CVS Health Ventures, the company’s venture capital arm, has put $100 million into Carbon Health, a primary care provider that offers same-day appointments, virtual visits, and other services that are made possible by technology.
According to Rebecca Springer, a senior healthcare analyst at PitchBook, this is Carbon Health’s first major funding from a corporate investor, and it may eventually lead to a strategic acquisition.
A regulatory filing from 2021 shows that CVS was in talks to buy One Medical, a major concierge primary care provider that competed with CVS. Unfortunately, merger and acquisition discussions fell through. With debt included, Amazon paid $3.9 billion for One Medical less than a year later.
CVS remains committed to expanding its primary care services.
Since the 2000s, customers of the pharmacy chain’s retail locations have had access to walk-in medical clinics. The services provided by its in-store clinics have, however, been quite limited. The company declared the launch of CVS Health Virtual Primary Care, an all-encompassing primary care service, in May of 2022.
CVS announced in September that they would be acquiring Signify, a value-based care provider whose primary focus is on in-home health evaluations, for a total of around $8 billion.
Springer said that after CVS bought Signify, the “next logical step” for it to reach its primary care goals would be to form a partnership with or buy a local, full-service primary care provider like One Medical or to work together with it.
She compared Carbon Health to One Medical, saying in an interview that “Carbon Health’s hybrid primary care-plus model is comparable to One Medical’s, though it does not utilize a membership model.”
When thinking about buying a private company, it’s common for the potential buyer to test out a strategic partnership and make a minority investment first. As part of the deal, CVS said it would run a pilot program for Carbon Health in a small number of its stores.
Carbon Health was last valued at $3 billion in August 2021, when Blackstone Alternative Asset Management led a Series D funding round. Dragoneer Investment Group, Brookfield Growth, DCVC, 500 Global, and Lux Capital are among the other investors in the company.
Even the primary care provider has been affected by the end of the boom caused by the pandemic. In June, Carbon Health let go of 250 workers, which was about 8% of its staff. Just last week, it laid off another 200 people and said it would end its remote patient monitoring and chronic care programs.