Google Inc. GOOGL investment division Google Capital has bought a stake in the web health insurance startup, Oscar Health Insurance Corp. for $32.5 million.
Oscar has collected over $350 million in its goal to apply data and technology to make the insurance business work more in the form of an Internet service. Oscar raised $145 million at a $1.5 billion valuation in April and Google’s investment takes its value to $1.75 billion.
Oscar
Oscar, founded in 2012, is an online health insurer and doctor finder company. Its website has an online search function that leads patients toward doctors as per the symptoms they type using natural language. Patients can screen doctors to ensure they’re in the system prior to booking an appointment.
Oscar signs up customers via online exchanges that were built by the 2010 Affordable Care Act. It primarily focuses on sighing up individuals, rather than employers. An average customer pays $5,000 per annum.
It enables users to connect to doctors over the phone for no extra cost by providing access to a free unlimited telemedicine service. Also, it is the first insurance company to offer free fitness-tracking devices to its customers so that they can get rewards for walking a certain number of steps daily.
Oscar currently offers its services only in New Jersey and New York and has more than 40,000 users in the two cities. It plans to expand to cover users in Texas and California at the beginning of next year.
Conclusion
Google has been trying to expand into the health care space through alliances and venture investments. It already has two companies, the Life Sciences group and Calico devoted to health care.
Recently, the online search giant partnered with continuous glucose monitoring (CGM) device maker, DexCom, to develop a series of compact (bandage-sized sensor), easy-to-use and economic CGM devices for diabetes patients. Last year, Google’s Life Sciences unit also collaborated with Swiss drug maker Novartis AG to develop contact lenses to measure one’s blood sugar level. The product will help to address potential ocular conditions. Google Ventures currently support 14 life sciences firms.
With all these efforts, including the latest one, Google is trying to strengthen its presence in the ever-expanding field of health care.
Google has a Zacks Rank #2 (Buy). A couple of other technology stocks worth considering are Manhattan Associates, Inc. MANH ,Open Text Corporation OTEX and Amazon.com AMZN , both sporting a Zacks Rank #1 (Strong Buy).
Date: September 16, 2015