Deal: 23andMe Buys Telehealth Startup Lemonaid For $400M
23andMe (NASDAQ: ME), a well-known genetic testing company, is busting into the telehealth scene with a major acquisition. It’s buying Lemonaid Health, a telehealth platform, for $400mn split into $100mn in cash and $300mn in 23andMe shares.
- With Lemonaid, 23andMe has strategically positioned itself in the telehealth market, which has seen an enormous boost in the Covid pandemic’s aftermath. Telehealth is an obvious way for the genetic testing company to expand within the healthcare field.
- 23andMe built a solid business for itself, offering DNA testing kits that trace ancestry and predict predispositions to some health issues. However, its tests are usually one-off and leave small room for growth, so the company has ventured into new business areas, starting with aiding in drug development for pharma giants like GSK.
- Now, telehealth appears to be the new frontier for 23andMe’s expansion, and at face value, it seems like a solid expansion strategy.
- Lemonaid’s acquisition is expected to close before the end of this year. At $400mn, it’s a big win for the startup, which has raised about $60mn in venture funding. Its investors include Artis Ventures, Sierra Ventures, and American investment banker Bill Hambrecht.