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Startup Taking Aim at Chronic Disease Raises $23 Million in Andreessen-Led Round

Omada's Prevent product is designed to help people at risk for developing diabetes.

Courtesy: Omada

Omada Health has closed a $23 million funding round led by Andreessen Horowitz, in what marks the venture capital firm’s first significant investment in the digital health space.

The San Francisco startup’s flagship product is a 16-week online program, Prevent, designed to help those with pre-diabetes make changes to their diet and lifestyle to avoid developing the disease.

Users are asked to input their daily food, drinks and activity. The company, in turn, provides a wireless scale, pedometer, professional health coach and interactive health lessons. Omada also sets up a social game in which users compete with around a dozen others to achieve their goals.

The service costs $130 per month for the first four months, a total of $520 — and $12 per month for ongoing access.

One in three Americans have pre-diabetes, which is defined as higher than normal blood glucose levels that put them at a much greater risk of developing type 2 diabetes within a decade. Studies show the best path to prevention is weight loss.

“We’re caught in an unacceptable paradox: Despite staggering technological advances in nearly every aspect of our lives, for the first time in history we find that preventable, chronic disease now kills more people than infectious disease,” said Sean Duffy, chief executive of Omada, in a statement. “Omada’s mission is to inspire people to alter the habits that place them at risk for serious but preventable conditions.”

Other investors in the Series B round included Kaiser Permanente Ventures, U.S. Venture Partners and the Vertical Group.

Update: Andreessen partner Balaji Srinivasan is joining Omada’s board. In a blog post on Wednesday morning, he wrote that Prevent has shown clinically significant weight loss results in a study set to be published in the peer-reviewed journal The Diabetes Educator.

“Omada has built one of the very first digital therapeutics: a clinically validated, peer-reviewed, reproducible, and scalable way for people to treat a condition over an internet connection,” he wrote. “Specifically, Omada’s Prevent product is a clever combination of science, software, design, and hardware, which blends the online and offline to achieve clinically meaningful behavior change.”

Srinivasan added that the same approach could be applied to other chronic conditions, including hypertension, insomnia and quitting smoking.

“If we can deliver weight loss over an internet connection, suddenly anything that involves serious behavior change is a possibility,” he said. “And once a digital therapeutic works for one condition, it can be scaled to the world at the speed of software to help bend and then reverse the dangerous cost curves which we referenced above.”

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