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Telemedicine’s Next Unicorn Could Very Well Be K Health Stock

Anonymized data from billions of 'health events' drives the artificial intelligence underpinning this disruptive platform

My phone has become my new doctor. No, not Siri or Alexa. I’m talking about the K Health app, the four-year old artificial intelligence platform that diagnoses health problems. Those who recognize its potential may want to invest in K Health stock.

A woman in a wicker chair looking at a doctor on a tablet, chatting.
Source: Agenturfotografin/ShutterStock.com

Here’s how K Health works. They turned more than 20 years of anonymized health events into data that feeds into an AI-powered predictive model that compares the user to others with similar characteristics, like age, medical history, gender, and symptoms. Sifting input from the user against those billions of health events produces a likely first-look at what ails them, along with an estimate of the likelihood of each diagnosis.

The New York-based machine learning telemedicine startup was named one of CNBC’s Disruptors, what the cable outlet calls “50 private companies at the epicenter of a changing world, poised to emerge from the pandemic as the next generation of billion-dollar businesses.”

Another of this year’s Disruptors, Kabbage, at #24 on the roster released in July, agreed last week to be acquired by American Express (NYSE:AXP) for an undisclosed amount.

K Health Stock Looks Poised to Join Telemedicine Unicorns

Demand for telehealth services is set to increase by more than 60% in the U.S. in 2020. The market is expected to experience a compound annual growth rate of more than 38% over the next five years, Employee Benefit News reported on Aug. 19, citing research from Frost & Sullivan, a management consulting firm.

K Health, founded by Israeli serial entrepreneurs Allon Bloch, Ran Shaul, and Adam Singdola, raised $48 million in a Series C fund raising round in February, just as the novel coronavirus hit America. Among the three, their previous successes include Wix.com (NASDAQ:WIX), Vroom (NASDAQ:VRM), and Taboola.

PitchBook pegs the firm’s valuation at $459 million, with a total of $97 million raised to date. Investors looking to get in on K Health stock at this point in its funding process would likely need to handle their private investing through a secondary marketplace like EquityZen or SharesPost, where earlier investors and option-rich former employees are looking to cash out of their holdings.

How K Health Works

I’ve been using the K Health app for about 18 months, included as part of my HMO membership. I’m able to use a continuum of services and interactions, including live chat with doctors and specialists. The smartphone app can be downloaded for free from either Google Play or the iOS App Store.

Simple look-up features that access the big data on symptoms and illnesses are free. Users can chat with a licensed doctor for a diagnosis and prescription for $14 per consultation. Information can be shared with clinicians and health professionals via a HIPAA-compliant messaging feature ahead of telemedicine or in-office appointments, if a user so chooses. For the full suite, a primary care membership costs $9 a month for a three-month subscription.

“K uses technology to reduce barriers to quality primary care,” CEO Bloch told Crunchbase. “Our users are able to get instant answers about their symptoms and chat with a doctor within minutes, all for 90 percent less than the cost of traditional primary care practices.”

The basic revenue model really takes off when the app is adopted by a healthcare provider, such as K Health’s partnership with Anthem (NYSE:ANTM), signed last year. Under the deal, Anthem’s app will build in the startup’s technology for AI-powered chat. The collaboration helps the insurer keep up with rivals like UnitedHealth Group (NYSE:UNH), whose Recover app facilitates post-surgery patient-doctor interactions.

Pandemic Fuels Already-Hot Landscape

The Covid-19 pandemic has only served to stoke an already-hot market for apps and services like K Health. Pre-coronavirus, it was generally acknowledged that telehealth services could save time for employees while reducing costs for employers. Now, with patients doing all they can to avoid a doctor’s office or urgent care visit, the apps have become an imperative.

Military shipbuilding company Huntington Ingalls Industries, which offers Teladoc Health (NYSE:TDOC), said employees weren’t that keen when the benefit was first launched in 2014, but had since seen a 17% increase in the wake of the pandemic.

To be sure, K Health is not alone in a field that includes healthcare giants like Humana (NYSE:HUM). Last year Humana launched a collaboration with Doctor On Demand to connect patients with primary-care doctors for regular video visits. Startups like digital care-centric insurer Oscar Insurance, which is using virtual visits to drive lower-cost generic drug use, is also a competitor.

Yet few in this crowded field seem to have the health informatics base that underpins K Health’s offering. Like Mike Bloomberg used to say when he was first peddling his now-in-demand Bloomberg terminals: “In God we trust; all others bring data.”

Robert Lakin is a veteran financial writer and editor, following fintech, agtech and property tech startups. He was previously emerging markets editor for Bloomberg News in Tel Aviv. He is a contributor to the Powered by Battery blog. Robert does not own any of the aforementioned securities.

Investing through equity and real estate crowdfunding or asset tokenization requires a high degree of risk tolerance. Despite what individual companies may promise, there’s always the chance of losing a portion, or the entirety, of your investment. These risks include:

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3) Lack of liquidity
4) Economic downturns
5) Dearth of investor education

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