Apoorva Mehta, co-founder of Instacart, is entering the healthcare space with a venture called Cloud Health Systems, The Wall Street Journal reported Nov. 29.
Mr. Mehta aims to step down as executive chairman of the grocery delivery service — which hit a peak valuation of $39 billion in March 2021 — once the company goes public. He stepped down as CEO in August 2021 after disagreements with board members about the company's future, according to the Journal.
Mr. Mehta's plans for Cloud Health Systems are under development, though he aims to own multiple brands for different healthcare conditions, offering medical consultations and related services to consumers, the Journal reported. The first brand, Sunrise, aims to address metabolic health and obesity.
In November, Mr. Mehta raised $30 million for the startup. The funding round, led by Thrive Capital, valued the company at $200 million, according to the Journal.
"Mr. Mehta's role in growing Instacart made him one of the most well-known entrepreneurs in Silicon Valley," reporters Berber Jin and Marc Vartabedian wrote in the Journal. "Startups typically must generate at least a few million dollars in yearly revenue before they can raise at a valuation similar to Cloud Health, which was founded earlier this year and hasn't yet launched any services."
Also in November, Robert Epstein, founder of healthcare startup Helio Logistics Inc., filed a legal complaint against Mr. Mehta in federal court. Mr. Epstein alleged that Mr. Mehta partnered with an associate who knew confidential information about Helio, according to the Journal.
"The allegations against Mr. Mehta and Cloud Health Systems contained in this complaint are wholly without merit," a spokesperson for Mr. Mehta said.