Teladoc-Livongo make the first combined sale to Guidewell Health

• Teladoc and Livongo have made their first joint venture, Jason Gorevic, CEO of Teladoc, and Glen Tullman, founder of Livongo, said at the HLTH virtual conference on Monday.

• Guidewell Health, a mutual insurance holding company and the parent company of the Florida Blue Plan, has been a Teladoc customer for several years. It will now offer the Livongo diabetes platform to 50,000 Florida Blue members at no additional charge. This marks the first commercial cross-sell agreement for the two companies since their merger was announced in August.

• Executives say there is more customer interest behind the scenes of the combined company that has not yet been publicized. “There are a lot of buyers. There is a lot of interest,” said Tullman. “This appears to be the largest and most prestigious that we have announced so far.”

Virtual health giant Teladoc bought Livongo, a chronic care management company, in August for $ 18.5 billion. The deal is still ongoing, but Livongo has signed a dealership agreement with Teladoc to expedite sales, according to a press release.

Florida Blue is currently offering Teladoc virtual support to its members. Now select members can access Livongo’s diabetes platform, including attached devices such as blood glucose meters and telemedicine visits, through Onlife Health, Guidewell’s loyalty, and health coaching platform.

Gorevic and Tullman said Monday they are seeing positive responses from existing customers to the joint offerings.

And there is room for Teladoc and Livongo to adjust to other conditions and members within the plan. The Florida Blue nonprofit plan covers approximately 4 million members in 16 states, according to American health insurance plans from the payer lobby. Parent company Guidewell, headquartered in Jacksonville, reaches around 27 million people in 35 states through multiple offices.

The largest digital health merger in US history initially shocked Wall Street. Many investors argued that Livongo’s valuation was inflated, the deal was accelerated, and the long-term sustainability of telemedicine use was not a sure thing. Since then, Teladoc stocks have rallied slightly, although they haven’t yet returned to their all-time highs from early August.

Top executives from both companies said in August that they need more time to demonstrate the combined company’s value proposition, which according to Piper Sandler will have sales of $ 1.3 billion this year and valued at approximately $ 37 billion in Dollar forecast.

The overlap of companies in the customer base is only 25% as they operate in completely different markets or in the same market with different customers. This creates significant cross-sell opportunities for Purchase, New York-based Teladoc, to the majority of its 70 million US members.

In August, Livongo had more than 1,300 customers, including more than 30% of the Fortune 500 Company and four of the seven health insurance companies. It rose to around 1,250 in March.

Analysts also predict the massive deal could jump-start larger digital health deals as telemedicine competitors try to keep up with Teladoc and chronic care companies look to expand their suite of applications.