Synergy Health Network

Growth Stage

The Efficient Delivery Of Wellness To People Everywhere

Analytics

Platform

Rialto Markets

Start Date

05/10/2022

Close Date

10/26/2022

Min. Goal

$10,150

Max. Goal

$1,068,998

Min. Investment

$290

Security Type

Equity - Common

Funding Type

RegCF

Series

Pre-Seed

Price Per Share

$2.90

Pre-Money Valuation

$29,000,000

Location

Sarasota, Florida

Industry

Healthcare & Pharmaceuticals

Tech Sector

HealthTech

Distribution Model

B2B/B2C

Margin

High

Capital Intensity

Low

Business Type

High Growth

Synergy Health Network, with a valuation of $29 million, is raising funds on Rialto Markets. It is a telehealth company that aims to advance the efficient delivery of wellness to people everywhere. The company has a team of dedicated medical specialists who handle medical situations rather than AI being used by everyone else. Synergy Health Network has a proven revenue of $4.2 million and a proven profit of $1.5 million and expects to grow fast in the coming years. Brian Weinstein founded Synergy Health Network in November 2021. The current crowdfunding campaign has a minimum target of $10,150 and a maximum target of $1,068,998. The campaign proceeds will be used for operations and fulfillment, marketing, legal fees, and fixed expenses.

Summary Profit and Loss Statement

Most Recent Year Prior Year

Revenue

$4,261,093

$23,550

COGS

$1,155,482

$0

Tax

$2,581

$0

 

 

Net Income

$2,321,957

$0

Summary Balance Sheet

Most Recent Year Prior Year

Cash

$883,876

$1,000

Accounts Receivable

$75,442

$0

Total Assets

$2,051,318

$1,000

Short-Term Debt

$58,097

$0

Long-Term Debt

$0

$0

Total Liabilities

$58,097

$0

Financials as of: 05/10/2022
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Ratings KingsCrowd Startup Rating Methodology Article

Analyst Report Analyst Report Methodology Article

Synopsis

For decades, Americans have been trudging to the doctor’s office for all manner of mild illnesses and simple diagnoses. Patients used to have to make a trip to the doctor for even the simplest of needs, like refilling an existing prescription. Telehealth services were few and far between. Then the COVID-19 pandemic began. Suddenly, it was dangerous to leave home and visit healthcare facilities, so the medical industry had to adapt. Telehealth and virtual doctor’s visits boomed at astonishing rates. Even now, as the pandemic wanes, telehealth utilization has stabilized at 38x pre-pandemic rates.

Synergy Health Network seeks to capitalize on the telehealth boom. Founded in November 2020 as a solution for virtual COVID-19 care, Synergy has since evolved into a telehealth platform offering a number of medical services, from ongoing COVID-19 care to men’s health, primary care visits, and more. Patients can book their virtual primary care appointments directly with Synergy, offering more flexibility and direct access without the insurance middleman. 

Synergy Health Network’s current raise on Rialto Markets has been rated a Deal to Watch by the KingsCrowd investment team. 

Price

Synergy Health Network is offering equity at a $29 million valuation. That seems like a high price for a company that has been around for less than two years, but Synergy has had impressive revenue results in that time. In 2021, essentially Synergy’s first year of operations, the company brought in an astonishing $4.3 million in revenue. Plus, Synergy’s telehealth system is apparently software enabled, meaning that software industry revenue-to-valuation multiples are reasonable for this business. Synergy has an excellent 6.8x revenue-to-valuation multiple. With all of that in mind, a $29 million valuation is a fair price for investors.

Market

Synergy Health Network was founded in direct response to a healthcare need, and that demand continues to create a lucrative market opportunity. The US telehealth market was valued at $23.5 billion in 2021, but it’s the growth rate that’s truly impressive: a projected 44.4% compound annual growth rate from 2022 to 2028. The boom in the telehealth market is driven by the COVID-19 pandemic, a major shortage of primary care physicians, and increased acceptance of virtual healthcare solutions on the part of insurers (both government and private). 

While a number of large and small healthcare providers have rushed to improve their telehealth offerings in recent years, particularly in light of the COVID-19 pandemic, Synergy appears to have been an early leader in capturing demand. As Synergy continues to expand its patient network and the number of services it provides, its addressable market opportunity increases rapidly. Synergy needs to tread carefully due to the sensitive nature of handling patient information, but it seems the company hasn’t had any trouble so far. Though there is stiff competition in this market, it’s not a winner-take-all industry, so Synergy has a significant opportunity to continue generating revenue. 

Team

Synergy Health Network was founded by Brian Weinstein, a registered nurse practitioner. He has more than a decade of nursing experience and began offering virtual healthcare appointments during the COVID-19 pandemic. Demand for his services quickly exceeded his personal capacity to offer care, so he incorporated Synergy to scale his offerings. Within a year, Synergy was servicing thousands of patients and generating millions in revenue. (It’s worth noting that Weinstein’s LinkedIn page doesn’t list Synergy specifically, instead stating that Weinstein has been the CEO of an entity called “Live CEUs” for almost 15 years. It’s not clear how Live CEUs is related to Synergy, if at all.) Weinstein has a certificate of professional nursing from Case Western Reserve University and a master’s degree in nursing from North Park University.

Weinstein has since brought on several additional executives to lead Synergy. These include President and CEO Dan Dembicki, who offers business expertise to complement Weinstein’s medical training. Dembicki has a master’s degree in business from Central Michigan University and more than 30 years of business experience, namely in sales and marketing. He most recently served as the co-founder and CEO of another enterprise called Ag-Tech Blends, a fertilizer company that seems to have closed after less than two years in business. 

