Monday, August 24, 2020 – Google’s cloud division is investing $100 million in Amwell, formerly known as American Well, a company that builds technology for virtual doctors’ visits. The company has filed to go public, and Google’s investment will be a concurrent private placement at the IPO price.
As part of the partnership, Amwell will move parts of its business from Amazon Web Services, which it currently uses, to Google Cloud. Specifically, Amwell is selecting Google cloud as its “preferred global cloud partner” and moving some video performance capabilities to that platform, the companies said in a press release. The two companies will also cooperate on technology and build out a dedicated sales effort to expand Amwell’s footprint in the sector.
All of the major technology companies are vying to sign health-care customers, including insurance plans and hospitals, as they slowly shift from on-premise systems to the cloud.
Google Cloud’s Aashima Gupta, the company’s director of global healthcare solutions, said she expects to see continued usage of telehealth because of “more favorable reimbursement coverage and consumers looking into this as a viable option.” With more people than ever avoiding seeking in-person medical help at hospitals and clinics, usage of tools for virtual visits has skyrocketed in recent months.
Gupta said that in the future, the two companies plan to add more machine-learning capabilities to the service. “Imagine you’re in a virtual waiting room, and instead of a clipboard there’s a conversational AI helping you,” she said.
Amwell told CNBC in May that it’s seen a 1,000% increase in visits due to coronavirus and closer to 3,000% to 4,000% in some places. In its IPO filing, the company said revenue had increased 77% in the first six months of 2020, compared with the same period a year ago, from $69 million to $122 million. 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.
Meanwhile, Amewll faces strong competition from Livongo and Teladoc, two companies that recently merged in an $18.5 billion deal. With Livongo on board, Teladoc is now selling an expanded set of services, including tools to monitor patients with chronic health conditions such as diabetes and hypertension.
Google Cloud’s largest customers in the $3.5 trillion medical sector include health systems such as Mayo Clinic and Ascension. Some of these customers also use Amwell for their telehealth services. Others rely on rivals such as Teladoc, MDLive and Doctor On Demand.
Amwell currently works with about 2,000 hospitals, 55 health plans and 36,000 employers.