Outcome Health is a Chicago-based healthcare technology company founded by Rishi Shah. Its registered name is ContextMedia Health LLC.[1] It is majority owned by Littlejohn & Co., a private equity firm.[2] Its founders were indicted and convicted by a federal grand jury on multiple charges of fraud and also sued by the SEC, with veteran tech investor Howard A. Tullman describing Outcome as "our version of Theranos."[3]
History
editThis section needs expansion with: a more complete historical account, including how the venture came to attract a 600M $US round of venture funding in 2017, which cannot be the beginning of the company. You can help by adding to it. (December 2023) |
In May 2017, a funding round with Goldman Sachs, CapitalG, Pritzker Group, and others invested $600 million in Outcome Health, giving it a $5.6 billion valuation.[4] This is the largest single funding round in Chicago since Groupon in 2011, when it raised $950 million in its fifth funding round.[5]
According to a report in The Wall Street Journal unnamed former employees and advertisers accused the company of overcharging their customers for advertisements and misquoting third-party analyses and falsifying documents on the ads' performance. According to the accusations, Outcome Health reported that the ads appeared on more video screens than they had installed.[1][6] Lanny Davis, a company spokesperson, responded by saying a law firm had been hired to "review allegations about certain employees' conduct that have been raised internally."[1]
In November 2017, COO Vivek Kundra left the company.[7] Also in November, several advertisers stopped working with Outcome Health and investors sued the company claiming fraud and breach of contract.[8][9]
As of January 2018, Outcome Health decided to settle outstanding investor lawsuits in exchange for having Shah and Agarwal step down.[10]
In June 2018, Matt McNally, former chief media officer at Publicis Health, was announced as the company's new CEO.[11]
On November 25, 2019, four former executives were indicted[12] for falsifying ad performance statements to secure bank loans of nearly $1 Billion. Former CEO Rishi Shah, former President Shradha Agarwal, and former CFO Brad Purdy were charged with several counts of mail, wire and bank fraud, money laundering.[13] On April 11, 2023, Shah, Agarwal, and Purdy were found guilty of multiple counts and await sentencing, facing up to 30 years in prison.[14][needs update]
References
edit- ^ a b c Winkler, Rolfe (October 12, 2017). "Outcome, a Hot Tech Startup, Misled Advertisers With Manipulated Information, Sources Say". The Wall Street Journal. Retrieved 13 October 2017.
- ^ Company press release
- ^ John Pletz, Crain's Chicago Business, December 2, 2019
- ^ Konrad, Alex. "This 31-Year-Old Is Worth $3B For Bringing Drug Marketing Into Your Doctor's Office". Forbes. Retrieved 27 August 2017.
- ^ "Chicago's newest billionaire, 31-year-old Rishi Shah, is self-made". Chicago Sun-Times. Retrieved 27 August 2017.
- ^ Lynley, Matthew. "Startups advertising In-office medical advertising startup Outcome Health reportedly misled advertisers". Tech Crunch. Retrieved 13 October 2017.
- ^ Winkler, Rolfe (2017-11-04). "Outcome Health Loses Operating Chief Vivek Kundra". Wall Street Journal. ISSN 0099-9660. Retrieved 2020-09-24.
- ^ Winkler, Rolfe; Vranica, Suzanne (2017-11-05). "Drug Advertisers Suspend Deals With Outcome Health". Wall Street Journal. ISSN 0099-9660. Retrieved 2020-09-24.
- ^ Winkler, Rolfe (2017-11-08). "Investors Sue Ad Startup Outcome Health for Alleged Fraud". Wall Street Journal. ISSN 0099-9660. Retrieved 2020-09-24.
- ^ Marotti, Ally. "'Uphill battle' predicted for Outcome Health after settlement with investors". chicagotribune.com. Retrieved 20 February 2018.
- ^ Marotti, Ally. "Outcome Health names advertising executive as new CEO". chicagotribune.com. Retrieved 2018-09-20.
- ^ "4 health company executives accused in $1B fraud scheme". ABC News. Retrieved 2019-11-26.
- ^ Sandler, Rachel. "Former Outcome Health Executives Indicted In Billion-Dollar Fraud Scheme". Forbes. Retrieved 2020-08-28.
- ^ "Former Executives of Outcome Health Convicted in $1B Corporate Fraud Scheme". www.justice.gov. 2023-04-11. Retrieved 2023-04-12.
External links
edit- "Outcome Health Misled Advertisers With Manipulated Information, Sources Say". WSJ. Retrieved 11 November 2017.
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