Amwell plans $100 million IPO, plus $100 million from Google as a kickoff

As expected [TTA 6 Aug], Amwell on Monday filed S-1 forms with the US Securities and Exchange Commission (SEC) registering them for an IPO to raise about $100 million. The number and amount of shares on the New York Stock Exchange, under ticker symbol AMWL, were not disclosed. Interestingly, and somewhat unexpectedly, Google’s cloud business is taking a private placement of $100 million in shares equal to the IPO price, to be executed on the IPO closing.

The partnership will mean that Amwell’s cloud services on Amazon Web Services (AWS) will be moving to Google Cloud. Amwell will also move some video performance capabilities to that platform, and will also cooperate on technology plus build out a dedicated sales effort to expand Amwell’s footprint in the sector.

Amwell’s telehealth business, like Teladoc’s, skyrocketed during the worst of the pandemic shutdown. According to the CNBC article on the IPO, Amwell told them in May that it’s seen a 1,000 percent increase in visits due to coronavirus and closer to 3,000 – 4,000 percent in some places (which without further data is meaningless). The IPO filing stated that revenue was up 77 percent January-June 2020 versus same period 2019, from $69 million to $122 million. Profits are not following, however. Its net loss nearly tripled over the same period, growing from $41 million in the first six months of 2019 to $111 million in the first half of this year. Seeking Alpha has the operating loss at a slightly higher $113.58 million.

This past May, Amwell also raised $194 million in a second Series C [TTA 23 May]. Their financing to date is over $700 million.

Amwell states that it provides telehealth solutions for over 2,000 hospitals and 55 health plan partners with over 36,000 employers, covering over 80 million lives, a higher metric than members. This is in comparison with Teladoc which claims 51.5 million members, 50 health plans, 70 global insurers, and 12,000 clients in 175 countries. Amwell is having to compete with a larger suite of services that a Teladoc-Livongo combination will eventually offer. Amwell’s by-contrast modest IPO and private placement corresponds to their relative size, but a contrarian would also look at Teladoc’s huge expenditures for InTouch Health ($1bn) and Livongo ($18.5bn) and rightly be concerned about their runway to ROI and profitability.

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