K Health raises $132 million at a $1.5 billion valuation and expands into virtual childcare

K Health, the virtual health care provider that uses machine learning to lower the value of care by providing the majority of the company’s health assessments, is launching new tools for childcare on the heels of raising cash that values the corporate at $1.5 billion.

The $132 million round raised in December will help the corporate expand and help buy upgrades including an integration with most electronic health records — an integration that’s expected by the second quarter.

Throughout 2020 K Health has leveraged its position operating at the intersection of machine learning and consumer healthcare to raised $222 million during a single year.

This appetite from investors shows how large the chance is in consumer healthcare as companies look to use technology to form care cheaper .

For K Health, meaning a monthly subscription to its service of $9 for unlimited access to the service and physicians on the platform, also as a $19 per-month virtual psychological state offering and a $19 fee for a one-time urgent care consultation.

To patients and investors the pitch is that the info K Health has managed to accumulate through partnerships with organizations just like the Israel health maintenance organization Maccabi Healthcare Services, which gave up decades of anonymized data on patients and health outcomes to coach K Health’s predictive algorithm, can assess patients and aid the in diagnoses for the company’s doctors.

In theory meaning the company’s service essentially acts as a virtual medical care physician, holding a wealth of patient information that, when taken together, could be ready to spot underlying medical conditions faster or provide a more holistic view into patient care.

For pharmaceutical companies that would mean insights into population health that would be potentially profitable avenues for drug discovery.

In practice, patients get what they buy .

The company’s psychological state offering uses medical doctors who aren't licensed psychiatrists to perform their evaluations and assessments, consistent with one provider on the platform, which may cause interactions with untrained physicians which will cause more harm than good.

While company chief executive Allon Bloch is probably going correct in his assessment that the majority services are often performed remotely (Bloch puts the figure at 90%), they ought to be performed remotely by professionals who have the required training.

There are limits to what proportion work an algorithm or a generalist should do when it involves healthcare, and it appears that K Health wants to push those limits.

“Drug referrals, acute issues, prevention issues, most of these are often done remotely,” Bloch said. “There’s a chance to try to to far better and potentially cheaper. 

K Health has already seen many thousands of patients either through its urgent care offering or its subscription service and generated tens of millions in revenue in 2020, consistent with Bloch. He declined to disclose what percentage patients used the urgent care service vs. the monthly subscription offering.

Telemedicine companies, like other companies providing services remotely, have thrived during the pandemic. Teladoc and Amwell, two of the first pioneers in virtual medicine have seen their share prices soar. Companies like Hims, that provide prescriptions for elective conditions that aren’t necessarily covered by health, special purpose acquisition companies at valuations of $1.6 billion.

Backing K Health are a gaggle of investors led by GGV Capital and Valor Equity Partners. Kaiser Permanente’s pension fund and therefore the investment offices of the owners of 3G Capital (the Brazilian investment company that owns Burger King and Kraft Heinz), along side 14W, Max Ventures, Pico Partners, Marcy Venture Partners, Primary Venture Partners and BoxGroup, also participated within the round. 

Organizations working with the corporate include Maccabi Healthcare; the Mayo Clinic, which is investigating virtual care models with the company; and Anthem, which has white labeled the K Health service and provides it to a number of the insurer’s many members.