Health tech startup Fabric acquires Walmart’s telehealth business

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Dive Brief:

-- Health technology startup Fabric is acquiring Walmart’s telehealth assets as the retailer exits its healthcare delivery business.
-- Fabric, which offers patient intake, care navigation and telehealth services, said Friday it purchased Walmart’s MeMD for an undisclosed amount. MeMD, which Walmart acquired in 2021, provides virtual behavioral, urgent and primary care benefits for 30,000 corporate partners and five million members.
-- Walmart said in April it would close its healthcare business, citing a challenging reimbursement environment and growing operational costs that limited profitability.
Dive Insight:

Fabric, formerly known as Florence, said the deal will expand its products for employers and payers and better position the startup to compete in virtual care.

The company will acquire MeMD’s existing customers, lines of business and the majority of its employees, Fabric CEO and founder Aniq Rahman told Healthcare Dive over email. MeMD CEO Bill Goodwin will also join Fabric. The virtual care company will operate independently and continue to offer its full line of services.

The deal isthe third recent acquisition for Fabric. Last year, Fabric bought telehealth company Zipnosis from Bright Health, a former insurtech that was shedding assets as it exited the insurance business. In January, the startup said it had purchased Gyant, an artificial intelligence care assistant.

Fabric closed a $60 million Series A funding round led by General Catalyst in February.

The latest telehealth acquisition comes amid recent turbulence in the telehealth sector, as fewer people utilize virtual care after a spike during the COVID-19 pandemic, and vendors struggle to monetize their businesses.

UnitedHealth’s Optum said it would shutter its telehealth unit this spring, around the same time Walmart announced it would close its clinics and virtual care unit — once a major investment for the retailer.