Post-COVID Investment Announcement: Tembo Health
June 11, 2020 | Scott Murphy
We’re pleased to announce that we have made our first investment into the Post-COVID Fund: Tembo Health. The company is addressing the problem of caring for some of the most vulnerable in this pandemic: senior citizens at nursing home facilities. It’s also on the right side of longer term needs: getting specialty care to seniors in a more effective, cost-efficient method via telemedicine.
AVG’s Post-COVID Fund will invest in promising businesses addressing the impacts of the virus creating a portfolio of ~20-30 such investments over the next 12-18 months.
Meeting the Telehealth Demand for Nursing Homes
Tembo Health brings specialty medical care (e.g., cardiology and psychiatry) to specialty nursing facilities via a proprietary, video chat platform. Nursing homes pay no out-of-pocket costs, and save money through reduced patient transportation and logistical expenses, while improving the quality of patient care.
In the face of the pandemic, Tembo has launched several initiatives including expedited onboarding for facilities, a growing roster of clinicians, and ability for clinicians to work from home through Tembo’s platform.
The Tembo Deal
As a result of COVID-19 and the subsequent changes made to Medicare reimbursement for telemedicine, Tembo is poised for rapid growth in 2020 and beyond. The company has updated its 2020 Annual Run Rate significantly upwards since the outbreak hit.
We participated in Tembo’s Seed Plus Round. The round, led by Resolute Ventures, enables Tembo to capitalize on market demand and extend runway beyond 24 months. The round was significantly oversubscribed.
What We Liked About the Deal
- Inbound Sales Momentum. Tembo has seen 10x inbound customer demand from some of the largest specialty nursing facilities in the country.
- Regulatory Tailwinds. In March 2020, Medicare began reimbursing telemedicine across all geographies. Overnight, the market for insurance-reimbursed telemedicine services tripled in size.
- Market. Pre COVID-19, the global telemedicine market was poised to grow from $38 billion to $130 billion by 2025. In addition, the senior share of healthcare spending is projected to grow from 34% to 50% by 2020.
- Team. As a Harvard Medical School trained doctor, trauma surgeon, and entrepreneurial leader in healthcare initiatives, Founder and CEO Anurag Gupta brings highly relevant domain expertise. He is backed by a team with strong, stage-appropriate skills and domain expertise.
- Tech & Moats. Tembo’s proprietary platform provides more granular, real-time, and actionable data. As a first mover, Tembo is creating competitive moats through high switching costs. Tembo is also building one of the world’s largest geriatric databases with multiple downstream uses.