Doximity’s IPO Mints A New Healthcare Billionaire

The explosion of social networking IPOs over the past decade—Facebook, LinkedIn, Snapchat and more—minted a new class of tech billionaires capitalizing on personal and professional connections through digital platforms. But the latest member of the club took a more targeted approach by developing a social network for the healthcare industry. That company, San Francisco, California-based Doximity, is often described as a “LinkedIn For Doctors.” Doximity ended its first day of trading at $53 per share last Thursday, more than double the $26 per share it priced its IPO. That public debut catapulted cofounder and CEO Jeff Tangney, 48, who launched the company in 2010, to billionaire status thanks to his 32.9% stake, worth $2.8 billion as of Tuesday’s close.  

Doximity doesn’t charge its more than 1.8 million members, including doctors, nurse practitioners, physician assistants and medical students, to use its platform to post their professional credentials and network with each other. Instead, the company generates the majority of its revenue from pharmaceutical company and health system customers who want to target marketing campaigns to this specialized group. It also offers digital recruiting services and enterprise telehealth services. Doximity reported net income of $50.2 million on $206.9 million in revenue in the fiscal year ending March 31, 2021. Its revenue grew 78% percent year-over-year from $116.4 million in the same period last year.

The name Doximity is a combination of “doctors” and “proximity,” according to a note from Tangney and his cofounders Nate Gross and Shari Buck included in the prospectus. “We work to bring digital proximity to medicine through a secure, real-name platform accessible to any physician at any time on their smartphone,” the cofounders wrote in the letter. “In short, we strive to lessen the hassle of being a physician.” One of the unique features of the IPO was that 15% of shares were reserved for Doximity’s doctor members. The company’s NYSE Ticker is “DOCS.” A spokesperson said Tangney was unable to comment due to the 25-day IPO quiet period. 

Doximity’s platform includes secure voice, messaging and digital faxing capabilities. In 2020, it launched an enterprise voice and video telehealth solution, which saw rapid adoption during the Covid-19 pandemic with more than 150 health systems signing on for subscriptions and over 63 million telehealth visits conducted through March 31, 2021. 

While digital health funding and valuations have soared during the Covid-19 pandemic, Doximity has been relatively under the radar, since it hasn’t raised any venture funding since 2014. That $54 million Series C round gave Doximity a $355.3 million post-money valuation, according to PitchBook. 

Tangney was previously a cofounder of Epocrates, a medical reference app company launched during the dot-com bubble in 1999. He left the company in 2010, prior to its IPO and subsequent sale to Athenahealth for $293 million in 2013. “I learned two things from Epocrates — don’t lose the focus on doctors and celebrate the journey,” Tangney told Forbes contributor Peter Cohen last week. “At Doximity, we put doctors first. We help them be more productive. We also enjoy the journey.”