New York’s ZocDoc Scores $50 Million from Russia’s Yuri Milner, Plots Nationwide Expansion of Doctor-Finding Service
Amid news yesterday that Russian billionaire Yuri Milner’s DST Global had poured $400 million into Twitter, another DST investment may have been easy to overlook. ZocDoc—a New York-based startup that allows patients in nine cities to book their doctors’ appointments online—scored a $50 million investment from DST. The Series C funding was a major coup, and brought in a new investor for ZocDoc, which previously raised $20 million from Khosla Ventures, the Founders Fund, SV Angel, Amazon’s Jeff Bezos, and Salesforce.com’s Marc Benioff.
ZocDoc’s website, which started in 2007 as a service in New York, allows patients to search for doctors by name, specialty, location, or insurance provider. Patients can then schedule appointments with a few clicks. With the new funding, ZocDoc plans to expand nationwide, says co-founder and CEO Cyrus Massoumi.
DST’s Milner is one of the most renowned investors in technology, with a portfolio that includes Groupon, Zynga, and Facebook. Massoumi says SV Angel’s Ron Conway introduced Milner to ZocDoc about a month ago, and the investment decision flowed from there. “Having one more great investor is a privilege,” Massoumi says. “Look at their portfolio. They represent the leading edge of the Internet.”
Massoumi was inspired to start ZocDoc after he suffered a busted eardrum on a plane flight in 2007, when he was working as a consultant for McKinsey & Co. He scoured his insurance company’s website and worked the phone, but it still took him four days to get an appointment. All this whilehe was in pain and unable to hear out of the ear. “It was ridiculous,” he recalls. “New York has more doctors per capita than any other city in the world. I was already doing everything on the Internet. I figured making a doctor’s appointment is one of the most important things I could do in life.”
ZocDoc is free for patients. The company charges providers $250 a month to participate. Despite the expense, doctors are coming to ZocDoc and requesting the service, Massoumi says. The company uses a crowd-sourcing approach to decide where to launch the service next. “People come to the site and vote for cities,” Massoumi says. Atlanta was the most recent addition. When asked to quantify ZocDoc’s growth, Massoumi says that the number of appointments available to be booked on ZocDoc grew from 5,000 in 2007 to 2 million in February of this year. There are now 5 million open appointments on the site.
Popularity aside, ZocDoc does have some competition. Several health systems have launched their own online platforms for communicating with patients. Weill Cornell in New York City, for example, offers its patients access to a website called Connect. Patients can go there not only to schedule appointments, but also to see a list of the medications they’ve been prescribed and the medical tests they’ve had. They can even send e-mails to their Weill Cornell doctors through the site.
Massoumi says ZocDoc can exist harmoniously with individual providers’ sites. “Is Delta’s own website competitive with Expedia? Sort of,” he says. “But it’s also complimentary.” He adds that DST investment Groupon spawned hundreds of clones, but that Groupon is still the number-one daily deals site in most cities. “We want to learn from that,” he says.
Massoumi takes pride in the fact that ZocDoc was the first tech company to be named by Crain’s New York as the best place to work in the city. As ZocDoc grows—it has expanded from 36 to 150 people in the last year and is looking to hire many more—Massoumi says he’ll be careful to maintain the company’s friendly culture. That was evident yesterday, when ZocDoc flew Milner into New York, so he could deliver the funding news to the company’s employees personally, before it was announced to the press. Says Massoumi: “Everyone was wowed.”