When Teladoc launched in 2002, its business model allowed patients to remotely consult with state-licensed doctors through a novel delivery method: video. The idea resonated with payers and employers, so in 2005, Teladoc expanded nationwide, steadily growing before going public a decade later.

But the company faced challenges to further expansion, including growing competition, consumer and doctor skepticism and myriad regulatory and reimbursement barriers.

Then, early this year, the novel coronavirus hit, sweeping what was largely a fringe phenomenon into the mainstream.

No single telehealth vendor has capitalized on COVID-19 tailwinds like Teladoc, experts say. Along with the New York-based vendor’s first mover advantage and internal investments, Teladoc continued its steady M&A campaign throughout 2020, further rolling up the health tech space to remain a market leader.

In the biggest U.S. virtual care deal to date, Teladoc purchased chronic care management player Livongo for $18.5 billion in a deal that closed in late October, a scant three months after announcing the tie-up.

“A lot of different companies have done well during the pandemic, but no one had their thesis proven quite like Teladoc,” Stephanie Davis, senior health IT analyst at SVB Leerink, said.

Despite the historic volatility, Teladoc’s market capitalization sits around $28.5 billion as of late November, despite having revenue of $533 million last year. At an August high, its stock was up more than 200% year-to-date, though it has moderated somewhat since then.

“We were built for this kind of a situation, and the scalability of our platform and our operations really came through loud and clear when we were tested,” Jason Gorevic, who’s been Teladoc’s CEO since 2009, told Healthcare Dive. “And we were tested this year in a way that nobody could have envisioned.”

The massive Livongo buy is perhaps most indicative of how Teladoc is navigating the shifting industry, analysts say, as the company positions itself as a single access point to a variety of virtual care products.

But some investors were initially wary of the Livongo snap-up. Digital health stock tends to trade on long-term opportunity, so marrying two of the largest players in their respective markets increases the potential, but also heightens the risk if something goes wrong.

While many expect virtual care to remain post-COVID-19, many gains could be pulled back if Washington allows temporary regulatory flexibilities to expire. There’s ​also the question of how much Medicare and other payers will reimburse for virtual care, how much utilization will shift as COVID-19 cases drop off and concerns that telehealth could worsen quality of care in a field that sometimes necessitates a physical touch.

Some industry insiders criticize what they dub the “conveyor belt” approach in some of Teladoc’s businesses, funneling patients to the next available doctor. That’s “antithetical to how healthcare should operate,” Oliver Kharraz, CEO of healthcare marketplace Zocdoc said, arguing some services just shouldn’t be digitalized.

“​The danger here is, if you have a hammer, everything looks like a nail. A lot of these telehealth companies now have huge hammers right now, because of the pandemic,” Kharraz said.

In another threat, virtual care competition is increasing as rivals such as Amwell, Doctor on Demand and MDLive also ramp up operations to meet consumer demand in 2020.

But Teladoc’s client list, which spans major payers, employers and health systems, isn’t easy to match. Customers include more than 40% of Fortune 500 employers, 50 top payers and more than 450 hospitals and health systems, including giants like UnitedHealth, CVS and academic medical center Johns Hopkins.

To worries telehealth use could drop off as COVID-19 cases do, Teladoc’s leadership points to the third quarter. The expected dampening effect didn’t happen — in fact, volumes in the third quarter were triple the same time last year, and up slightly sequentially despite states easing lockdowns and fewer new COVID-19 cases in the period.

The vendor is increasingly focused on expanding its service lines, and is seeing strong growth in specialty areas. In the third quarter, behavioral health and dermatology were the fastest-growing segments, and more than half of visits were for non-infectious diseases.

Analysts say mental health is one arena where Teladoc and Livongo will be particularly strong, and expect additional buys of small-to-medium telehealth or other digital health-focused companies over the next few years.

And potential demand for digital health products is staggering. Up to $250 billion, or about a fifth of all health spend, could eventually be digitalized, according to McKinsey. Teladoc, which is active in 175 countries, sees about a $121 billion target market for itself.

With respect to near-term momentum, Teladoc expects to close double the bookings in the fourth quarter compared to the third. And about two-thirds of its sales are multiproduct, indicating interest in holistic virtual care offerings beyond urgent care. That’s where the industry, and the company, has always been heading, and thanks to the novel coronavirus, it has arrived there years — or even decades — ahead of schedule.

“The vision of the company has always been the same… we just couldn’t say that at the beginning,” Gorevic said. “It’s certainly been a busy year.”