Telenutrition platform Foodsmart takes $200M from The Rise Fund

Foodsmart serves over 2.2M members with food benefits and tools to overcome hunger

The U.S. may be the richest country on the planet, with the largest GDP and total wealth, but we still have an alarming number of people going hungry, with over 54 million people who are food insecure, and 23.5 million who live in food deserts, aka an urban area where it's difficult to buy affordable or good-quality fresh food.

Foodsmart is solving this by offering a telenutrition and food benefits, providing users with food delivery options that can bring healthy and nutritious meals directly to their doors, while also partnering with local food banks and community organizations to develop sustainable food ecosystems and provide access to healthy, fresh food for residents. 

Now the company will be able to expand its reach thanks to a big new cash infusion: The Rise Fund, the multi-sector strategy of TPG’s global impact investing platform, announced on Wednesday that it signed definitive documentation to lead an investment of over $200 million in Foodsmart. The transaction is expected to close in July 2024 and remains subject to customary closing conditions. 

This new funding round comes only a few months after Foodsmart raised a $10 million round in January of this year.

"Our round earlier this year was specific to our mission of accelerating the rollout of foodscripts across three of our health system partners. This round so soon after January reflects the rapidly growing demand for our services and the need to scale our operations to meet this demand," Jason Langheier, CEO of Foodsmart, told VatorNews.

"The continued interest from investors like TPG’s The Rise Fund highlights the expanding need for solutions that address chronic diseases and food insecurity long-term, especially as we see more people facing these challenges. By securing additional funding, we can accelerate our impact and reach even more individuals in need."

Founded in 2010, Foodsmart launched its Foodscripts program earlier this year, which allows primary care providers, including small federally qualified health centers as well as individual specialists at large health systems, to use Foodscripts like they would a normal pharmacy prescription: patients receive a referral to Foodsmart dietitians and subsidized meals tailored to their conditions. 

Once a member receives their Foodscript, or hears about Foodsmart through other means, they have their initial visit with a dietitian. During their initial visit with a dietitian, the dietitian will leverage the NutriQuiz, which offers a sense of a member's current food habits, cultural preferences, their lifestyle, and their health goals. This questionnaire guides the first telehealth visit that a member will have with one of our registered dietitians. 

At this point, the dietitian will screen for an individual’s nutrition insecurity and set up additional time to enroll them in SNAP if they’re eligible. They will also create a customized program with the member based on their needs and health goals. The dietitian will then order food with the member during this visit to help them get started with their program. 

Outside of dietitian visits, through the Foodsmart platform, members have access to daily tools such as educational materials, meal planning tools, grocery cost comparisons, and local grocery deals — which support the member to overcome barriers and realize their goals outside of visits with a dietitian to support ongoing behavior change.

Since January, Foodsmart has experienced growth in both its membership base and partnerships. In May, the company partnered with Samaritan Health Services to combat food insecurity and chronic diseases in Oregon; through the partnership, eligible members are able to access culturally-sensitive nutrition guidance in over 30 languages, customized recipes, grocery savings up to $34 per week, Foodsmart Bucks for groceries, and support with SNAP/EBT benefits. 

Other health system partners include Advocate Health, Intermountain Health, and Memorial Hermann Health System, collectively representing tens of millions of patients. Today, the company serves over 2.2 million members through contracts with leading regional and national Medicaid Managed Care Organizations, Medicare Advantage plans, commercial insurers, and over one thousand employers.

Through its offering, Foodsmart has shown that 39% of members with diabetes achieve controlled HbA1c levels at 24 months, reducing the risk of severe complications, while 33% of members with hypertension achieve blood pressure control over an average of nine months, lowering their risk of heart disease and stroke. Members also continue to lose weight even after three years, demonstrating long-term effectiveness.

In addition to health benefits, members save an average of 34% on groceries, making healthy eating more affordable and accessible. In April, Foodsmart released findings showing that food-as-medicine lowers expenses by $33 per member per month for health plans via a report with Chorus Community Health Plans. The report also showed greater plan savings were realized with members who have chronic conditions, including diabetes ($107 per member per month), hypertension ($101 per member per month), and hyperlipidemia ($167 per member per month). 

Going forward, the partnership with The Rise Fund will help Foodsmart enhance its technology for both members and dietitians, expand its dietitian network and operational capabilities, build on its foodscripts capabilities even further, and support the expansion of Foodsmart's GLP-1 program, Langheier explained.

"The Rise Fund is an excellent partner for Foodsmart due to their strong track record in scaling organizations that create sustained social impact. We share a commitment to addressing the needs of underserved populations and improving health outcomes through innovative solutions," he said.

"The Rise Fund's expertise in impact investing and their focus on achieving measurable positive outcomes align perfectly with our mission to provide accessible and affordable nutrition support and food benefits management, for people of all income levels — including Medicaid members and blue-collar workers. With TPG’s backing, we can integrate our foodcare solutions into more health plans and healthcare systems, ultimately reaching more underserved populations."

On top of that, the new investment further proves investors’ confidence in Foodsmart that the company is a category leader in foodcare that is able to scale rapidly, he said.

"Raising a round of this size underscores the confidence investors have in Foodsmart's mission and the proven effectiveness of our platform. It validates our approach to tackling food insecurity and diet-related diseases through innovative and sustainable solutions," said Langheier.

"This significant investment is a testament to our impact on improving health outcomes and reducing healthcare costs, as evidenced by numerous studies showing substantial savings and health improvements for our members."

(Image source: foodsmart.com)