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New year, new acquisitions for health benefits startup Transcarent.
The Denver-based company announced on January 8 it would acquire another health benefits company, Accolade, for $621 million at $7.03 per share—more than double its stock as recorded the day before. The news caused its stock to rise to $6.86 at end of day Wednesday.
According to a press release, the transaction should finalize in Q2 this year, and Accolade will become privately held.
Both companies aim to help self-insured employers provide lower-cost healthcare to workers, Stat reported. The new addition would nearly quadruple Transcarent’s reach to 18 million members (14 million of which come from Accolade, according to Stat) represented through 1,400 employers.
Transcarent CEO Glen Tullman also told Stat he was interested in how some of Accolade’s services are “complementary.” He said Accolade’s virtual primary care PlushCare and its second-opinion service that helps patients make decisions related to surgeries, for example, can work in tandem with Transcarent’s virtual urgent care and generative AI-powered WayFinding tool.
Before this, Accolade’s prospects weren’t looking so great.
Founded in 2007, the company lost close to $100 million of its $414 million in revenue in FY 2024, which ended last February. Leadership, however, projected a more profitable 2025 in its Q4 earnings call.
Transcarent, created in 2020, raised $126 million in 2024.
The acquisition is being funded by venture capital firms General Catalyst and 62 Ventures (the latter of which Tullman also founded).