SoftBank leads Alto Pharmacy funding
Silicon Valley-based digital drug delivery firm offers platform to fill prescriptions
SoftBank’s second Vision Fund has led a new round of funding for Silicon Valley-based drug delivery firm Alto Pharmacy that valued it at more than $1 billion, according to two people familiar with the development.
SoftBank’s Vision Fund II contributed a majority of the funding round that totals around $250 million, according to both people. At one point, the fund considered investing as much as $300 million, but eventually decided to limit its exposure, they said.
Other existing investors including Greenoaks Capital and Jackson Square Ventures also participated in the Series D round, the sources said.
Alto, a digital pharmacy that delivers prescriptions to patients in several cities in the US, is expected to announce the deal next week.
The Alto Pharmacy investment comes at a challenging time for SoftBank. A number of its portfolio companies have struggled in recent months, most notably WeWork, which scrapped its IPO last year and needed an over $10 billion bailout from SoftBank to stay afloat.
Since SoftBank launched the first Vision Fund in 2017, both funds have typically written out checks ranging from $100 million to several billion dollars. So far, its largest bets have been on office sharing firm WeWork, ride-hailing giant Uber Technologies and Chinese ride-hailing firm Didi Chuxing.
Venture-backed online pharmacies have been challenging traditional pharmacy chains over the past few years and Alto’s rivals include Blink Health and PillPack, which was acquired by Amazon in 2018.
Alto was founded in 2015 as Script
Dash and rebranded itself in 2017 after it raised $23 million from Greenoaks Capital, Jackson Square Ventures and other investors. With the latest round, Alto has so far raised more than $350 million.
The funding for Alto, which has moved beyond its delivery roots and now offers doctors and clinics a technology platform to fill prescriptions, is one of the first significant investments for SoftBank’s Vision Fund II, for which the Japanese tech giant continues to seek funding.
Alto Pharmacy did not immediately respond to requests for comment while SoftBank declined to comment.
Valuations at the first $100-billion Vision Fund’s sprawling portfolio have come under increased scrutiny as investors have questioned its founder and chief executive Masayoshi Son’s outsized bets on cash-burning, technology start-ups.
While its Vision Fund II is already making deals, SoftBank is struggling to complete fundraising for the vehicle, despite an initial announcement that it had lined up commitments of about $108 billion from a wide range of investors, including Foxconn Technology Group, Mizuho Bank, Sumitomo Mitsui Banking Corp and MUFG Bank.
SoftBank, however, has continued to back technology start-ups in recent weeks.
Earlier in January, food-tech start-up Memphis Meats received $161 million from SoftBank Group along with other investors, while Internet of Things firm Skylo said it raised $103 million from investors led by the SoftBank Group, which invested directly in the start-up.