Endeavour invested in Portland-based healthcare startup Zoom+care starting in 2014. Zoom+care offers on-demand urgent care, primary, and specialty care. Endeavour is Zoom’s largest outside investor, investing $61 million since 2014.
In October 2017, the Oregon Department of Consumer and Business Services (DCBS) issued $285,000 in civil penalties to Zoom+Care’s two founders and parent company, Zoom Management Inc (ZMI). The civil penalties were issued as part of a settlement which established that Zoom’s insurance company had “violated the insurance code by filing financial statements that included a $3 million surplus note, for which it had never received the funds.” ZMI was required to pay the failed Zoom Health Plan $2.1 million to resolve member claims and company liabilities.
The problems with financial reporting at Zoom+Health had surfaced in April 2017, when the DCBS took Zoom Health Plan into receivership due to a “material difference between what was in their financial statement and their actual financial condition.” DCBS subsequently filed a lawsuit against Zoom’s founders and parent company, Zoom Management Inc (ZMI), to recover $3 million in cash for Zoom Health Plan.
In June 2017, Axios reported that the FBI was investigating Zoom Health Plan for allegations that Zoom “retroactively falsified medical claims to avoid paying to an Affordable Care Act program called risk adjustment.” Axios also described Zoom+Care as “on the brink of a meltdown” and explained that the Oregon Department of Consumer and Business Services put the Zoom Health Plan into receivership.
In September 2017, the co-founders of Zoom+Care were in a public dispute with Endeavour principal Stephen Babson over what they characterized as a “takeover attempt by financiers.”
The public fight drew negative media coverage in the Pacific Northwest. In a public statement, the Zoom’s co-founders called Babson’s statements about the company “misleading” and said that a lawsuit filed by Babson and Endeavour was “based on incomplete, misleading and false allegations.”
They added, “Their intent is clear – rather than negotiate, they are seeking to use the courts to gain control of Zoom and maximize the profits of their venture fund…it’s simply the worst case of ‘pirate venture capital.” The founders also accused Endeavour of being “financial manipulators.” The parties later reconciled and the lawsuits were dropped.