Online health-care platform Fullscript has raised one of the largest venture capital rounds in Ottawa history, landing nearly $300 million in fresh equity to fuel its North American expansion push amid surging demand for natural wellness products.
Fullscript said Wednesday it has secured a US$240-million investment from U.S. firms HGGC and Snapdragon Capital Partners.
The round is among the biggest ever for an Ottawa firm, eclipsing major deals such as Assent Compliance’s $160-million raise three years ago and Shopify’s $100-million series-C round in 2013. It comes as Fullscript is riding a wave of growth that’s seen revenues skyrocket from $40 million three years ago to a projected $300 million in fiscal 2021.
Health-care practitioners across Canada and the U.S. use Fullscript’s software to dispense products such as vitamin supplements as well as track inventory, automatically refill patients’ orders and create treatment plans. The company serves millions of patients, dispensing more than 20,000 different types of supplements and natural health-care products via its online marketplace.
Co-founder and CEO Kyle Braatz says the company is addressing a growing market as the North American health-care industry shifts its focus from curing illnesses to preventing them.
“The reality is if you can keep that patient from getting sick, you’re going to save so much money in the health-care system,” he told Techopia on Wednesday.
More than 30,000 medical doctors, osteopaths, nurse practitioners, naturopathic doctors, chiropractors and other health-care professionals now subscribe to Fullscript’s platform. The firm targets practitioners of “integrative medicine” – that is, they not only treat symptoms of illness, but put special emphasis on the role of diet, exercise, lifestyle changes and supplements in maintaining a patient’s well-being.
More 'holistic view' of health care
Most are located south of the border, where Braatz says health-care organizations are increasingly looking to rein in costs by encouraging patients to engage in healthier lifestyles, including using natural supplements when warranted.
“Practitioners are prescribing more than pharmaceuticals,” he explained, noting that most U.S. medical schools now stress the importance of proper nutrition and exercise and more non-traditional treatment approaches are being covered in health insurance plans.
Braatz says medical doctors are the fastest-growing segment of Fullscript’s practitioner base as the health-care establishment embraces the trend.
“We’re seeing a way more holistic view of ‘Let’s keep patients healthy and well,’” he said.
Still, the veteran CEO believes the firm is barely scratching the surface of its potential. He says hundreds of thousands of health-care professionals in North America practise integrative medicine but aren’t on the platform yet, and recent studies have pegged the global market for complementary and alternative health-care treatments at more than $80 billion.
“There’s so much opportunity,” Braatz said. “We believe very strongly that integrative medicine will simply be medicine in the future, and Fullscript is going to be the platform that powers that.”
"We believe very strongly that integrative medicine will simply be medicine in the future, and Fullscript is going to be the platform that powers that."
In addition to building its network of practitioners, the firm plans to expand its partnerships with electronic health records companies that provide data on patients’ usage of supplements and other treatments. That information is fed into Fullscript’s analytics dashboard that helps health-care professionals track patients and devise treatment plans, and Braatz says more fulsome data will lead to better outcomes.
The company looked at several potential sources of equity before opting to partner with HGGC and Snapdragon.
Braatz said Fullscript’s brass was swayed by the firms’ strong track record of driving growth at mid-market software and health-tech ventures. Partners from both companies will be joining the Ottawa firm’s board of directors to help map its future trajectory.
“They were really bullish on underwriting our strategy and our executive team and really backing the future of where we’re going, which made us feel really confident,” Braatz added. “The alignment in our views of the world was so strong.”
He said the new partners also bring expertise in mergers and acquisitions that could prove invaluable should the company choose to go that route.
“We have the ability to supercharge this model if we move fast,” Braatz said. “I think M&A is a way to accelerate (growth) even faster than we already are.”
Founded a decade ago, Fullscript twice topped OBJ’s list of Ottawa’s fastest-growing companies in 2016 and 2017. It merged with Arizona-based competitor Natural Partners three years ago, doubling in size overnight in what Braatz called a move to solidify its position as the North American “leader in integrative health care.”
Originally financed by a couple of million dollars in angel funding, Fullscript was largely bootstrapped before landing its first major VC round – a US$25-million investment led by California-based Kayne Partners – in 2019.
The firm has continued to gain momentum since, beating its financial projections by more than 20 per cent in its most recent fiscal year as the pandemic triggered even more demand for natural wellness products. Fullscript has doubled its headcount in the last two years to more than 500, with 260 of those employees in Ottawa.
Meanwhile, the company has beefed up its senior leadership team in recent months, with Braatz shifting back into the chief executive’s role after three years as chief revenue officer.
Now, he believes all the pieces are now in place for Fullscript to become the undisputed market leader in its space.
“It’s a whole new world for us,” he said. “I always say we’re just getting started, but now we’re getting started with a brand new look. I know how impactful our company can be for the world.”