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BFD Expert Voices - Health Tech Deals

BFD Expert Voices

Diabetes care provider Ryse Health drew $6.5 million in Series A funds for its virtual and in-person services, CEO Richard Gurley tells Erin exclusively.

Why it matters: The prevalence of diabetes in the U.S. is expected to rise and while some people can manage the condition virtually, those with more complex cases may benefit from additional support in person.

Deal details: Route 66 Ventures helmed the round with support from W Health and CareFirst BlueCross BlueShield innovation arm Healthworx.

Ryse says it will hone its provider-facing product to improve collaboration among members of its clinical teams.

Gurley says the company anticipates raising a Series B within the next 18 months.

Be smart: For more complex Type 2 patients with severe or poorly controlled diabetes, existing remote approaches may not be sufficient.

How it works: Enter Ryse, which only accepts Type 2 patients whose average blood sugar levels (A1C) exceed 8%. At 9% A1C, people face a markedly higher risk of long-term complications such as blindness, nerve damage and kidney failure.

Ryse operates in-person clinics in Arlington, Virginia, and Baltimore, Maryland, and offers virtual support that includes analytics and coaching.

The company provides every user with a CGM and access to a care team that includes endocrinologists, diabetes educators, dietitians, behavioral therapists and health coaches.

"If you have an A1C under 8 and don’t use insulin, we won’t take you," says Gurley. "We’re built for folks with more complexity."

By the numbers: Ryse currently serves 440 patients who range in age from 21 to 93, with two-thirds of its users under age 65.

The company is contracted with one local employer and aims to have a number of value-based contracts in place by year's end, Gurley says.

Be smart: Research suggests people with Type 2 diabetes may benefit from access to both in-person and virtual support.

A study published last year in the Journal of General Internal Medicine found that Type 2 patients who used both physical and virtual services maintained their health throughout the pandemic, while those who relied only on in-person services saw declines.

What they're saying: Many Ryse users benefit from physical assistance, not only in the form of visits and in-person exams but also basic tech support, say Gurley and Route 66 partner Pat Wilson.

"Looking at the market we realized there are a lot of in-person solutions and a lot of virtual solutions, but at the end of the day diabetes isn't rocket science — it's a behavioral and economic nudge problem," says Wilson.

The backstory: After serving as an executive at value-based care enabler Evolent Health and then as adviser and investor to a handful of health tech startups, Gurley thought, "What if we only served patients who are high-needs and excluded lower-needs patients so we’re a more focused factory?"

Yes, but: Founded in 2021, Ryse has yet to publish in the peer-reviewed literature but is "building a concrete timeline" for that this year, the CEO adds.

1 big thing: Ryse Health nets $6.5M Series A for hybrid diabetes care

Illustration of a glucometer with a dollar sign on the screen.

The success of fully virtual diabetes care proved a major proof point for telehealth, with such companies raising a bolus of venture capital funding in recent years.

Digital diabetes startup 9am.health last spring collected $16 million in Series A capital.

Virtual metabolic care provider Omada Health last winter raised $192 million in a Series E round.

Digital diabetes care provider Virta Health in 2021 pulled in nearly $133 million at a $2.1 billion valuation.

Apple last month was reported to be making big strides on a non-invasive continuous glucose monitoring (CGM) device.

State of play: Remote diabetes care

2. State of play: Remote diabetes care

Illustration of a file foldler with a note that says "State of Play" paper clipped to it.

Fertility clinic operator and employer benefits provider Kindbody raised $100 million at a $1.8 billion valuation, chair Gina Bartasi tells Erin exclusively.

Why it's the BFD: As demand for infertility services rises, tech-forward companies say they can offer people more transparency and convenience than traditional approaches.

Deal details: Life science investment firm Perceptive Advisors provided the funds, tipping Kindbody’s total equity and debt capital to just over $290 million and making the company the second of its kind to hit unicorn status.

Kindbody is using the funds to acquire additional virtual health and fertility companies and open 10 new locations, including in Seattle, Brooklyn, Miami, Philadelphia and California's East Bay.

