Doximity Raises Another $54M to Pursue LinkedIn’s Business Model, Too
Doximity, known as the LinkedIn for doctors and a frequent Health 2.0 participant, raised $54 million in a Series C funding round led by T. Rowe Price and Draper Fisher Jurveston with participation from Morgan Stanley Investment Management
Doximity claims more than 40% of US physicians as active users, and in January of this year announced that their physician network has grown to more than 250,000 members. Doctors can use Doximity to collaborate on cases, further their careers, and stay up to date on specialty-specific news, but that’s not where they make their revenue.
“There are a lot of things we can do to make medical networking more efficient,” Doximity CEO Jeff Tangney told Health 2.0 when asked how the funds would be used. “If you think about it, how would your life be different if you weren’t able to use email in your job? How out of touch would you be? That’s what it’s like to be a US physician. We see a lot of opportunity to improve the connectivity of physicians as a new business area.”
Like LinkedIn, Doximity is a recruiting tool for people looking to hire doctors. Tangney didn’t reveal all the numbers, but he did say that Doximity was cash flow positive in January for the first time. He also said that Doximity has 55 employees, somewhere around 200 hospital clients, and that a subscription to the recruiting product costs $12,000 per seat per year to send 50 messages per month. With some back of the envelope math, and a guess of a burn of about $10-12 million a year, it figures out to about four subscribed seats per hospital. With about 5,000 hospitals in the US and some other revenue streams to pursue, it looks like Doximity has room to grow at a bare minimum.
According to Tangney, more than 20,000 peer to peer messages are sent on Doximity each day, more than 92,000 job offers have been sent to Domixty members since January 2013, and the company is on track to count half of us physicians as members by summer 2014. In other words, physician members are using Doximity predominantly to send personalized messages to doctors they know and trust, while recruiters are able to make targeted offers, identifying doctors based on specialty, past experience, and geography.
Based on these numbers, Doximity seems to be having some success connecting doctors beyond pagers and fax machines, but as many of us know from experience with other networking sites, being a member is not the same as being an active user. Tangney said that for Doximity, “active user” refers to physicians who have joined the network and been verified and authenticated (this is where they claim 40% of US physicians). Of those users, Tangney said “a good chunk” engage on a weekly basis, while “a very good chunk” engage on a monthly basis.
While Doximity’s “active user” may not be messaging all their doctor buddies on the system everyday, from the point of view of a recruiter looking at resumes, that doesn’t really matter. In the end, Doximity’s definition and count of “active users” may be the one number that matters. After all, just like LinkedIn, it’s the size of the network that counts. An email from a recruiter will probably grab a physician’s attention regardless of whether they take advantage of Doximity’s other tools.
Moving forward, Tangney said he and his team see continued opportunities in using their network to improve credentialing and other processes involving communication and coordination.
“We’d like to see this world grow, we’d like to see more doctors being able to connect easily, and talk about better care,” Tangney said. “We are on our way to building a network that makes it easier for doctors to connect with each.”