In the post-pandemic world, home-based medical tests and remote healthcare consultations are becoming the preferred method due to it being relatively effective (say bye to hours of waiting time in clinics!), and accessible. This is especially true for those located in rural areas, where telehealth is becoming a new norm that will continue to change the future of healthcare delivery. An interviewee told the Sydney Morning Herald in January this year that she prefers telehealth rather than visiting an unfamiliar GP visit because, “Everything else we do in our lives is becoming more and more online, I just don’t see the difference between banking online and this sort of stuff.”

How positively Aussies are responding to online healthcare services right now might have been the perfect moment that technology expansion capital fund Bailador Technology Investments (ASX: BTI) had foreseen when it first invested in digital healthcare platform InstantScripts a couple of years back. Bailador today announced that 100% of the InstantScript shares are to be acquired by Australian Pharmaceutical Industries Pty Ltd (API), a wholly-owned subsidiary of Wesfarmers Limited (the parent company of national retail brands such as Kmart, Bunnings, and Officeworks) for approximately $135 million. 

Bailador first invested $5.5m in InstantScripts in July 2021, then gradually pumped up the investment amount to a total of $30.2m over the last two years. The decision to hand InstantScripts over to Wesfarmers came almost three months after Bailador further gave InstantScripts an extra $10m investment in March 2023. 

The transaction will give Bailador a $52m cash payout and will result in Bailador exiting its whole position in InstantScripts. The sale price represents an uplift of 25% more than the current carrying value of InstantScripts. The valuation uplift of $10.3m is an increase of $0.07 NTA per share (pre-tax). The realisation of Bailador’s investment in InstantScripts represents an internal rate of return (IRR) of 64% for the fund.

Paul Wilson, Bailador Co-Founder and Managing Partner commented: “InstantScripts’ innovation in the delivery of primary health care has been wholeheartedly embraced by the Australian community, and we are proud of what the team has added to the healthcare landscape.”

Meanwhile, Wesfarmers Health Managing Director Emily Amos commented that the InstantScripts acquisition will complement the group’s existing portfolio, especially in leveraging the service offerings of its existing pharmacy network and Clear Skincare line.

The sale is anticipated to complete in early July 2023. Bailador will reflect the valuation change as a result of the sale of its investment in InstantScripts in its June 2023 shareholder update.

Bailador invests in businesses that are seeking growth stage investment, primarily in the information technology and media sectors. It now has a portfolio of businesses within eCommerce, subscription-based internet businesses, online marketplaces, software, SaaS, high value data, online education, telecommunication applications and services. Digital health seems to be a recurring area of interest of Bailador’s, considering that it has three digital health companies within its portfolio; Mosh, Access Telehealth, and InstantScripts.

InstantScripts’ digital healthcare platform first rose during COVID, and now serves around 300,000 Australians with access to doctor care, health services (e.g. telehealth and medical certificate issuance), and prescription medication within minutes. It also enables streamlined access to certain routine pathology tests and is developing AI-driven results interpretation tools supplementing the doctor’s input. Over 40% of Australian pharmacies are already registered with InstantScripts, and the platform also has e-prescription integration and is on the Australian Digital Health Agency (ADHA) conformance register.