How TeleMed2U became a leader in virtual specialty healthcare.

TeleMed2U has been using a combination of technology and end-to-end patient services to provide high-quality affordable specialty care since 2011. The company makes specialty physicians more accessible to individuals, providers, and organizations by connecting them to hospital groups and clinics where they can provide telemedicine services. Today it counts Blue Shield of California, CalOptima Health, and Presbyterian Healthcare Services among its many  customers across the country.

When Moneta Ventures first invested in TeleMed2U in 2014, they did so because they recognized that the company had the potential to become a very successful technology-enabled healthcare services provider. It was that recognition that led Moneta to continue to invest and ultimately become the majority owner in the business in 2019. Over the next five years, Moneta would use its expertise to help drive the company through a major phase of growth.

Moneta leans in, TeleMed2U prospers.

One of the first things Moneta did after becoming majority owner was to recruit a new CEO.

“At the time, TeleMed2U was still dealing with a number of operational issues that left it burning about $2 million a year on just $3.5 million in annual revenue,” recalls Denise Ferre, a Partner at Moneta and the firm’s CFO. “The company wasn’t where we wanted it to be, so we brought in AJ Patel to start addressing the issues.”

One of Moneta’s limited partners, Patel is a pharmacy operations veteran who had the experience and expertise necessary to help the business meet its potential. His installment in the CEO position exemplifies Moneta’s playbook of leveraging its network to the greatest extent possible to benefit its portfolio companies.

“We had about 20 people on the team when I joined, were only operating in California, and were serving maybe 12,000 patients a year,” says Patel. “TeleMed2U was a great idea, but struggled with execution. It was clear to everyone that we had a lot of work ahead of us to turn it into the success we knew it would be.” 

Over the next few years, Moneta worked side by side with Patel, helping him to fill the operational gaps that had previously held the company back. Ferre, for example, stepped in and served as the company’s CFO for more than three years, while the late David Allen, another Moneta Partner, briefly served as CTO.

“The Moneta team was always willing to roll up its sleeves and support us,” says Patel. “Whether it was leading key business functions, using their extensive network to connect us to the right people, helping us with investor update decks, or conducting competitive market analyses, they were true partners and were in the trenches with us every step of the way.”

One example of that impact was the role Moneta played in helping to refocus the business on the right opportunities, such as behavioral health, which in spite of its tremendous growth potential, represented just 5% of the company’s revenues in 2019. With Moneta’s help, TeleMed2U went on to acquire the Specialty Clinic of Austin, laying the foundation for what would soon become a thriving behavioral health practice. Today, TeleMed2U’s behavioral health division works with over 50 mental health providers and drives approximately 55% of the company’s revenues. 

“I love that Moneta is made up of former entrepreneurs because it means that they get it and are able to jump in and use their operational experience to make a real impact.”

AJ Patel, TeleMed2U CEO

Another major initiative that Moneta helped to lead was the development of the company’s technology platform. “We wanted to help TeleMed2U become a tech-enabled services company with its own proprietary technology platform,” says Ferre. “We knew that would be an important differentiator and didn’t want the company relying on some solution that was cobbled together using a mix of off-the-shelf products that really weren’t fit for purpose and that didn’t work well together.” Under David Allen’s leadership as acting CTO, TeleMed2U went on to develop a custom end-to-end software application that manages everything from appointment scheduling to patient charting, prescriptions, and after care. A beta version of the system was deployed in early 2024 and is already being used by more than 25,000 patients.

It was thanks to these and other initiatives that TeleMed2U began experiencing rapid growth. By 2024, the company had 130 full-time employees as well as several hundred contractors. It also went from only servicing California-based clients to being able to deliver care in all 50 states, while increasing the number of medical specialties it focuses on from 5 to 20. Today, TeleMed2U is rapidly approaching $30 million in annual revenues, nearly ten times more than when Moneta became the majority owner in 2019.

A changing of the guard.

It was TeleMed2U’s healthy growth that ultimately led other investors to take note of the company. One of those investors was Kayne Anderson, a leading alternative investment management firm that read about TeleMed2U’s work with Blue Shield of California and saw an opportunity to help lead the company through its next phase of growth. In February 2024, Kayne Anderson acquired a majority stake in the business. 

“It was a great outcome for TeleMed2U and for our LPs,” says Ferre. “We returned substantial cash proceeds of approximately $25 million to our investors, while maintaining exposure to the future growth of the business through ongoing ownership. We are really proud of AJ and his team and the work that we were able to do together to build the company into a successful and profitable business. We know that they have found the right partner in Kayne Anderson to help lead the company to even more growth.”

Patel agrees that it was a good outcome and is excited about continuing to scale the business. “Between organic growth and targeted acquisitions, we expect to triple the number of patients we work with within the next five years,” he says. “We never would have reached this point without Moneta. They are incredibly smart, passionate, and good at what they do. And they were a true partner every step of the way, always working collaboratively with me to find the best solution. Partnering with them has been a great experience.”

Moneta remains invested in TeleMed2U as a minority shareholder.