Insurer nib takes third bite of online scripts startup Midnight Health, pledging $24 million for 77% stake

Brisbane online prescription startup Midnight Health has raised $15 million in a Series B with ASX-listed insurer nib stumping up the cash for a third time 19 months to own more than three-quarters of the business.

nib’s investment comes as regulators crack down on the sector, forcing medtech companies to shift from online applications for prescriptions to a phone or video consultation with a doctor before a script is issued. The changes kick in from September.

Midnight Health previously raised $12 million in a Series A funded by nib (ASX: NHF) in August last year. That raise valued the health ailments solutions brand builder at $48 million. nib chipped in an initial $4 million investment in November 2021. The insurer has also promised an additional $9 million in top up funding for the Series B in FY2024 if the startup meets a series of performance targets. Having tipped $40 million in, nib will hold a 77% stake in Midnight Health.

Midnight Health offers 27 products for home delivery across three brands, from the morning after contraceptive pill to thrush, sleep problems, erectile dysfunction, blood pressure, smoking, weight and hair loss and skin conditions.

Rival telehealth brands startup Eucalyptus recently raised $50 million from the likes of Woolies, Mary Meeker & Blackbird on a $520 million valuation.

The fresh capital will be used to help the business expand, including building scale, further developing its IT, and service platforms.

Midnight Health was founded in late 2020 by Nic Blair and Matt Anderso and launched in February 2021.

From a customer base of more than 30,000 people in August last year, Blair said they’ve serviced more than 85,000 Australians with electronic scripts, and pharmacy home delivery alongside 100,000-plus doctor consults since launch.

“This latest investment will allow us to accelerate growth, develop new services and bring our innovative healthcare solutions to more patients across Australia as we work to change the way care is delivered,” he said. 

“Midnight Health brings equity to people around healthcare, whether they live in the bush or a big capital city.”

nib managing director, Mark Fitzgibbon said the company building an ecosystem of technologies and assets, such as Midnight Health, for people to personalise their healthcare needs through the insurer.

“It’s an exciting and important endeavour, especially when you consider the fragmentation within healthcare,” he said. 

“nib views the range of Midnight Health products and services as key elements in its vision to become as much a health management company as we are a leading health insurer.”

The insurer also has stakes in health data venture Honeysuckle and gut testing medtech Microba, which both have partnerships with Midnight Health.