The Covid-19 pandemic has dramatically increased the demand for at-home health services of all kinds, and Austin startup Everlywell is among the companies riding this new wave of interest and capitalizing on it.
The startup, which was founded in 2015 by CEO Julia Cheek and launched in 2016, announced Dec. 3 it has raised $175 million in new venture funding to help it expand its virtual and at-home health test kit offerings and dig into new clinical research projects. The company is now valued at $1.3 billion, a big jump from the reported $175 million valuation it had just a year ago.
Investors in the series D funding round include funds managed by BlackRock Inc. (NYSE: BLK), The Chernin Group, Foresite Capital, Greenspring Associates, Lux Capital, Morningside Ventures and Portfolia. Existing investors Goodwater Capital, Highland Capital Partners and Next Coast Ventures also chipped in.
The company has now raised $250 million total.
Everywell has most recently been in the headlines for its FDA-authorized at-home Covid-19 test kit. But that is just one of many kits it offers. Others include tests for cholesterol, fertility, sexually transmitted disease, Lyme disease, testosterone, thyroid, allergies and stress.
“The pandemic has shed light on the challenges of lab testing for Americans, from unknown costs to confusion and inconvenience. We’ve been empowering people with a new way to get tested for five years and will continue to lead the way in a rapidly expanding space,” Cheek said in a statement. “We believe lab testing will be rapid, simple, and coupled with virtual care in the near future. This partnership with additional world-class investors enables us to build a transformative, multi-generational digital health company that puts people first — where they belong.”
Sales of Everlywell's kits have boomed during the Covid-19 pandemic. It expected to surpass $100 million in sales this year, up from $40 million in 2019, $20 million in 2018 and $6.1 million in 2019, according to Everlywell CFO Josh Stanley. That's fueled, in part, by online consumer demand, as well as the availability of its kits in 10,000-plus locations, including Target, Walgreens, CVS and Kroger stores.
The company said it has distributed more than 500,000 Covid-19 at-home test kits. Meanwhile, most of its test kits have also had year-over-year growth of more than 100%.
"Although the pandemic has had a devastating effect on our country, it has also served to accelerate the adoption of certain services that are designed to meet people where they live — literally," Stanley wrote in an email. "Telehealth has been a huge part of that momentum. Now, as Everlywell's growth demonstrates, at-home testing is part of that 'new normal' too."
Everlywell has grown at a remarkable clip. It had around 90 employees in February and expanded to nearly 200 earlier this fall. It now has 254 employees.
"We plan to grow our team significantly next year so we can serve millions of Americans in the coming years," Stanley said in an email. "Currently, we plan to grow our team to exceed 400 people in 2021."
The new investment appears to be the largest funding round for any tech startup in Austin so far in 2020. Other top rounds include Shattuck Labs' $118 million round in June, RVshare's $100 million round in October, as well as $60 million or more raised by OJO Labs, Disco and FlashParking, according to Crunchbase.
While the new funding round and recent success have made Everlywell one of the nation's top at-home digital health startups, as well as one of the hottest startups in Austin, the company has had to repeatedly defend the science and techniques behind its kits.
Some health experts warn that at-home kits for Covid-19 don't have as much rigorous scientific study and don't require prescriptions. Everywell has responded by noting it uses many of the same certified labs as traditional clinics and hospitals. Its tests are reviewed by physicians, and the company also offers follow-up options, which it is poised to expand on.
"We pride ourselves on offering our customers health insights that are deeper and more detailed than what they would typically receive at a doctor's office," Stanley wrote. "But insights need to be paired with action for better health outcomes. Already, we offer a physician consult or a results discussion with a registered health care professional included in the cost of each kit we sell. However, we believe there's a massive opportunity to further combine testing with telehealth to create a full ecosystem of care for those who need not just lab tests, but may also need prescription medication or treatment plans from physicians and other healthcare practitioners."
Everlywell's new funding adds to a string of recent successes.
The company took the stage at TechCrunch Disrupt in 2016, putting it on the startup radar. Then it reached a huge crowd of consumers for the first time when it pitched on ABC's "Shark Tank" in 2017 and secured a $1 million commitment from Lori Greiner. That same year, the startup boosted its overall funding to $5 million. In 2019, the company secured a $50 million round led by Goodwater Capital. It also hired former 23andMe president Andy Page in September this year. Meanwhile, Austin Business Journal in October recognized Cheek as one of its inspiring leaders of the pandemic, and Everlywell on Dec. 2 was named a Blazer winner in the 2020 Inno on Fire awards created by Austin Inno.
"Austin built its reputation on being a software- and hardware-focused technology hub, but that's finally starting to change as more biotechnology and consumer goods companies have risen to the forefront," Stanley wrote. "I hope today's news helps people continue to realize that Austin has the ingredients needed to become the next great technology hub: a great talent pool, a vibrant community of entrepreneurs and investors, and plenty of good ideas."
