Telemedicine Provider DirectDerm Leverages Revenue-Based Finance in Series B Round
PALO ALTO, CALIFORNIA
DirectDerm, a leading Palo Alto-based telemedicine company which previously announced the first closing of its Series B financing round, announced that a significant portion of the round was raised via revenue-based finance. The revenue-based finance was supplied by Salt Lake City, Utah and Palo Alto, Calif.-based Decathlon Capital Partners.
DirectDerm chose to supplement the equity portion of its round with revenue-based finance due to its flexibility. In addition, the use of this financing was non-dilutive. Unlike traditional debt financing, revenue-based finance is paid off through monthly payments of a pre-determined percentage of revenues. It allows for fluctuations in the business — both positive and negative. Finally, due to the tranched drawdown structure, DirectDerm will borrow only what it needs.
“DirectDerm was seeking a creative financing partner to allow it to increase the size of its round without triggering additional equity dilution,” said DirectDerm CEO David Wong. “Decathlon’s solution allowed us to achieve that while giving us future financing flexibility as well through the ability to draw down funding at a later date.”
DirectDerm will use the funding to expand into new geographic territories and enhance patient services. The investment will help DirectDerm reach the millions of patients that can benefit from a rapid and thorough board-certified dermatologist consultation and help DirectDerm continue solving the lack of access that rural, suburban and urban Americans face when trying to arrange appointments with high-demand dermatology specialists. DirectDerm specifically addresses patients who would otherwise receive delayed diagnoses or no dermatological treatment at all by connecting them through digital means.
“Healthcare is transforming before our eyes, and DirectDerm is perfectly positioned to deliver the immediacy, convenience, cost-effectiveness and access that today’s healthcare consumer demands. Growth, however, takes capital and working with Decathlon allowed us to maximize our capital raised,” said Brad Galle, DirectDerm’s COO.
“Revenue-based financing gives DirectDerm the upfront capital it needs to gain market share and reach new patients without disrupting the ownership structure that has served the company so well,” said John Borchers, managing partner of Decathlon Capital.
DirectDerm brings expert skin care directly to patients wherever they may be. Our leading, board-certified dermatologists provide diagnosis, treatment and follow-up care for all skin conditions, from the common to the complex, including rashes, skin growths, hair and nail problems, and skin cancers. Our patients get accurate answers right away because healthy skin and peace of mind are what we’re all about. Learn more at https://www.directderm.com.
About Decathlon Capital Partners
Decathlon Capital Partners provides growth capital for companies seeking alternatives to traditional equity investment. Through the use of highly customized revenue-based financing solutions, Decathlon provides long-term growth capital without the dilution, loss of control and operational overhead that often comes with equity-based funding. With offices in Palo Alto and Park City, Decathlon is the largest revenue-based funding investor in the U.S. and is active across a wide range of sectors. Learn more at https://www.decathloncapital.com.