A startup that could be Amazon's next takeover target just raised $50 million to help people manage their prescriptions

Matt & Jamie Alto

Alto Pharmacy, a pharmacy that delivers medications in San Francisco, Los Angeles, and California's Orange County just raised $50 million to expand its reach.
The funding comes from investors including Greenoaks Capital, Zola Capital, and Jackson Square Ventures.
The plan is to use it to expand Alto's geographical presence and to go deeper into caring for particular conditions such as HIV.

A pharmacy that wants to deliver prescription drugs and help manage chronic diseases just raised an additional $50 million.

The San Francisco-based Alto Pharmacy, which uses couriers to deliver medications from its brick-and-mortar locations, said Wednesday that it had raised the funding from investors including Greenoaks Capital, Zola Capital, and Jackson Square Ventures, bringing its total raised to $73 million.

Alto CEO Matt Gamache-Asselin told Business Insider the funding would be used for three purposes: expanding geographically; broadening the conditions the company could help patients manage; and running clinical trials to validate whether the startup's approach could improve patients' health.

It's a goal other pharmacists are exploring as well. Business Insider has spoken with pharmacists who, under pressure from retail pharmacies and players like Amazon, have gotten creative and are looking to get paid for providing healthcare to their customers, rather than solely for the pills they dispense.

Here's how that works for Alto: Doctors can send prescriptions to a retail pharmacy or to Alto. From there, Gamache-Asselin said, the company has built software to see whether more affordable alternatives are available. Alto hopes that identifying cheaper medications will make patients with chronic conditions — such as HIV — keep taking them, thereby keeping patients healthy and saving health plans money.

Gamache-Asselin said Alto was already working with some health insurers, though he declined to disclose which ones. In June, Alto brought on an Amazon alum, Scott Shaw, as its vice president of care to head up that operation.

Delivery medications

Alto, which was founded in June 2015, isn't alone in the business of prescription delivery via couriers. Others, including the New York City-based Capsule, which has raised $70 million in funding, are taking a similar approach to getting folks their medications. Independent pharmacies as well as retail giants like CVS Health have also been exploring ways to deliver medications to people at home.

Right now, Alto can send out couriers to about a 50-mile radius from its pharmacies in San Francisco as well as Los Angeles and the neighboring Orange County. It's also planning to launch into mail-order services.

In July, analysts at Bernstein identified Alto as a likely acquisition target for companies such as Walmart, CVS, or Amazon.

Amazon in June acquired the online pharmacy PillPack, launching it into the prescription-drug business. PillPack mails prescriptions that are packaged together based on when they need to be taken, putting it in a good spot to handle prescriptions for elderly people who tend to have more prescriptions. That could still leave room for Amazon to pick up another pharmacy startup that has a more on-demand approach.

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