Uber offered it to the drivers. Airbnb did it for hosts. Now Doximity is making it available to doctors, but in a much bigger way.
In its IPO prospectus on Friday, health tech company Doximity – often referred to as LinkedIn for Doctors – announced that it will allocate up to 15% of the shares in the Doctors offering through a “reserved share program”.
This means eligible doctors can get shares at the same price as the select group of institutional investors who so often benefit from the IPO pop because they get an early allocation and don’t have to wait for trading to start. Doximity hasn’t yet said how many shares it plans to issue or at what price. In order to qualify for the program, members must meet certain activity thresholds.
“We strive to be the world’s largest physician-owned technology company, and our reserved stock IPO program is designed to both thank our members and help the process,” wrote co-founders Jeff Tangney, Nate Gross and Shari Buck in the Founder’s Letter section of the prospectus.
Airbnb, which went public in December, has reserved up to 7% of the shares in its IPO for hosts on the platform. After the stock fell 112% on its debut, hosts who bought the maximum number of shares posted a paper profit of over $ 15,000 on day one.
There is no guarantee that the stock will rally like this. When Uber went public in 2019, the hailship company made up to 3% of its offering available to drivers. IPO buyers are only up 14% while the Nasdaq Composite is up 74% over that stretch. Meanwhile, trading app Robinhood announced last week that it was launching a product called IPO Access to give retail investors more opportunities to get into deals at asking price.
Founded in 2011, Doximity is largely under the radar, despite being based in San Francisco. The company has not borrowed since 2014, only raised around $ 80 million in venture finance in its decade as a private company, and spent very little on marketing. The company is also profitable: net income rose 69% to $ 50.2 million last fiscal year.
Doximity has grown rapidly as doctors have become the standard location across the country to connect with each other and stay up to date on new research. It was also a very valuable tool for medical recruiters. The service is now used by 1.8 million medical professionals in all top 20 hospitals and health systems, according to the prospectus.
Revenue rose 78% last year to $ 206.9 million. Sales and marketing accounted for 30% of total sales. Most of that is “staff expenses, sales commissions, travel expenses, and other event expenses,” with a little bit spent on Google and Facebook ads. Only $ 2.6 million went into advertising last year.
While Doximity doesn’t do a lot for advertising, it generates a healthy amount of revenue from medical and pharmaceutical companies that use the app to reach out to doctors. All top 20 drug manufacturers use the service to educate medical professionals about their products. The company said its subscription paid marketing solutions product represented over 80% of sales in the past fiscal year.
Most of the remaining revenue comes from hiring solutions used by healthcare systems and medical recruitment firms to connect with Doximity’s doctors.
Doximity said it has more than 600 subscription customers, including 200 who spent $ 100,000 in fiscal 2021. Of those, 29 spent at least $ 1 million. Subscriptions made up 93% of total sales.
Doximity also launched a telemedicine product last year when Covid-19 forced patients to stay at home and communicate with their doctors remotely. The company only started charging for the telehealth service in early January.
“We have seen rapid adoption of our telehealth solutions by our healthcare customers as Doximity members who have used our productivity tools in the past have used organically,” the company said.
Doximity said it is competing with LinkedIn for members. It competes against recruiting companies in hiring and recruiting, while in the telemedicine market it faces competition from Teladoc and American Well and the universal video chat app Zoom.
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