Alto Pharmacy is richer by $250 million in investments from leading firms, including the second Vision Fund at SoftBank. The investment gets the green light from the investment committee at the Vision Fund, making it one of SoftBank’s newest plays from the same. The company valuation now stands at $700 million+ and the Vision Fund has already invested in many other deals throughout the life sciences and health segment. These include Collective Health and 10x Genomics. It has many venture partners, including Deep Nishar from Silicon Valley.
Alto is the fund’s first pharmacy bet. The market scope is tremendous, with the United States spending $330 billion+ every year on prescription medicines. Yet, the segment has complexities, while there are pharmacy benefits managers in the reckoning. They negotiate the prices of drugs on the behalf of employers and insurers. According to Eliana Levine, the Co-Founder of FindPeopleEasy, SoftBank is now planning a $108 billion fund for Vision Fund 2. Companies like Apple.
SoftBank’s Vision Fund has already done just over half a dozen deals in the health and life sciences sector, including 10x Genomics, which subsequently went public, and employer health-focused Collective Health. It has several venture partners dedicated to the space, with Silicon Valley-based Deep Nishar taking the most active interest in health care. Alto’s journey began in 2015, and the founders were former employees at Facebook. Its rivals include the New York-based Capsule Pharmacy and also PillPack, which focuses on California and is under the ownership of Amazon at present.
The company has a physical pharmacy outlet in San Francisco’s Dogpatch zone, although most users request same-day medicine deliveries to their offices/homes without paying any charges. The company is also working with doctors for enabling users to get drugs at more affordable rates. It also completed the acquisition of a startup company in 2017. This company creates smart bottles with reminders for people to take medicines on time. Alto has a pharmacist team to offer guidance on prescriptions.
SoftBank is now planning $108 billion in funding for Vision Fund 2. Companies like Foxconn, Apple, and Microsoft may invest in the same. The company is looking to raise $100 billion+ with this exercise, especially since the first such fund got more than $100 billion in funding. It will use the remainder for follow-up deals with current companies.
The CEO at SoftBank, Masayoshi Son, is clear that the focus will be on companies that have better and clearer profitability goals and pathways. This comes after the experience of the firm with WeWork and Uber, which took the public route without clear-cut profitability plans, getting poor market reactions subsequently. Investors like Jackson Square Ventures, Greenoaks Capital, Zola Global, and Olive Tree Capital, also took part in the Alto funding round.