Eucalyptus lands $50 million amidst online prescription model concerns
Telehealth startup Eucalyptus lands another big raise, this time for $50 million, despite recent concerns over prescription model.
Digital health startup Eucalyptus has just landed $50 million in its latest funding round, with the bulk coming from prior investors Blackbird Ventures, BOND Capital and Woolworths’ W23 venture arm.
Founded in 2019, Eucalyptus is the umbrella company for a suite of digital health brands that focus on selling online to different demographics.
These include Pilot — which focuses on men’s health and weight loss, Kin — which targets fertility support — and Juniper, which has a focus on women’s weight loss.
It also has a sexual wellness brand called Normal and a prescription skincare brand, Software.
This is the third significant round of funding for Eucalyptus, with landed $60 million in January 2022 and $30 million just six months prior. It also received $8 million in Series A back in 2020.
According to the AFR, the latest funding round brings the company’s valuation to $560 million.
When SmartCompany spoke to co-founder Tim Doyle in 2022, he said that Eucalyptus had seen 100% revenue growth since its previous $30 million raise.
This isn’t particularly surprising with the growth of the digital ‘telehealth’ industry, particularly since COVID-19.
But there’s still been bumps in the road. In mid-2o22 Eucalyptus announced it had to cut 50-60 staff due to a loan agreement being pulled from an investment firm.
But things seem to be looking up with this latest cash injection.
“Healthcare is one of the areas we are investing in broadly at Blackbird, from AI to diagnostics to telehealth. We believe telehealth is an important component of a new healthcare system to better support millions of people, all over the world, no matter where they live,” a Blackbird spokesperson said in an email to SmartCompany.
“We were drawn to Eucalyptus’ vision to build a suite of digital healthcare services for customers around specific conditions, a vision underpinned by the connective tissue between telehealth consults with doctors, pharmacy delivery and ongoing patient care.”
Concerns over Juniper’s prescription model and marketing
Despite the latest financial thumbs-up from VCs, Juniper in particular has come under scrutiny in recent months.
The Royal Australian College of General Practitioners (RACGP) has expressed concerns over Juniper’s marketing — including social media ads — as well as medication (which includes daily injections) being prescribed to customers off the back of a quiz, which is then reviewed by a GP for suitability.
Dr Terri-Lynne South, Chair of RACGP Specific Interests Obesity Management, said that this approach doesn’t sound adequate and that patients can overlook or not mention important information when it comes to assessment for medical prescriptions.
“They’re missing a whole heap of potential information,’ Dr South said in an article by the NewsGP.
“I’d also be concerned that at the moment we’re using things like healthy weight range and BMI in regard to defining when someone should be losing weight — that is not necessarily the best measure.”
According to Eucalyptus clinical director, Dr Matthew Vickers, the quiz is comprised of 100 thorough questions and that follow-up care is included as part of the Juniper journey.
“It’s concerning that many critics seem to have little understanding about the industry or a willingness to engage,” said to NewsGP.
“Patients are more than capable of providing a medical history with appropriate questioning, and where our GPs do not feel that this is adequate, they simply won’t proceed with a consultation or treatment plan.”
The Therapeutic Goods Administration (TGA) has also expressed concerns over Juniper, and competitor Mosh’s, services and marketing.
“We are concerned about business models that employ marketing strategies to influence health care choices made by Australians without first having consulted with a health professional in real time,” a TGA spokesperson said to The Australian.
Eucalyptus was also recently featured on Media Watch after a segment on 7 News focused on the weight loss journey of former-AFL star Dale Thomas, which heavily featured its men’s health brand Pilot.
According to The Australian, both Eucalyptus and Mosh have defended their advertising models, saying they’re compliant with Australian law.
Despite these concerns, Blackbird remains supportive of Eucalyptus and its space within the world of telehealth.
“Eucalyptus has worked with hundreds of thousands of patients around the world. Our decision to continue investing in Eucalyptus has come down to the progress of the team so far, and the performance of the business towards that vision, a Blackbird spokesperson told SmartCompany.
“Telehealth is a new format for healthcare, and Eucalyptus is at the forefront of this industry. There are bound to be detractors when new formats emerge to challenge the status quo, but we believe the company has consistently provided a safe and comprehensive service for its patients.
“Eucalyptus’ focus on patient safety is evidenced by the fact that it is the first Australian telehealth business to receive EQuIP6 certification from the Australian Council on Healthcare Standards (ACHS), which is a four-year continuous quality assessment and improvement accreditation program for healthcare organisations.”
