Startup Virta Health Valued at $1 Billion In Fundraise
Diabetes Startup Virta Health Valued at $1 Billion In Fundraise
(Bloomberg) -- Virta Health, a telehealth startup that aims to help people manage diabetes with frequent monitoring and dietary counseling, has raised $65 million from investors including Sequoia Capital Global Equities.
The new funding round values the company at about $1.1 billion, Chief Executive Officer Sami Inkinen said. With the latest investment, six-year-old Virta has raised $231 million in equity.
The company is one of several using technology to improve care for people with type 2 diabetes, the most common form of the disease, and other costly chronic health conditions. Virta says its approach reduces patients’ reliance on insulin and other medications, saving money for health plans, employers and other payers.
Virta combines intense monitoring of measures like patients’ blood sugar levels, which can rise to dangerous levels in diabetes, with tailored advice on diet. Patients typically interact with Virta providers three times a day, Inkinen said, and the company uses automation to extend clinicians’ reach.
Inkinen, a 44-year-old native of Finland who earlier co-founded real estate marketplace Trulia, said the model promises to change care for diabetes and other chronic illnesses by giving patients greater access to medical expertise.
“No primary care provider can interact with every one of their patients three times a day,” Inkinen said in an interview.
About 10% of U.S. adults have been diagnosed with diabetes, according to the Centers for Disease Control and Prevention. The country’s medical and productivity costs of diabetes were estimated at $327 billion in 2017, according to the American Diabetes Association.
In one of Virta’s studies, a non-randomized trial of about 350 people published in 2019, participants using its regimen showed significant improvements in metabolic health over two years and reductions in the use of insulin compared to a control group.
Other companies aiming at a similar market include Alphabet Inc.’s Onduo, closely held Omada Health, and Livongo Health Inc., which went public in 2019 and was acquired by Teladoc Health Inc. for $12.6 billion this year.
Deliver Results
Virta hasn’t disclosed its revenue or how many patients it has treated. Inkinen said the company works with more than a hundred large clients, including the Department of Veterans Affairs, the state of Alabama, Blue Cross and Blue Shield of North Carolina, and employers like General Electric Co.
Clients pay a monthly fee based on how many of their members use Virta, and those payments are typically linked to either clinical improvements or lower costs as patients rely on less medication, Inkinen said.
“We don’t get paid for showing up,” he said. “If you don’t deliver these results, you can’t use this kind of a model.”
The latest round of funding, a Series D, was led by Sequoia Capital Global Equities with participation from Caffeinated Capital. He said the new capital would be used to expand its diabetes product and adapt the approach for other conditions.
The San Francisco-based company has about 200 employees. Patients and revenue in the third quarter had more than doubled since a year ago, Inkinen said.
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