Telehealth startup Zipnosis Inc. has been acquired by insurance company Bright Health Group Inc. Terms of the deal between the two Minneapolis-based companies were not disclosed.
New York-based Cain Brothers, Zipnosis' financial adviser, announced the deal Thursday. Bright Health confirmed that the acquisition had been made but didn't provide further comment. Zipnosis couldn't immediately be reached for comment.
RELATED: Zipnosis CEO Jon Pearce was part of the Business Journal's annual Health Care Forum.
Zipnosis, which makes telehealth software for health systems, has seen a major lift from the Covid-19 pandemic. During the first month of the pandemic, it saw a 1,714% spike in use of its software. It has hired and continued to grow throughout the past year.
Zipnosis has raised about $26 million in venture capital, including from local investors like Minneapolis- and Fargo, N.D.-based Arthur Ventures and Minneapolis-based Affinity Capital Management.
Bright Health has been growing even more quickly. The insurance-sector startup has raised at least $1.5 billion in venture capital since it was founded in 2015, including a $500 million round in 2020.
Bloomberg reported earlier in April that Bright Health is currently planning an IPO that could happen as soon as the late spring or early summer. The potential deal would give Bright a valuation of at least $10 billion and potentially as large as $20 billion. Bright Health declined to comment on the Bloomberg report.
Fierce Healthcare notes that insurers have been boosting their telehealth capabilities as the Covid-19 pandemic has driven more people to seek care from their homes. Industry giant Cigna agreed earlier this year to buy MDLive, a Miramar, Florida-based telehealth provider whose network includes more than 2,000 physicians and has provided care to more than 60 million people.
