Outcome Health has ended its high-profile lawsuit with investors, and the company's co-founders are stepping down from their day-to-day roles with the company.
Outcome and its investors, which included Goldman Sachs, the Pritzker Group and Alphabet, agreed on a deal to end a lawsuit that accused the Chicago startup of fraud, as first reported by Crain's. Outcome's CEO Rishi Shah and President Shradha Agarwal are stepping down from their current positions and will transition to chairman and vice chairman, respectively.
"All parties are reinvesting and share a common belief that the business model works," Shah said in a statement, according to Crain's. "This is an important milestone event that will instill confidence in the company among our valued employees, customers, partners and key stakeholders."
Outcome raised roughly $500 million last year, valuing the company at more than $5 billion. Investors sued Outcome for fraud following an October Wall Street Journal story that found several Outcome employees misled advertisers on the effectiveness of the company's ads. Outcome sells advertising to drug companies and other businesses via tablets inside doctor's offices.
As a result of the settlement, Shah, Agarwal, and Outcome's investors agreed to put $159 million back into the company, which will be used to "reduce the company’s debt by $77 million and further strengthen and scale its technology platform, automated processes and overall customer operations," according to a news release.
A search for a new CEO is ongoing. Nandini Ramani, the company's COO and a recent hire from Twitter, is leading the company's day-to-day operations in the meantime, according to Crain's. The company also announced an expanded board of directors, which will include three new independent directors and two investor representatives.
Outcome reduced its headcount by about one third in November, when it gave buyouts to around 200 employees.
