Axios Pro: Health Tech Deals

December 01, 2023

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Programming note: Today, Aaron takes a deep dive into the obesity and weight management deals world.

1. The stage is set

a collage of colorful rectangles featuring photos of money, weight loss items, charts and a handshake

Illustration: Tiffany Herring/Axios

As GLP-1s boom, the stage is set for a shakeout, investors and executives tell Aaron.

Driving the news: This year has seen a cadre of early-stage weight management startups snag investor dollars to address the $1 billion-plus market.

Why it matters: These investments have crowded the competitive field and now companies will seek to scale within the space, the investors and execs say.

The big picture: The rise of GLP-1 weight loss drugs, like Ozempic and Wegovy, could revolutionize a health care sector that receives around one-quarter of all VC dollars, Axios' Dan Primack reported.

What they're saying: "There should be multiple winners, considering that 70% of America is overweight or is obese β€” but there is no way the number of companies that currently exist can last," says Sarah Jones Simmer, CEO of weight management coaching service Found.

  • "In Q1-Q3 2023, we saw funding go primarily to early-stage digital health startups with specialized obesity care offerings," says Sari Kaganoff, GM of consulting at Rock Health.
  • Kaganoff says the startups have similar capabilities, so the challenge is to win new customers and users.
  • "We'll probably see more enterprises buying startups than startup consolidation (like Weight Watchers' acquisition of Sequence) to acquire new capabilities."

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