Axios Pro: Health Tech Deals

January 19, 2023

Axios Pro Exclusive Content

Happy Friday Eve, Health Tech readers.

🎂 Situational awareness: Happy first birthday to Axios Pro Health Tech Deals! Thanks for reading us, and let us know how we're doing!

1 big thing: Knownwell debuts obesity medicine-focused primary care

Illustration of a phone wearing a doctor's coat and a stethoscope.

Illustration: Aïda Amer/Axios

Knownwell wants to change the way primary care providers treat people with obesity, starting with removing the stigma linked with the disease.

Why it matters: The Boston-based hybrid care company just collected $4.5 million in a seed round led by Flare Capital Partners, Knownwell CEO Brooke Boyarsky Pratt tells Erin exclusively.

Details: Additional backers include Flybridge LTV Operator Fund, Oxeon, Larry Summers, Mirror's Brynn Putnam, Dia & Co's Lydia Gilbert and Nurx's Varsha Rao.

What's next: Knownwell will use the funds to complete construction of its first clinic in Needham, Massachusetts, and to hire physicians and non-physician practitioners.

  • The company plans to raise its Series A in 12 to 18 months, Boyarsky Pratt says.

What they're saying: One of Knownwell's core differentiators is its longitudinal approach to improving patients' health, whether or not that includes weight loss, the company's leaders and investors tell Axios.

  • "If you look at obesity treatment options today, many treat it either like an episodic condition or a lifestyle," Boyarsky Pratt says. "It's a chronic disease that should be in a system that pulls together primary care and metabolic health."

How it works: Starting with its Needham clinic, Knownwell will provide in-person and virtual primary care and metabolic health services including obesity treatment, nutrition counseling, psychotherapy, stress and sleep management, and prescription medications.

  • The company will accept all major insurance, will charge no membership fee and will partner with health systems that refer patients to its services, Boyarsky Pratt says.
  • "Massachusetts is ahead of the curve when it comes to obesity medicine, and our services will be covered by Medicaid here, which is really important," she adds.

Yes, but: One challenge facing Knownwell is the reimbursement landscape for obesity medicine, which varies significantly by state.

  • Traditional forms of Medicare generally cover screenings and counseling services (if performed by a primary care provider) and surgery, per a 2022 Urban Institute report.
  • It covers weight loss programs only when prescribed as treatments for a particular disease, such as diabetes.
  • Under the Affordable Care Act, commercial insurers are required to cover only screenings and counseling, the report found.

State of play: In the metabolic digital health sector, diabetes-focused heavyweights such as Omada Health and Virta Health have pulled in a collective $815 million over their lifetimes. Other firms focused on weight management have also cropped up in recent years:

  • Instacart co-founder Apoorva Mehta in November raised $30 million for medical consulting venture Cloud Health Systems, whose initial focus areas include metabolic health and obesity under brand Sunrise.
  • Digital weight loss service Noom in 2021 collected $540 million in Series F funding.
  • Virtual weight loss provider Calibrate in 2021 pulled in $100 million in a Series B round.
  • Weight management platform operator Found in 2021 raised $100 million in Series B capital at a $600 million valuation.

The backstory: Boyarsky Pratt first experienced obesity stigma at the doctor's office at age 10, and it has recurred throughout adulthood: She would visit the doctor with a primary concern, such as a sinus infection, and be told to eat less and exercise more.

  • "It's the most stigmatizing experience," Boyarsky Pratt says. "We need to treat obesity like the disease it really is."

The bottom line: "On the advocacy side, we just need to do better as a country," Flare Capital partner Ian Chiang says.

View archive