Scoop: Telehealth company Truepill gets swallowed for $525 million
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Digital pharmacy provider Truepill has agreed to be acquired for $525 million by Ireland's LetsGetChecked, Axios has learned from multiple sources.
The big picture: Truepill is a telehealth pioneer, but it's no longer a unicorn.
- Only $25 million of the purchase is in cash, the remainder is in stock, although it includes another $200 million in possible earnouts tied to revenue milestones.
- Hayward, Calif.-based Truepill had raised over $370 million in VC funding, including at a $1.6 billion valuation in 2021, from firms like Optum, Optum Ventures, Oak HC/FT, and Initialized Capital.
- LetsGetChecked, itself a VC-backed company with Optum Ventures on the cap table, plans to raise around $150 million via a convertible note offering to help finance the deal.
Zoom in: Both companies are burning tons of cash, according to internal financial documents, so the goal is to create a stronger business by closing the patient data loop.
- LCG provides at-home testing devices, including for diagnostics that a lot of Truepill customers need. Currently, they get sent to third-party providers like physical labs.
- Combining the two businesses could increase customer convenience while decreasing costs, particularly as health insurers increase their interest in how patients respond to therapeutics like GLP-1 weight-loss drugs.
Details: LetsGetChecked, itself backed by over $200 million in VC funding from Optum Ventures and others, will raise around $150 million via a convertible note offering to help finance the deal. No word yet on investors, except that there will be new ones.
- The combined company, structured as a NewCo, will retain the Truepill name (for now) and most of Truepill's senior management (including CEO Paul Greenall, who gets a $7.25 million forgivable loan).
- That's likely because Truepill is the slightly healthier business, despite being the acquired entity. Truepill lost $15 million on $64 million in revenue for the first four months of this year (increased revenue run rate), while LCG lost $32 million on $39 million in revenue over the first five months of 2024 (declining revenue run rate).
Backstory: Truepill hired bankers in March to shop the company, and received one other bid that was deemed inferior to the LetsGetChecked offer.
- Larry Renfro, the former Optum CEO who runs (and apparently owns) Optum Ventures, recused himself from the ngotiations and board votes.
None of the involved parties returned requests for comment.
The bottom line, per Axios Pro's Claire Rychlewski: This could restore Truepill's original vision of being a one-stop shop with telehealth, diagnostic services, and a white-label pharmacy — something that initially proved too ambitious.
