Omada Health, founded in 2011 with the goal to create digital diabetes management programs to prevent high-risk patients from developing the complex condition, has raised a $192 million Series E funding round. The San Francisco company announced Wednesday that the latest financing comes from Fidelity Management & Research Company with participation from aMoon. Existing investors Perceptive Advisors, Wellington Management, Civilization Ventures also contributed along with other unnamed investors.
In its early days, Omada largely focused on prediabetes and made a name for itself in the near-constant messaging that digital, app-based tools need to demonstrate clinical validation including through randomized trials. That helped the company to get major wins, including being recognized by the CDC for its virtual diabetes prevention program.
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But even as evidence grew on the efficacy of Omada’s digital diabetes prevention and management programs, the market was sending another signal. Potential customers — employers and payers — were becoming less interested in point solutions and instead keen to have a platform to manage not just their prediabetes and diabetes populations but a variety of co-morbidities they endured.
Not surprisingly, like its competitor, Livongo (that is now part of Teladoc and also began life in the world of diabetes and expanded into other conditions) Omada Health moved to broaden its product portfolio to manage other chronic diseases: hypertension, behavioral health and musculoskeletal conditions — the latter, through an acquisition. And last year, it began to offer chat-based virtual consults with physicians to help people manage their diabetes and hypertension.
All of those strategic shifts appear to be paying off. If the company is to be believed, it has seen record growth over the past year.
“Omada Health currently serves 1,700+ customers and 550,000 members – up from 1,000 customers in 2019,” said Steve Cook, the company’s chief financial officer, in the news release. “Omada Health now has access to over 18 million covered lives across our employer and health plan channels, with more than 3.5 million covered lives added through new deals in 2021.”
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This growth means the company has to be in hiring mode and indeed the money raised will be partly used to fuel that effort. Part of the $192 million haul will also be dedicated to the Omada Insights Lab, which leverages data to get to better outcomes and deliver results for customers.
The data-driven approach won kudos from a new investor.
“Omada Health’s dedication to health outcomes and mindset-driven care support was a major differentiator that stood out to aMoon in a crowded digital health landscape,” said Tomer Berkovitz, general partner at aMoon Fund, in a statement. “This latest funding round emphasizes our confidence in the Omada team and our strong belief in the company’s platform as a proven solution across multiple chronic conditions.”
“Crowded digital health landscape’ is an extremely apt characterization of the current chronic diseases management market, especially in diabetes. While Omada is certainly one of the pioneers in the field of collecting data from connected devices and creating smartphone-based products to help diabetes patients, there are numerous companies in just the diabetes space alone jostling for space under the sun.
Through Livongo, the virtual care and telemedicine company Teladoc is hoping to get a piece of this market. While seeing immense growth during the peak of the pandemic when virtual visits soared, Teladoc is struggling mightily, at least from the perspective of its stock price, which is down from a high of more than $265 in February 2021 to now around the $60-$65 range. It’s possible that investors are spooked by Amazon’s entry into the marketplace. In fact, even after reporting better-than-expected earnings results on Tuesday, the stock fell. [Author owns stock in Teladoc and Amazon]
A more direct Omada competitor in the world of diabetes is Onduo, which had its own news announcement on Wednesday of a new partnership with a payer. Onduo was initially created as a joint venture between Alphabet’s life science business Verily and Sanofi, the French pharma company, in 2016 with a $500 million investment. But Sanofi left the joint venture in December 2019 amid reports that the pharma company felt it had over-invested.
Coinciding with Omada Health’s Series E announcement, Onduo announced that Pittsburgh-based integrated care provider Highmark Health has chosen the Verily subsidiary to launch a virtual care program to any member who is over 18 and diagnosed with type 2 diabetes. Eligible members will be contacted by the Onduo team to enroll them in the program called the Well360 Diabetes Management program. Thereafter, the program can be accessed by downloading the Onduo app or going to the Well360 Diabetes Management website. The service is free to all except for those enrolled in a high deductible plan from Highmark Health. The latter would have to pay out-of-pocket for some services within the program until that deductible is met.
By enrolling in the program, members will be assigned a care coordinator to develop a personalized management plan. The coordinator will assist people living with type 2 diabetes to continue taking the medications they need as prescribed as well as offer tips on healthy eating and exercising. Other Onduo features include a virtual health clinic with access to endocrinologists and other clinicians, remote prescriptions, and care coordination with primary care physicians.
Upon enrolling, patients will receive a smart glucose monitor, an at-home A1C test kit, a lancing device as well as unlimited testing strips. The smart glucose monitor automatically connects with the Onduo platform so members’ glucose readings and progress can be tracked thereby helping in better disease management.
The full implementation of Onduo’s virtual, type 2 diabetes management program within Highmark population comes after positive results that emerged from a pilot.
A full 92% of participating members with a baseline A1C of 9.0% or greater improved their A1C by an average of 2.7 points upon follow-up, according to a news release. Moreover, members who reported losing weight lost an average of 13.3 pounds, or 5.7% of their starting weight.
“We believe that Well360 Diabetes Management will lead Highmark’s members with diabetes to engage more proactively—and with actionable information—in a two-way dialogue with clinicians, who can intervene to improve short- and long-term health outcomes,” said Dr. Tony Farah, executive vice president, chief medical and clinical transformation officer, Highmark Health in the news release. “Eliminating fragmentation in healthcare can do more than improve traditional health outcomes and costs; it can reduce the everyday stress of managing chronic conditions, engage patients in whole-person health and improve their quality of life.”
Bending the upward curve of chronic disease costs and helping patients lead fuller lives unencumbered by disease is a noble goal, one that executives at Omada Health presumably are also whole-heartedly behind. But how the different players — Omada Health, Virta Health, Onduo, Livongo/Teladoc and others — achieve that goal in the crowded digital health landscape with sky high valuations and record fundraising is of course a different matter. Let’s hope the next couple of years provides some more clarity.
Photo: NicolasMe, Getty Images