Also on the Synergy leadership team is board of directors member and Chief Investment Officer Joseph Dunhill. Dunhill graduated from Harvard Business School and has almost 20 years of experience in finance, namely bankruptcy and valuations. 

Elizabeth Klein is Synergy’s chief operating officer. Her LinkedIn page doesn’t offer any details about her professional background. According to the offering circular, she previously held CFO and COO roles at food service and transportation companies. 

Lastly, Jholet Tabuena is Synergy’s chief strategy officer. She has a Bachelor of Arts in communications, a Master of Science in marketing communications, and more than 20 years of business expertise, mostly in account management. Tabuena also has almost six years of experience owning a business, Kooky LLC.

It’s worth noting that Synergy’s expense line item for salary and wages is very low for 2021, only $92,184. By contrast, contractors were the largest expense category at $416,401. It’s possible that Synergy is paying some or all of these five senior executives as contractors, meaning that they may not be fully committed employees. 

The Synergy team includes a medical practitioner alongside several other businesspeople. These complementary skill sets make a more balanced team and should help smooth out Synergy’s operations. However, while this team has several decades of combined professional experience, no one has particularly impressive credentials or successful entrepreneurial experience. Overall, the team is neither a major red flag nor a compelling competitive advantage for this company.

Differentiators

Synergy Health Network has limited competitive differentiation. Through its services, patients can go online and book appointments on their own schedule. However, other well-funded companies — like One Medical and MyChart — also offer these services. The ability to book a variety of services, from COVID-19 care to men’s health, is also similar to other telehealth companies’ offerings. 

On the basis of price, Synergy’s services actually seem more expensive than many comparable offerings. For instance, One Medical offers a primary care membership for $199 per year, while Synergy’s offering is $79 per month. Overall, it’s unclear why a patient would choose Synergy instead of the large number of other telehealth platforms that are better known and often cheaper. 

Performance

Synergy Health Network’s performance since its founding in November 2020 is rather stunning. The company generated $4.3 million in revenue in 2021, its first full year of operations. Plus, Synergy raked in a massive profit of more than $2.3 million. Synergy’s debt is already quite low, and the company’s profitability reduces the risk from its debt even further. It seems the company was able to capitalize on COVID-19 telehealth trends and achieve positive growth from day one. Synergy brought in this revenue by facilitating 52,976 appointments so far, with more than 20,000 plan subscribers. 

Other than these metrics, Synergy doesn’t offer data to validate strong performance over its first year of operations. It’s not clear what the company’s future expansion plans are or how it intends to sustain demand as COVID-19 wanes. However, Synergy has demonstrated a stellar financial performance thus far, and thousands of patients evidently consider the product worth paying for. These are both positive signals for investors.

Risks

Synergy Health Network is a fairly low-risk investment. Synergy has already launched its product and has more than 20,000 paying subscribers. The company earned $4.3 million in revenue after less than two years and generated more than $2.3 million in profit.

However, there is slight risk because Synergy offers very little information about its actual product, operational history, and future plans. It’s possible that Synergy raked in so much revenue in 2021 due to COVID-19 offerings alone, so the company may not sustain the same level of demand as the pandemic subsides. Other risks include the stiff competition in the telehealth market, the uncertainty of whether Synergy’s executive team is fully committed, the sensitivity of handling patient information, and Synergy’s lack of prior fundraising history.

Bearish Outlook

Synergy Health Network faces intense competition in the telehealth market. It is a rapidly growing market, which is positive for the company. On the other hand, that lucrative market growth is causing numerous companies to rush in with telehealth solutions, from existing healthcare providers with built-in patient networks to well-funded startups, including One Medical. Synergy is vague about what makes its platform special. The company doesn’t specifically address how it can set itself apart from this sea of competition or how it plans to scale. However, telehealth isn’t a winner-take-all market. Considering Synergy’s impressive performance so far, there’s a chance the company could continue operating even without strongly distinguishing itself.

Bullish Outlook

The most compelling detail of this investment opportunity is Synergy Health Network’s financial performance. The company went from zero to $4.3 million in revenue in less than two years. Even better, the company raked in $2.3 million in profit. This is especially impressive for such an early-stage startup.

Synergy is led by a team with complementary skill sets. In addition, Synergy is gaining early traction in a market that is still relatively young but is growing at an extremely rapid annual rate of 44.4%. This growth is highly promising for Synergy’s future obtainable market. The COVID-19 pandemic accelerated the adoption of virtual healthcare dramatically, and demand for telehealth seems to be persisting even as the pandemic subsides. 

Furthermore, Synergy’s platform has already facilitated 52,976 medical visits so far, and it boasts more than 20,000 paying subscribers. If Synergy continues to bring in new patients, it can continue carving out a lucrative foothold in this hot market. Considering Synergy’s strong performance and favorable valuation, investors could receive impressive returns if the company successfully exits.

Executive Summary

Synergy Health Network is a telehealth platform offering patients the ability to book near-term primary care appointments for COVID-19 treatment, day-to-day illnesses, ongoing treatments, and more. Synergy has many competitors, and its differentiation is minimal. 

However, telehealth isn’t a winner-take-all market, and it’s growing at a breakneck annual rate of 44.4%. Synergy has already carved out an impressive foothold with 20,000 paying subscribers, which is a promising first step. Most impressively, the company’s revenue skyrocketed to $4.3 million in its first full year of operations, with a $2.3 million profit. Considering this stunning performance, Synergy’s valuation is a fair deal for investors. Therefore, Synergy Health Network has been rated a Deal to Watch. 

For questions regarding the KingsCrowd analyst report or ratings for this company, please reach out to support@kingscrowd.com

Analysis written on May 27, 2022.

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Synergy Health Network on Rialto Markets 2022
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Platform: Rialto Markets
Security Type: Equity - Common
Valuation: $29,000,000

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