Omada Health raises $4.7M for diabetes prevention

Faith Merino · March 21, 2013 · Short URL:

The company is rolling out a 16-week program for people with prediabetes

A shocking 43% of all U.S. adults are either diabetic or prediabetic. That’s insane. To make matters worse, the majority of people who are prediabetic don’t even know it, since it tends to come part-and-parcel with being overweight or obese—and wouldn’t you know it, more than one-third of U.S. adults are obese.

If you’re overweight, you can reduce your risk of diabetes by losing at least 7% of your body weight (15 pounds on a 200-pound person). To that end, you can sign up for Weight Watchers or Jenny Craig, or you can join a program that’s specifically designed for those with prediabetes.

Omada Health, a startup that has created an online program for people with prediabetes, announced Thursday that it has raised $4.7 million in a Series A round led by U.S. Venture Partners, with help from The Vertical Group, Founder Collective, NEA, TriplePoint Capital, Kapor Capital, and angel investors. The company plans to use the new capital to support the commercial rollout of its 16-week program “Prevent.”

The program is modeled around the National Institutes of Health study called the Diabetes Prevention Program and is designed to help participants modify their behavior and reduce their risk of Type 2 diabetes. Currently, the cost of diabetes and prediabetes on the U.S. healthcare system is pushing $220 billion. The average annual cost for a single person diagnosed with diabetes is nearly $10,000.

The problem is that most people don’t know that they’re prediabetic. How do you create a service for people who may not know they need it?

“The majority of our business will be from self-insured employers and health systems sponsoring participants through our program,” Omada Health CEO Sean Duffy tells me. “That being said, we do expect that a number of people will sign up on their own (and they already are). The program includes quite a lot: 16 weeks of health coaching, a cellular-enabled digital scale, a pedometer, and more.”

The program costs $120 per month for four months, and then $12 a month for continued access. And it gets results: on average, participants lose 6% of their body weight in 16 weeks.

“Omada Heath has the opportunity to transform the way our health system prevents and treats obesity-related chronic disease,” said USVP’s Jonathan Root, MD, in a statement. “Omada’s first product, Prevent, is based on landmark clinical research sponsored by the National Institutes of Health (NIH) and the Centers for Disease Control (CDC) and has the potential to impact millions via the Web. Prevent provides a major contribution to improving the health of a large at risk population while simultaneously reducing the soaring economic costs of the diabetes epidemic.”

Indeed, in the 2002 NIH study, participants cut their risk for Type 2 diabetes by an average of 58%.

In addition to supporting the “Prevent” rollout, the new funds will also be used to support expansion into other disease states. The funding comes in addition to the $800K seed financing Omada Health raised back in December 2011.

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