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Last month Amwell managed to raise $194 million to support the expansion of its services that are highly demanded today. Now it plans to go for an IPO later this year.
The COVID-19 pandemic has led to an increase in demand for telemedicine as people try to avoid personal contact with service providers. Amwell, the company which recently changed its name from American Well, has taken advantage of the surge in demand for its services to file for an IPO.
The company had earlier last month announced that it raised $194 million in funding as the demand for its services surged to up to 1000 percent. A source close to the company said that in some places, that Amwell has had demand rise up to 4000 percent.
Amwell IPO Scheduled for September
A report from CNBC shows that the company filed for an IPO earlier this week after hiring Morgan Stanley and Goldman Sachs as consultants in the deal. The IPO could take place in September according to sources who didn’t want to be named. The filings show that the old version of the name American Well was used.
Amwell wants to use its chance amid the skyrocketing demand for telemedicine. Its close rival Teladoc was reported to have had its stocks soar 88% since this year as the pandemic became widespread. Most of the gains were made in February when the broader market spiked.
Market Favors Company
Two other competitors OneMedical and Livongo have had unprecedented growth. Livongo which has a specialty in monitoring services has had its stocks doubled while OneMedical shares have grown by 120 percent.
The company’s CEO Ido Schoenberg said that the prevailing business environment has been favorable to the firm and similar concerns. He said that there is no certainty how long such conditions would subsist. The CEO stated:
“We don’t know how long it will last, and it is possible the window for any type of funding might not be available quite soon.”
The company has benefitted from the relaxed regulations that hitherto made it difficult for patients to access medical services via the internet. The stringent laws guiding online medical consultations were recently removed to help patients prevent unnecessary contacts that could result in exposure to COVID-19.
Backlash Is Possible Due to Board Composition
As news of the planned confidential IPO filters in, the company may face backlash due to the composition of its board. It has been alleged to lack diversity as all nine members are men. The absence of women on the board is expected to draw criticism as in the case of WeWork which was forced to add a female board member late after its filing. The controversy led to the withdrawal of its filings.
Amwell has attracted investors such as Anthem, the insurance company based in the U.S. Another big investor is Japan pharmaceutical giant Takeda.
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