Sermo, After Raising $40M+, Bought by WorldOne For Undisclosed Sum
Cambridge, MA-based Sermo, the provider of an online physician community, announced today that it has been acquired by New York-based healthcare insights company WorldOne. The purchase price of the deal was not disclosed.
Sermo has pulled in at least $40 million since being founded in 2005. It raised a $26.7 million Series C round in 2007, which brought its funding total to $39.5 million, and added another $3.5 million in growth capital last year from MMV Financial. Its investors include SoftBank Capital, Longworth Venture Partners, and Legg Mason Capital Management.
The company had already been through some pretty significant changes in the last six months. In January, news surfaced that founder and former CEO Daniel Palestrant left the company to work on a new Web startup, par8o, which is developing software to improve the efficiency of the medical referral process. Par8o started as a project within Sermo, Palestrant explained to me in an interview, and also brought with it Sermo’s former chief medical officer Adam Sharp and a handful of other employees working on the project.
In March, Sermo hired new CEO Tim Davenport, the former president of Revolution Health, a consumer health website backed by AOL founder Steve Case and later merged with Everyday Health. The company had also been expanding its revenue model, last year allowing entities like pharmaceutical companies to pay for sponsorship and premium content on the Web platform, and inking a deal in March with the Joslin Diabetes Center to bring its online education tools to the Sermo physician community.
“As Sermo grew the most vibrant online physician community in the U.S. and, more recently, provided clients more robust research and promotion opportunities, clients asked for global reach and more key specialists,” said Davenport in the news release. “WorldOne adds both of these overnight, while Sermo greatly augments WorldOne’s online and interactive business.”
Sermo vice president of marketing and membership Jon Michaeli said that the Sermo community previously represented about 20 percent of doctors, while the acquisition gives them almost three times that reach and will give pharmaceutical companies more exposure as they advertise new drug products through the platform. The new online community from WorldOne (and its partner Physicians Interactive) will now include 350,000 physicians, after bringing on the 130,000 community members Sermo had amassed in its seven-year history. “The plan is for the Sermo platform to continue to exist and grow,” Michaeli said, noting it will remain under the Sermo name “for the foreseeable future.”
He didn’t share exactly how much of Sermo’s workforce will continue working at the acquiring company, but said that “key members of the management team from Sermo who are involved in the day-to-day operations of the community will be joining WorldOne.”
Davenport, Sermo’s CEO, was not immediately available for comment at the time of publishing, but I’ll update this space if we get any additional detail from him.