SAN FRANCISCO (Reuters) - Medications-by-mail company PillPack said it had raised $50 million in funding, underscoring the continuing appeal of healthcare companies to venture capital backers.
PillPack is taking on established U.S. pharmacies such as CVS, Rite-Aid and Walgreens, betting its tweaks, such as delivering rolls of individual-dose packs labeled by time and date, will help it win convenience-focused customers.
While technology has helped simplify other types of services and purchases, entrepreneurs have largely overlooked the pharmacy market, said George Zachary, a partner at Charles River Ventures, who led the funding round and will take a seat on PillPack's board.
Retail prescription drug sales in the U.S. last year totaled $259 billion, according to the Kaiser Family Foundation, a research organization.
Some 15 percent of prescriptions are filled via mail order, including from the pharmacy giants, PillPack Chief Executive TJ Parker said in an interview on Tuesday. While his company is exclusively mail-order for now, it expects to open retail locations later this year.
Trends such as the aging baby-boomer generation and national health-care reform are leading to increased spending on medicine, which in turn is drawing increased interest from financial backers.
Last quarter, life sciences drew $2.2 billion in venture backing, according to the National Venture Capital Association. That placed it second only to the software sector, with almost a one-third increase from $1.69 billion in the same quarter of 2014.
Accel Partners, Atlas Venture (CQ), Menlo Ventures, and Sherpa Ventures also participated in the funding round. Boston-based Pillpack was founded two years ago and launched last year.
(Reporting by Sarah McBride; Editing by Alan Crosby)