Not fairly 18 months after being named CEO of Truepill, cofounder Sid Viswanathan is gone. The corporate, price $1.6 billion at its final fairness funding spherical, faces an unsure future with a money squeeze and DEA investigation.
Truepill cofounder Sid Viswanathan is out as CEO of the tech-enabled pharmacy as the corporate’s troubles mount.
“Earlier this week was my final day as CEO of Truepill,” Viswanathan wrote in a LinkedIn put up earlier at the moment. “This month marks 9 years since I left my final job to pursue a loopy startup thought with Umar Afridi. It has been nothing in need of an exhilarating journey filled with all of the ups and downs you’ll anticipate, after which some.”
The San Mateo, California-based firm has not publicly named a brand new substitute. Truepill didn’t reply to requests for remark. Paul Greenall, the corporate’s president, would appear to be the plain candidate to be CEO or performing CEO. He joined the corporate as chief enterprise officer final July and was promoted to president later within the yr. Greenall didn’t reply to requests for remark.
Viswanathan stated in his LinkedIn put up that he was “actually proud” of what they’d constructed at Truepill and that he had “no clue” what he could be doing subsequent. “I’ll be taking a while off to recharge and determine the following chapter,” he wrote. Viswanathan didn’t reply to voicemail, textual content or e-mail messages looking for extra remark.
Forbes first profiled Truepill as a part of the Subsequent Billion-Greenback Startups listing in 2019, an oddity within the listing because it had raised simply $13 million in enterprise funding on the time. Viswanathan, an Indian immigrant who bought his earlier startup to LinkedIn, and Afridi, a former pharmacist who was then the corporate’s CEO, got down to upend the closely regulated pharmacy enterprise with expertise. The startup shipped its first prescriptions in 2016. By 2018, its income had reached $48 million, helped by the quick development of direct-to-consumer clients like Nurx, which sells contraception, and Hims, which focuses on cures for hair loss, erectile dysfunction and zits. To customers, these Instagrammable well being merchandise don’t seem like medication, and their subscription packing containers typically include a mixture of each prescription and over-the-counter merchandise. But when there’s even a vial of prescription capsules going out within the mail, the startup sending it wants a pharmacy to meet the order.
By 2019, the corporate had doubled its income to practically $100 million because it expanded its buyer base past direct-to-consumer medicines to prescriptions that deal with extra critical diseases. It anticipated nearer to $200 million in income for 2020.
The massive guess, after all, was telemedicine. Because it seemed to extend past pharmacy, it rolled out at-home testing companies, for instance, only one piece of what Viswanathan and Afridi believed could be a broad change to on-line healthcare. “We envision a future the place 80% of healthcare is digital,” Viswanathan advised commerce publication Fierce Healthcare in 2020.
In October 2021, the corporate raised a $142 million Collection D at a $1.6 billion valuation. At that time, the corporate had raised a complete of $256 million in fairness funding from traders that embrace Initialized Capital and TI Platform Administration.
However competitors has gotten more durable as different tech-enabled pharmacies, like Alto and Capsule, have cropped up. Simply over a yr later, Truepill wanted one other infusion of money, elevating $50 million in convertible debt in November 2022, in line with venture-capital database PitchBook. It has since confronted different difficulties because it has been quickly burning via money–at a charge of $12 million per thirty days–in line with a Could 2023 article in Insider. It carried out 4 rounds of layoffs and closed three of its pharmacies, whereas downsizing a fourth, in line with Insider’s reporting.
The issues ran deeper than only a money squeeze because the startup additionally got here beneath scrutiny from the federal authorities. In 2022, the U.S. Drug Enforcement Company alleged that Truepill had “wrongfully crammed” 1000’s of prescriptions for managed substances, together with the ADHD medicine Adderall, a stimulant. The investigation stemmed from Truepill’s work filling prescriptions for the Softbank-backed psychological well being startup Cerebral, which was beneath investigation by the U.S. Division of Justice over its prescribing practices. The DEA alleged Truepill was filling prescriptions in extra of 90-day provide limits, in addition to prescriptions written by suppliers with out the correct state licensing. “We’re assured we will reveal the absence of wrongdoing,” Viswanathan advised The Wall Avenue Journal in December. (The DEA didn’t reply to a request for an replace on the standing of the investigation.)
When he left the corporate, Viswanathan had been CEO for just below 18 months. He took over as CEO from Afridi in February 2022. Afridi left Truepill at that time, in line with his LinkedIn profile. Afridi didn’t reply to an e-mail message looking for remark. On the time Viswanathan took over, the corporate stated that it had processed greater than two million diagnostic checks, shipped greater than 10 million prescriptions and was facilitating as much as 50,000 telehealth visits per week.