Not quite 18 months after being named CEO of Truepill, co-founder Sid Viswanathan is gone. The company, worth $1.6 billion in its latest equity financing round, faces an uncertain future with a cash crunch and a DEA investigation.
JRuepill co-founder Sid Viswanathan has exited as CEO of the tech pharmacy as the company’s troubles mount.
“Earlier this week was my last day as CEO of Truepill,” Viswanathan wrote in a LinkedIn post earlier today. “This month marks nine years since I quit my last job to pursue a crazy startup idea with Umar Afridi. It was nothing short of an exhilarating ride full of all the ups and downs you would expect. , and more.
The San Mateo, Calif.-based company has not publicly named a new replacement. Truepill did not respond to requests for comment. Paul Greenall, the company’s chairman, seems like the obvious candidate to be CEO or interim CEO. He joined the company as Chief Commercial Officer last July and was promoted to President later that year. Greenall did not respond to requests for comment.
Viswanathan said in his LinkedIn post that he was “really proud” of what they had built at Truepill and had “no idea” what he would do next. “I’m going to take some time to recharge and understand the next chapter,” he wrote. Viswanathan did not respond to voicemails, texts or emails seeking further comment.
Forbes Truepill first featured Truepill as part of the Next Trillion-Dollar Startups list in 2019, an oddity in the list as it had only raised $13 million in venture capital funding at the time. Viswanathan, an Indian immigrant who sold his previous startup to LinkedIn, and Afridi, a former pharmacist who was then the company’s CEO, set out to disrupt the heavily regulated pharmaceutical industry with technology. The startup shipped its first prescriptions in 2016. By 2018, its revenue had reached $48 million, helped by the rapid growth of direct-to-consumer customers like Nurx, which sells contraceptives, and Hims, which focuses on remedies for hair loss, erectile dysfunction and acne. To consumers, these Instagrammable health products don’t look like drugs, and their subscription boxes often contain a mix of prescription and over-the-counter products. But if there’s even a bottle of prescription pills being mailed, the startup sending it needs a pharmacy to fulfill the order.
By 2019, the company had doubled its revenue to nearly $100 million by expanding its customer base beyond direct-to-consumer drugs to prescriptions that treat more serious conditions. He expected over $200 million in revenue for 2020.
The big bet, of course, was telemedicine. As it sought to expand beyond pharmacy, it rolled out home testing services, for example, just one element of what Viswanathan and Afridi thought was a broad shift to online healthcare. “We envision a future where 80% of healthcare is virtual,” Viswanathan told a trade publication. Fierce Health in 2020.
In October 2021, the company raised a Series D of $142 million at a valuation of $1.6 billion. At this point, the company had raised a total of $256 million in equity funding from investors including Initialized Capital and TI Platform Management.
But the competition has gotten tougher as other tech pharmacies, like Alto and Capsule, have emerged. Just over a year later, Truepill needed another cash injection, raising $50 million in convertible debt in November 2022, according to venture capital database PitchBook. It has since encountered further difficulties as it quickly depleted its cash flow – at the rate of $12 million per month – according to a May 2023 article in Initiated. It carried out four rounds of layoffs and closed three of its pharmacies, while reducing a fourth, according to Initiated reports.
The problems went deeper than just a cash crunch, as the startup also came under federal scrutiny. In 2022, the United States Drug Enforcement Agency alleged that Truepill had “wrongly filled” thousands of prescriptions for controlled substances, including the ADHD drug Adderall, a stimulant. The investigation stemmed from Truepill’s work filling prescriptions for Softbank-backed mental health startup Cerebral, which was under investigation by the US Department of Justice over its prescribing practices. The DEA alleged that Truepill was filling prescriptions that exceeded 90-day supply limits, as well as prescriptions written by providers without the proper state license. “We are confident that we will be able to demonstrate the absence of wrongdoing,” Viswanathan said. The Wall Street Journal in December. (The DEA did not respond to a request for an update on the status of the investigation.)
When he left the company, Viswanathan had been CEO for just under 18 months. He succeeded Afridi as CEO in February 2022. Afridi left Truepill at that time, according to his LinkedIn profile. Afridi did not respond to an email message seeking comment. By the time Viswanathan took over, the company said it had processed more than two million diagnostic tests, shipped more than 10 million prescriptions and facilitated up to 50,000 telehealth visits per week.