Mednow Inc (TSX-V:MNOW, OTCQB:MDNWF) told investors that it has closed a C$500,000 investment in Doko Medical Inc for a foothold in the US telemedicine and pharmacy services market.
The investment was made through a convertible debenture, for a 2.8% equity interest in the virtual healthcare provider at a C$17.5 million pre-money valuation.
“Mednow’s initial investment in Doko Medical aligns with our goals of providing exceptional quality service and discrete, fast and convenient support to patients through digital pharmacies,” CEO Karim Nassar said in a statement.
“This investment initiates Mednow’s entry into the US telemedicine and pharmacy services in a prudent manner where we have the ability to benefit from the growing demands of these industries, with the option to increase our investment in the future," he added.
READ: Mednow inks C$1.9M deal to acquire specialty pharmacy company Infusicare
Doko Medical is a virtual healthcare provider operating across 38 US states, with over 100 physicians and health care workers engaged over its platform, which specializes in urgent care, mental health and erectile dysfunction.
Mednow noted that the company's platform is used daily by physicians and patients, and patients can order prescriptions and send them directly to a pharmacy of choice, resulting in a hassle-free patient experience.
It said the proceeds of its investment will be used by Doko Medical to invest in digital marketing, hire US sales and management staff, hire care-navigation professionals to manage patient care, and invest in a technological platform.
“Given the sensitive and underserved market to support patients with erectile dysfunction, coupled with a lack of insurance coverage in the United States, we believe this investment will show our commitment to the importance of men’s health and wellness,” Nassar continued.
Mednow said the strategic highlights of the Doko investment are as follows:
- Pathway to US telemedicine market: the market for telemedicine in the US is expected to reach US$64 billion by 2025, growing 18% per year;
- Expertise in behavioral health: the behavioral health market is expected to increase to US$242 billion by 2027, growing 5% annually, and Doko Medical currently has offerings in mental health and erectile dysfunction services;
- Geographic reach across the US: Doko Medical currently operates in 38 states, with plans to obtain national coverage by the end of the fourth quarter of 2021;
- Established infrastructure: Doko Medical’s current service coverage includes coronavirus (COVID-19) tests, prescription medications, mental health support by qualified physicians, sick notes, referrals, and video visits;
- Platform to leverage pharmacy expertise: with Doko Medical focused on growing its digital healthcare operation, Mednow can contribute its pharmacy industry knowledge and technological resources to advance growth in the pharmacy channel for both companies.
Mednow said its investment in Doko Medical further emphasizes its support for patient care, as it lines up with recent investments in virtual doctor services, mental health, genetic testing technology and specialty pharmacy.
It said the investment complements the acquisitions of Infusicare Canada Inc. and Medvisit, which combined, had aggregate revenue and gross profit in their last fiscal year of approximately C$13 million and C$1.2 million respectively.
“We are excited to join forces with a healthcare leader like Mednow, as we continue to strive to become a truly holistic patient care platform. Servicing our patients in an ethical, comprehensive manner is our mission and a partnership with Mednow further reinforces that journey” said Vino Shan, founder and chief technology officer of Doko Medical.
Mednow is a healthcare technology company offering virtual access with exceptional care. Designed with access and quality care in mind, Mednow.ca provides virtual pharmacy and telemedicine services, as well as doctor home visits, with convenience and through an interdisciplinary approach to healthcare that is focused on the patient experience.
The company’s services include free at-home delivery of medications, a user-friendly interface for easy upload, transfer and refill of prescriptions, access to healthcare professionals through an intuitive chat experience, a specialized PillSmart system that packages prescriptions and vitamins by date and time, and doctor consultations.
Contact the author at stephen.gunnion@proactiveinvestors.com