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Sharecare to go public in $3.9B SPAC, IPO deal

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Jeff Arnold, Sharecare CEO and WebMD Founder, joins Yahoo Finance to discuss the benefits of artificial intelligence in healthcare, benefits of using the platform, and highlights on the SPAC.

Video Transcript

[MUSIC PLAYING]

MYLES UDLAND: All right, welcome back to "Yahoo Finance Live" on this Wednesday morning. As our viewers know, SPACs have been the hottest trend in markets of late. And we have another announcement or had won just a couple of weeks ago. Sharecare will come public in a merger with Falcon Capital Acquisition Corp. And Sharecare CEO Jeff Arnold joins us now to discuss. Jeff, thanks so much for joining the program this morning. I'd love to start just with kind of where Sharecare fits into a theme we've discussed a lot with a number of companies. I think of it as broadly digitizing the health care space. I don't know if that's how you guys are thinking about it. And just maybe where some of our viewers have probably come into contact with Sharecare without even knowing.

JEFF ARNOLD: Yeah, sure, well, you know, I've been in digital health for most of my career. I started at WebMD back in 1998. And I think what's really exciting for digital health now is we're moving beyond just being able to get trusted content, but to be able to really leverage technology now to bring the ecosystem to the palm of the person's hand. So instead of having to go to the hospital website or download the insurance company's app or only think about your benefits during open enrollment, you know, technology is now enabling us to put all that together in one place directly to the person.

JULIE HYMAN: Jeff, it's Julie here. I was going through your investor presentation. And, indeed, it seems like you guys do a little bit of everything when it comes to digital health. But from what I was gathering, it seems like the largest proportion of your revenue comes from services for-- directly to health care providers and insurers, if I'm understanding that correctly. What is that relationship? And what services are you providing to them?

JEFF ARNOLD: Yeah, so think of Sharecare as this idea of all together better. So we're all together better when we can bring the ecosystem to the palm of the person's hand. We're all together better when we can move away from the sea of apps to integrated platforms. And we're all better-- together better when we can go from my health to our health.

And our business looks almost like a wedding cake. We're on the bottom. We have a big enterprise business where we service government, large health plans, and employers. And what we do for them is in a single platform, we provide them with benefits and health care navigation. We provide them with digital therapeutics. So we have interventions to help get better outcomes. And we provide advocacy services.

BRIAN SOZZI: Jeff, there's been a good number of digital health companies that have emerged during the pandemic and, really, growing aggressively. As a veteran in the space, do you expect there to be a roll-up moment where a lot of these companies, let's say such as yourself, acquire other companies and combine to grow bigger or, ultimately, these players, again, such as yourself, just become part of a bigger health care company?

JEFF ARNOLD: Yeah, I mean, yeah, I think Sharecare's aspirations are we want to be the front door of health care. And so we deploy this one integrated platform to these big health plans that reach millions of members. We announced the largest Medicare Advantage plan this weekend in South Florida. But I think more is better here. What's happened historically in digital health is that clients have really suffered from vendor fatigue.

You know, how do I buy all these different point solutions? How do I make the data interoperable? How do I make the user experience easy to understand? How do I make it affordable for all? So the Sharecares of the world have come along and said, you know, technology is now here where we can provide you this one integrated platform that can help educate people on what their baseline looks like. For us, that's the real age.

We can help educate people on their real time, so be able to do holistic tracking. But more importantly, be able to use technology to take health plan members and employees on a journey that helps them understand their numbers, manage their risk, manage their conditions, understand their benefits. And I think the goal of all this technology is to use technology to get that triple aim of improving outcomes and lowering costs and improving satisfaction. But more importantly, get people to move from episodic to everyday.

JULIE HYMAN: Jeff, I want to turn to the SPAC structure because one of the questions I've had as we've had this explosion in SPACs late last year and coming into early this year is what would have all these companies done had there not been a SPAC boom? So I would ask you as someone who's also been through an initial public offering with WebMD, what was your plan before this whole SPAC boom, earlier on? Were you planning an IPO and then you switched?

JEFF ARNOLD: Yeah, well, you know, if there's a silver lining in the pandemic, which is hard to see, it has been digital health, is people more so than ever self-aware of their risk. This has become a must-buy for CEOs and investing in a culture of well-being.

We had to scale to go public. I mean, we'll do over $396 million in revenue this year. We're EBITDA and cash flow positive. We had a board meeting in Q4 and said, look at what's happening in the market for digital health and the investor demand that's out there, we should hit the dance floor too. And we started getting approached by various SPACs.

And I didn't know much about SPACs at the time. But as I started to get educated about them, I saw some benefits that I thought were really attractive. One, you know, being able to talk to investors for an hour and really be able to explain health care. Because health care super complicated. We thought for Sharecare, that was a great benefit, being able to share forecasts. You know, we've had a big COVID boom in digital health. So to be able to tell how our revenue is accelerating and how we think that is going to last for forever forward as within this new normal.

And then we found some really quality SPAC sponsors. And our example, it was Falcon who was led by Alan Mnuchin, who's got amazing capital markets expertise. They had good experience with SPACs as Jeff Sagansky as partner and Harry Sloan had done the DraftKings SPAC. They had done the Skillz SPAC. And so, you know, being able to talk to investors, having capital market expertise, having SPAC success in the past, we saw it as real benefits as well as getting public a little bit faster.

MYLES UDLAND: You know, Jeff, just finally before we let you go, I want to ask maybe a broader question. Just looking kind of through your experience about where you see like medical content going, if that makes sense, WebMD and just-- I mean, you've seen digital content go from something that doesn't really exist to pretty much all we consume all day. I don't know if that's an ambition you have of Sharecare being more integrated with consumers, but I'm curious how you see this space as a veteran of it?

JEFF ARNOLD: Yeah, so I think trusted information is obviously really important. I mean, we're in a space where the information has to be right 100% of the time. I think being able to take that trusted information and be able to data-driven dialogue, so no two content experiences are the same. Your content experience is different than my content experience. And being able to go where the person's at, so whether it's at their job or through their health plan or as a patient or on social media is going to be key. I think artificial intelligence is going to unlock the next explosion of where we're going to be able to take data and not just be able to create dialogue and educate people, but we're going to be able to create insights.

And so this idea of, you know, using AI to be able to optimize my diet, you know, by taking pictures of my food and being able to figure out what's the right diet for me, or be able to optimize my mood, I mean, I can literally take a picture of your face and tell you what your height and your weight and your BMI looks like and start to track different elements of your smile to track your mood to be able to provide interventions, all the way to where I think the new UI is going to be no UI, that everything is going to be done on voice commands so you're going to be able to say, when was the last time I had an eye exam? Refill my prescription. Schedule my doctor's appointment.

And this idea of sharing care, what I think this is going to mean over time is that I share my data with Sharecare so that I can optimize my health. But I'm also sharing my data in an anonymous way so I can optimize our health. And I think this is going to become our Operation Warp Speed and is going to be what the essence of Sharecare means over time and how we build community that lasts forever.

MYLES UDLAND: All right, I'll make sure to smile for the camera so I'll look happy, healthy, and I get a good report from my medical team. All right, Jeff Arnold--

JEFF ARNOLD: [INAUDIBLE]

MYLES UDLAND: --CEO of Sharecare. Jeff, appreciate the time this morning. Hopefully, you know, congrats on the transaction. Hopefully we'll talk as you guys get into the quarterly rhythm of reports. Appreciate the time.

JEFF ARNOLD: Absolutely, thanks for having me. Take care.