'This will be the last money in," Bartasi says. "We are projecting to be EBITDA- and cash-flow-positive this year."

Of note: Bartasi says Kindbody expects to be "ready when the markets open back up in 2024," when asked about the company's previously stated intent to go public.

State of play: Fertility startups banked a record $424 million in the last quarter of 2021, per a Rock Health report.

Maven Clinic, the first maternal and family health startup to reach coveted unicorn status, last fall collected $90 million in Series E funds.

Legacy, a celebrity-backed sperm testing and storage startup, last summer banked $25 million in Series B funds at a valuation of $150 million.

Combining fertility financing and care support, Future Family last spring raised $25 million in Series B funding at an $80 million valuation.

How it works: Based in New York, Kindbody functions as payer and provider and offers customers bundled rates for its services, which include fertility and nutrition consultations, in-vitro fertilization (IVF), egg freezing and virtual therapy.

Roughly half of Kindbody's revenue comes from employers while 30% comes from its managed care service line. The other 20% comes from people who use its services directly, says Bartasi.

To predict someone's success conceiving, Kindbody assesses factors including male infertility, a woman's age and pregnancy history, and her levels of anti-mullerian hormone (AMH), which corresponds to egg count, and follicle-stimulating hormone (FSH), which stimulates egg production.

What she's saying: "The only way you can improve the patient experience, increase outcomes and reduce costs is to be in the provision of care," says Bartasi.

By the numbers: Kindbody provides benefits to 112 companies and sees roughly 7,200 patients a month.

88% of its physicians are women and more than half identify as Black, Indigenous or people of color (BIPOC).

🛁 One fun thing: Kindbody's clinics are designed not to look like a traditional doctor's office.

"Our patients leave and say it looks like a spa," Bartasi says. "There are no white walls, no white coats, no medical degrees on the walls."

3. The BFD: Kindbody gets $100M at $1.8B valuation

Illustration of a pregnancy test with a dollar sign appearing on the screen.

• Bardavon, an Overland Park, Kan.-based physical therapy company, acquired Preventure, a Pyrmont, New South Wales-based workplace injury prevention company. https://www.bardavon.com/

• B Capital raised over $500m for its debut health care VC fund. www.bcapgroup.com

4. Deals o' the day

• Elektra Health named the following people to its advisory board: Black Girl's Guide to Surviving Menopause creator Omisade Burney-Scott, Galileo virtual clinical director Honore Lansen, Babson College associate professor Tina Opie and North American Menopause Society medical director Wulf Utian.

• Redesign Health named former Olive AI director of payer product Brian Gibson product adviser.

• LifeSpeak named former Flo chief revenue officer Chad Deshler SVP of sales. 

• Significo named former MindBridge executive director of global marketing Michael Robin VP of marketing.

• Evergreen Nephrology named former Cityblock Health manager of care strategy Jayesh Srivastava market operations director.

• The Lactation Network named former Brightline SVP of commercial Amy Provonchee chief commercial officer.

• Transcarent named former Cigna SVP Tom Richards EVP of business development.

• Marshfield Clinic Health System named former Olive AI executive sales director Surya Ravulaparthy VP of revenue cycle.

5. It's Personnel

U.S. regulators rejected Elon Musk’s bid to test brain chips in humans, citing safety risks — Reuters

As SNAP benefits wane, food-as-medicine companies carve out a niche — Fierce Healthcare

"A wakeup call from Hell" —  The New York Review of Books

6. Your daily dose

Illustration of a weekly pill dispenser box with a newspaper called "daily dose" in each compartment.

🧪 Situational awareness: Genetic testing company Color is laying off roughly 300 employees as it downsizes COVID testing operations.

🌨️ Erin is getting buried in Tahoe's historic snowstorm while the power goes in and out. Fortunately, there's food in the house.

🥳 Thanks for reading, and extra thanks to newsletter editor Claire Rychlewski and copy editor Mickey Meece. Please ask your friends, family and colleagues to sign up.

March 02, 2023

1 big thing: Ryse Health nets $6.5M Series A for hybrid diabetes care