CNBC Disruptor 50

38. Ro

Founders: Zach Reitano (CEO), Saman Rahmanian, Rob Schutz
Launched: 2017
Headquarters: New York City
Funding:
$1 billion
Valuation: $7 billion
Key technologies:
N/A
Industry:
Health care
Previous appearances on Disruptor 50 List: 0

Persephone Kavallines

Digital health-care start-up Ro is ramping up in a booming market that has been propelled by a pandemic-accelerated trend toward virtual doctors' appointments, telemedicine for convenience, and an overall increase in the focus on personal health.

The company's flagship business brand Roman started in 2017 selling men's health-care products such as erectile dysfunction medication and hair loss remedies. Today, Ro provides a range of services from at-home diagnostics to skincare, pharmaceutical, and fertility treatments. Its direct-to-consumer business includes women's brand Rory, stop-smoking service Zero, and medication delivery service Ro Phamacy, which delivers generics on a cash-pay basis for $5. In 2021, Ro opened six pharmacy fulfillment facilities, more than doubling its network to a total of ten, while its Ro Pharmacy business grew revenue by 150 percent with as many as 700 new medications added.

Last year, Ro partnered with diagnostic company Intrivo to make at-home rapid antigen tests available through its platform. As the Omicron variant spread, Ro delivered at-home tests to patients nationally. The company also worked with the NY State Department of Health to launch a Covid-19 vaccine drive and administer vaccinations.

Ro is up against several others chasing this telemedicine digital business which aims to disrupt traditional pharmacies such as CVS Health and conventional health-care insurers like UnitedHealth. The telehealth market is exploding in size, projected by Precedence Research to increase 18.8% yearly to reach $224.8 billion globally by 2030.

Amazon entered the market in 2020 with an online pharmacy subsidiary offering low prices on medication, free delivery, and round-the-clock pharmacists on call. Meanwhile, Hims & Hers, a telehealth company founded in 2017, went public in early 2021 in a $1.6 billion SPAC deal. Another contender is NYSE-listed Teladoc.  

Recent performance has not been kind to public companies in the sector though, with Teladoc suffering huge losses and writing off billions in its acquisition of Livongo, which had been the largest deal in digital health; while Hims & Hers has lost roughly have its value this year.

New York City-based Ro has been on a growth spurt to reinforce its positioning and separate from the pack. This direct-to-consumer company touts its affordable, personalized health care without the need for insurance and its handling of more than 8 million digital healthcare visits across the country.

Those moves have been fueled by venture capital: $150 million raised early in 2022 at a $7 billion mega-valuation from existing investors General Catalyst, FirstMark Capital, TQ Ventures and others following $500 million in 2021 in Series D financing, and $200 million in 2020 led by General Catalyst at a $1.5 billion valuation.

Continuing to invest heavily in distribution, retail partnerships, and new product offerings, Ro bought at-home testing startup KIT in 2021 to combine with its existing diagnostics service Workpath, and also acquired Modern Fertility.  Such deals have helped the company to diversify from its core men's health brand Roman and double revenue from other products.  Additionally, last July, the company launched Ro Mind, for patients suffering from depression and anxiety. The direct-to-consumer digital company also made a major move in teaming up with Walmart to launch its Roman men's line of over-the-counter products for sale at the retailer nationwide.

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