How does Doximity make money?

Steven Loeb · July 8, 2021 · Short URL: https://vator.tv/n/52a7
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Doximity sell marketing and hiring subscriptions to pharma companies and health systems

A few years ago, it seemed like everyone and their mother was trying to create a new social media company, many of them aimed at niche audiences. There was Bolt, which was marketed for teenagers; Disaboom, which was for people with disabilities; Gogoyoko, a network for musicians; and MyVetwork, which was specifically for veterans. None of them lasted all that long. 

In the end, the winners were the companies like Facebook, Twitter, and LinkedIn, the ones that serve a general audience, with those smaller subsets and specific groups inside of them.

The exception to this rule is Doximity, which is essentially LinkedIn for doctors; the company allows physicians to connect with each other, while also providing them with productivity tools, such as Digital Fax and eSignature, allowing physicians to send and receive HIPAA-compliant faxes, while members can electronically sign, edit, date, add attachments, and customize the fax cover page.

"Our mission is to help every physician be more productive and provide better care for their patients. We are physicians-first, putting technology to work for doctors instead of the other way around. That guiding principle has enabled Doximity to become an essential and trusted professional platform for physicians," the company wrote in its S-1 filing with the SEC

"Our cloud-based platform provides our members with tools specifically built for medical professionals, enabling them to collaborate with their colleagues, securely coordinate patient care, conduct virtual patient visits, stay up-to-date with the latest medical news and research, and manage their careers."

The company has over 1.8 million medical professional members on its platform, which totals more than 80 percent of physicians in the U.S., but it makes no money from them: Doximity membership is free for physicians.

The company's paying customers are healthcare organizations, including pharmaceutical manufacturers, health systems, and medical recruiting firms. They purchase subscriptions for Doximity's Marketing Solutions, Hiring Solutions, and Telehealth Solutions.

Marketing solutions

Doximity’s Marketing Solutions allow its customers to get their brands in front of the medical professionals on the platform.

Customers pay for a subscription for specific modules, which are delivered monthly to a consistent number of targeted Doximity members. Pricing for the company's Marketing Solutions is based on the number and composition of the targeted members, and on the specific modules purchased.

Pharmaceutical manufacturers purchase campaigns on a brand-by-brand basis; that means Doximity arranges marketing campaigns with individual brands within their portfolios of medications. Health systems execute campaigns on a service line by service line basis, which means specific clinical specialties, such as cardiology, oncology, and neurology. 

“As healthcare companies are relatively under-invested in digital, we work closely with our pharmaceutical and health system customers to educate them on the best way to use our platform. We are hyper-focused on the experience of each Doximity member, ensuring that this marketed content is relevant and useful to each member’s practice and patient population,” Doximity wrote.

Marketing Solutions are, by far, Doximity’s largest revenue stream, accounting for more than 80% of revenue in fiscal 2021. 

Hiring Solutions

With Doximity’s Hiring Solutions, health systems and medical recruiting firms pay for subscriptions that allow them to search for, and connect with, medical professionals on the platform. The company uses AI and machine learning so that its customers can run targeted hiring campaigns across a range of medical specialties and subspecialties.

“Our Hiring Solutions enable our customers to identify, connect with, and hire from our network of both active and passive potential medical professional candidates, who might otherwise be missed through traditional recruiting channels. With both a self-service recruitment platform and a full-service offering, we provide our Hiring Solutions customers with a variety of options to meet their staffing needs,” Doximity wrote.

Hiring Solutions customers purchase subscriptions priced based on the number of messages that they want to send, and job openings they want to post.

In addition, Doximity also has a medical recruiting offering called Curative, which it launched after acquiring THMED in June 2016. Curative customers pay on a placement fee basis, and this is the only revenue that Doximity makes that isn't from a subscription.

Telehealth Solutions

Doximity launched the beta version of its telehealth solution in April 2020, before doing a full launch in May.

It consists of two direct-to-member offerings: Dialer Free, which is available to Doximity member at no cost; and Dialer Pro, a premium subscription version of Dialer, which is used by individual Doximity members, and small healthcare organizations. Dialer Pro is $19.99 per month per license, billed annually. One license covers an individual healthcare provider.  

The company also has a commercial Telehealth Solution that is used by health systems and hospitals called Dialer Enterprise; it's sold as a subscription, with pricing based on the size of the health system. 

“Dialer Enterprise enables unlimited access to Dialer for all users across a health system’s organization, and unlocks the same premium feature set as Dialer Pro with an added service layer for the organization that includes a dedicated customer success manager, premium user support, and monthly utilization reporting,” wrote Doximity.

“Health system customers also have the opportunity to brand the user and patient experience as well as leverage their own security and HIPAA requirements to create consistent protocols for use. Our health system team can also integrate Dialer into our customer's electronic medical record system so that their users can access Dialer from directly within their existing clinical workflows.”

Doximity now has subscription agreements signed with over 150 health systems as of the end of March 2021; the company delivered over 63 million telehealth visits in fiscal 2021. Over 90% of U.S. hospitals have Dialer users at their facility, and over 25% of U.S. doctors are covered by a Dialer Enterprise agreement.

Doximity by the numbers

Revenue for the year ended March 31, 2021 was $206.9 million, up 78 percent year-over-year. Subscription revenue from new customers for the year was $13.3 million, while revenue from existing customers grew $62.1 million, or 53%.

Currently, the company’s customers include all of the top 20 pharmaceutical manufacturers, as well as all of the top 20 hospitals and health systems in the U.S. News & World Report Best Hospitals Honor Roll among our customers.

Doximity went public at the end of June, in which it raised $606 million; the company now has a market cap of $8.5 billion. Before its IPO, the company had raised $81.8 million from investors that include Threshold, InterWest Partners, Morgenthaler Ventures, T. Rowe Price, Emergence, and Morgan Stanley.

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