregiver could add its name to the list of public companies based in New Mexico within the next 24 months, according to its President, Joe Baffoe.
Addison Care, the company's newest telehealth technology, is a virtual caregiver product that lets users connect live with practitioners, monitor health metrics and provide other services through voice activation and Bluetooth. The company officially released the product, priced with a one-time installation and activation and then a monthly fee thereafter, in early January this year.
The company hopes Addison Care can meet what Dohrmann described as a growing demand for assistive health care. He said Electronic Caregiver, founded in 2009, has added around 30,000 customers for its products and services — including an Amazon Web Services' hosted and certified enterprise-level connected care platform called ADDI and a pocket smart health device — over the past year.
"We will not replace the caregiver," John Munoz, chief experience officer for the Las Cruces company, wrote in an email to Business First. "We focus on preventative and proactively addressing health trends with state-of-the-art tools, which help everyone who personally or professionally cares for the patient."
Although venture capital has been hard to come by in recent months, neither Dohrmann nor Baffoe, Electronic Caregiver's president, said they were worried about finding investors. Dohrmann told Business First his company had the $95 million financing scheduled to follow a $42.5 million investment round Electronic Caregiver closed last fall.
CMD Global Partners, an investment banking firm based in Chicago, is representing Electronic Caregiver in the $95 million placement, according to the June 12 news release from the Las Cruces company. The firm "understands what we've built," Dohrmann said, adding CMD will help Electronic Caregiver find "value-added strategic investors" to contribute to the company's growth by participating in the preferred financing, which could include existing technology partners like Intel Corp. and Amazon, alongside select institutional investment firms.
The company is in talks with around a dozen institutional investment firms currently, and it wants to close the financing in the third quarter of this year, he added.
"The proceeds from this round will help Electronic Caregiver rapidly exploit their first mover advantage across multiple markets and provide reliable and engaging service to their customers," John Adams, managing director at CMD Global Partners, said in the news release.
Electronic Caregiver, along with five others in New Mexico, made Inc. magazine's list of the fastest-growing privately-held companies in the U.S. last year, with reported revenue growth of 669% between 2018 and 2021. The company has around 300 employees currently, with most based in the southern New Mexico city and a few at offices in Arizona and Mississippi.
That number could grow closer to 700 "pretty quick," Dohrmann added. The company has 22 departments, including an in-house "care coordination" team on the third floor of the 10-story Electronic Caregiver Tower in Las Cruces.
The company bought the naming rights to the tower in 2018 and purchased the 105,000-square-foot building outright last year for $8.9 million.
Opening the $95 million preferred financing comes as Electronic Caregiver announced a new partnership with an Iowa-based retirement community, Western Home Communities, for its Addison Care product. Expanding into the Hispanic health care market is part of the company's plans, too. Electronic Caregiver wants to program Addison, the virtual caregiver avatar, to speak Spanish — and it's preparing to port its telehealth products to the Android app store, Dohrmann told Business First, with the Apple app store further down the road.
This story has been updated to accurately reflect that Addison Care, Electronic Caregiver's virtual caregiver, is a separate product from the company's ProHealth smart hub.
