Instacart cofounder collects $30M for nutrition care startup
Instacart co-founder Apoorva Mehta has raised $30 million for his new medical consulting venture Cloud Health Systems, the Wall Street Journal reported.
Why it matters: The round valued Cloud Health at $200 million, per WSJ — that's a big number for a company founded this year that hasn't launched any services yet, and even more staggering in a tight funding market.
- The launch also comes less than a month after Instacart announced the debut of Instacart Health in collaboration with the White House Conference on Hunger, Nutrition, and Health. More on that below.
Details: Thrive Capital led the round, with participation from Greenoaks Capital, which had been a prior backer in Robinhood Markets and Coupang.
- Cloud Health will initially focus on metabolic health and obesity under a brand called Sunrise, WSJ says, citing people familiar.
- Ultimately, Mehta wants the company "to own multiple consumer brands for different medical conditions," per WSJ.
State of play: Early-stage rounds are increasingly favorable to health tech investors leery of murky exit options — and those rounds are getting bigger.
- Several digital health startups clinched double-digit seed-stage raises in Q3 2022.
- Still, funding activity remains muted compared with 2021, when investors poured a record-breaking $29.2 billion into the sector across 736 deals.
- In comparison, year-to-date digital health funding for 2022 totaled just $12.6 billion across 458 deals.
💭 Our thought bubble: Although little information is available for Cloud Health (a website for the Sunrise brand was taken down, according to WSJ), it could eventually resemble other weight-focused startups in the digital health sector, including:
- Noom, which despite criticism pulled in $540 million in Series F backing led by Silver Lake in May.
- Omada Health, which, after two quiet years without raising, collected $192 million in Series E funding in February led by Fidelity Management and Research.
- Vida Health, which in March raised $137 million in Series D capital steered by Ally Bridge Group and General Atlantic.
Of note: Cloud Health's strategy reflects several other virtual-first health care "house of brand" strategies, such as those of Ro, Thirty Madison and Everly Health.
Catch up quick: Credited with taking Instacart from startup to billion-dollar industry giant, Mehta announced plans this year to step down as Instacart's executive chair once the grocery delivery company debuts publicly.
- He stepped down as CEO in August 2021 following disagreements with board members over future strategy, WSJ says.
The intrigue: It remains to be seen how Cloud Health will distinguish itself from Instacart Health. That venture will launch nutrition-focused product features, supported by research and advocacy commitments to make healthy food affordable and accessible, per the company. For example, the service includes:
- A health tags feature that lets users view low-salt, low-sugar, Keto and gluten-free foods.
- A partnership with virtual weight management startup Found to make its nutrition guidance and recipes shoppable within the Instacart card.
Yes, and: Health care wasn't the immediate go-to industry for Mehta, according to WSJ — he apparently also considered ventures in the space and climate technology sectors.
What we're watching: Mehta's career history likely buoyed investor confidence in his new venture, but the market is entering a new era.
The big question: Can Cloud Health make it rain money?
Mehta and Thrive did not respond to requests for comment.
Editor's note: This story has been corrected to note Thrive Capital and Greenoaks Capital invested in the round, not Coupang.