A startup that raised $US500 million in May at a $US5 billion valuation misled its advertisers, The Wall Street Journal reports.
Chicago-based Outcome Health delivers educational health footage alongside advertisements from pharmaceutical companies to doctors’ offices and waiting rooms. There were more than 50 investors in the May round, including CapitalG, Alphabet’s growth-equity fund; Pritzker Group; Goldman Sachs; and Leerink Transformation Partners.
Outcome Health has said it’s in 40,000 healthcare practices and works with 20% of healthcare providers in the US. By 2020, CEO Rishi Shah said he hoped to be working with 70% of all healthcare providers. The company also has plans to hire 2,000 more employees by 2022.
But according to the report from The Journal, between 2014 and 2016, Outcome charged for more screen installations than it actually performed. Employees reportedly also doctored screenshots that were meant to show that certain ads had run in a particular doctor’s office.
Outcome said in a statement sent to Business Insider:
“Outcome Health exists to activate the best health outcome possible for every person in the world. We are proud of the company we have built, helping doctors and patients make more informed decisions while having high rates of meeting our clients’ performance goals. We have rigorous policies and practices that deliver on contractual terms with transparency to our customers when campaigns experience issues.
“When we have a shortfall in media delivery, we strive to identify the issue as quickly as possible and address it with our client through “make-goods” or “bonus media” provisions, such as extending a campaign or increasing the number of doctors’ offices we reach for that campaign.
“We would also note that incidents that the Wall Street Journal identified occurred between 2014 and 2016. The company also strongly denies having a practice of misreporting campaign information to customers. The company’s policy has always been to accurately report information to every customer on every program. If there was any misconduct by any employee, we will deal with it very strongly and take appropriate action.”
In October, Forbes reported that Outcome laid off 76 employees, as well as refunded Pfizer $US4 million for its advertisement campaign after reportedly not getting the results from the campaign that it was looking for.