Florence bought Zipnosis from Bright Health instead of building telehealth itself

Florence sells health systems subscription-based digital patient intake and tracking tools — updating clinical information, filling prescriptions, initiating self-discharge and booking follow-up visits — priced in tiers by patient volume.

That buying Zipnosis — white-labeled asynchronous telemedicine plus its customers — beat finishing Florence's own near-identical internal build.

A $20 million seed led by Thrive Capital, GV and Salesforce Ventures, reported by Axios in March 2023.

Florence debuted in 2023 with a $20 million seed led by Thrive Capital, GV and Salesforce Ventures, selling health systems subscription-based digital intake and tracking tools. An internal initiative set out to build asynchronous telehealth — a product very similar to Zipnosis.

Partway down the build path, CEO Aniq Rahman said the team realized Zipnosis was 'a really interesting asset' and asked whether they could bring some of it in-house instead. Florence reached out directly to insurtech Bright Health, which had paid about $50 million for Zipnosis from its venture backers in March 2021, per an SEC filing — then went public at an $11.2 billion valuation and spent 2023 staring down bankruptcy, finalizing a reverse stock split to meet NYSE thresholds and announcing the sale of its Medicare Advantage plans. Florence acquired Zipnosis in an all-cash deal, price undisclosed. At 70 employees, Florence had no corporate development operation to speak of, but Rahman said it was a good time to be a well-capitalized buyer as startups struggled for funding and public players pruned business lines.

Florence had already validated the demand internally: its near-identical internal build is what revealed Zipnosis as an asset worth buying.

The seller was distressed — Bright Health paid about $50M in 2021 and by 2023 faced bankruptcy pressure and was pruning business lines, making the asset available.

Florence was well capitalized on fresh seed money ($20M from Thrive, GV and Salesforce Ventures) in a market where startup funding had dried up.

Asynchronous telehealth extends Florence's digital front door toward patients before and after emergency care, the direction Rahman said the company wants.

Zipnosis brought an existing health-system customer base: the combined entity serves more than 50 health systems.

In a strained deal market, corporate divestitures hand well-capitalized startups assets they would otherwise have to build — and a small team can get the deal by writing to the seller directly.

As of the May 24, 2023 exclusive, the combined entity served more than 50 health systems. CEO Aniq Rahman said that after Florence digests the acquisition, he sees potential opportunity to acquire similar companies serving other sites of care — 'especially as it relates to reaching patients before or after their emergency medicine journey.' The purchase price and terms stayed undisclosed.