The company, which started out selling hair loss supplements and erectile dysfunction drugs to men, has built a suite of health apps and now claims to generate $250 million in annual revenue — without having to buy insurance.
When it launched in 2017, the company’s flagship service, Roman, focused on circumstances where men might feel stigma or embarrassment when talking to a doctor in person. From there, the company introduced a women’s brand called Rory, which provides birth control, among other things, and a smoking cessation service called Zero. It now has a drug delivery service called Ro Pharmacy, which delivers more than 500 generic drugs for a flat fee of $5 each. To market itself to new patients, it has developed a health offering called Health Guides.
For each of these services, it provides patients with a remote care team. Unlike many telemedicine companies in the space, it focuses on areas of healthcare where patients are likely to have a repeated need and may need ongoing support, rather than the one-time sinus infections or urinary tract infections. That includes chronic medical conditions, such as diabetes and heart disease, which currently affect nearly half of all Americans.
From those services, patients can schedule time with a doctor, request a refill, ask questions, and more. Ro can also refer the patient to a personal service if necessary.
As of this week, Ro is valued at $1.5 billion after the close of a new $200 million round of financing led by General Catalyst. That brings the total funding amount to $376 million, making it one of the best capitalized start-ups in the burgeoning health technology sector.
While not profitable, Ro’s revenue is growing much faster than usual for a healthcare start-up. The company has also managed to avoid some of the costly complexities typical of healthcare companies, such as closing deals with insurers and other industry stakeholders.
The company already says it has grown to 5 million patient-doctor interactions. Given the rise of high deductible plans and the increasing number of Americans without insurance, Ro is betting that many more people are willing to pay out of pocket to access a doctor.
“We want to be the first call of the patients,” said Zachariah Reitano, the company’s CEO. “The more we are involved, the more we can influence the outcome.”
For Reitano, it’s not just about biting off a slice of the $3.5 trillion healthcare market. Instead, he notes, the company wants to “bring patients together to the point where you can use the shared cumulative leverage to push the system back.”
Reitano believes there is far too much waste and inefficiency with traditional healthcare. According to him, it is the result of a system that charges arbitrary prices and does not prioritize patient experiences and outcomes. He hopes that by offering transparent prices and care on demand, people will be increasingly willing to switch to a service like Ro, also for insured persons.
On the back end, the company is also building software for its doctors so they can easily see who’s in the queue — and which patients are high priority at any given time. It currently has between 50 and 100 medical providers on board and about a third of them are employed (the rest are under contract). The company hopes to change that by hiring more doctors and nurses full-time.
In the future, it also plans to offer home diagnostic testing services.
Ro is currently competing against start-ups such as Hims, who recently started talking about a deal to go public with a valuation of about $1 billion. It can compete with much bigger players like Amazon, which offers pharmacy delivery to people who juggle multiple drugs, and Walmart, which has big aspirations in healthcare.
While some onlookers view Ro as healthcare for millennials, the average age of a Ro customer is now 46 years old, Reitano notes. Most of the users are men, as Ro initially focused on men’s health, but the company expects the male-to-female ratio to level out in the coming years.
As Ro continues to grow, Reitano presents the service to doctors looking to recruit new patients. Instead of building their own software, their patients can use it to book an online or offline appointment or request a service. As Reitano puts it, his big vision is to become the “Shopify of healthcare”.