Diabetes care platform Virta Health raises $65M and becomes a unicorn

With this funding the company has now raised over $230M and is valued at $1.1B

Even before COVID hit, the number of people with diabetes was at crisis levels: in 2018, 34.2 million Americans, or 10.5 percent of the population, had it. While the American Diabetes Association says that, so far, there's not enough data to show if people with diabetes are more likely to get COVID-19, it does not that those who already do "are more likely to have serious complications" from the virus. 

That makes services like Virta Health, a company that looks to reverse type 2 diabetes and other chronic metabolic diseases without the use of medications or surgery, even more vital.

"The out-of-control growth of chronic metabolic diseases—now a $1 trillion price tag in the U.S each year—has created an economic and moral imperative that we do more to create solutions that solve the epidemic we are facing," Sami Inkinen, Virta Health's co-founder and CEO, told me.

"This is especially important amid the COVID-19 pandemic, which has been ruthless on those living with diabetes and other chronic illnesses."

The company just received a large cash infusion, announcing on Wednesday that it raised $65 million in a Series D round led by Sequoia Capital Global Equities, with participation from Caffeinated Capital participated. Virta, which raised a $93 million round in January, now has more than $230 million in total funding. This latest round also valued the company at over $1.1 billion.

The decision to raise another round so quickly after the last one is due to the increased demand the company has seen thanks to COVID, with Virta seeing over 150 percent year-over-year growth. 

"When we announced our Series C in January, we never could have anticipated what 2020 would bring to Virta, and to the world at large. Demand for Virta was already rapidly growing at that time, and now as we close out 2020 we’ve seen an even greater acceleration given the importance of virtual care during the pandemic, and the risks created by COVID-19 for people with chronic conditions," Inkinen said.

"So, this Fall, when given the chance to work with the team at Sequoia Capital Global Equities and secure the resources needed to supercharge Virta’s impact, we couldn’t pass up the opportunity."

Founded in 2014, Virta Health has developed a treatment that directly addresses the root cause of type 2 diabetes through a system for delivering continuous remote care through technology. That means it has doctors and physicians on the back end making clinical decisions in real time, along with a clinical protocol to reverse insulin resistance.

Patients start with lab work and a televisit with a doctor, which allows the company to develop a personalized treatment plan. Then there are two phases for the Virta Treatment, the first being diabetes reversal, followed by the longer term success phase.

In the first phase, the company puts the doctors and scientists into the pocket of each patient through their smartphone, which allows them to monitor the patient's vitals remotely. Virta's clinical team analyzes what's gong on and, based on that, might adjust medications or nutrition or behavior. That is iterated on a daily basis until the type 2 diabetes is reversed. For the long term success phase, Virta then makes sure that the diabetes stays in remission, so it uses less clinical decisions and more daily problem solving about what might get the patient off track. 

By using Virta, 94 percent of patients reducing or fully eliminating insulin use. Virta’s weight loss results exceed the goals of the National Diabetes Prevention Program and the FDA benchmark for weight loss drugs by nearly 150 percent. 

The fact that the company has operated as a 100 percent virtual clinic since inception, with a Continuous Remote Care model that provides patients with access to clinicians and coaches,  perfectly positioned Virta during the pandemic. 

"Combine this model with the fact that we help reverse one of the primary risk factors for COVID-19 complications, and it’s not a surprise that we’ve seen adoption skyrocket during the pandemic. We’ve experienced triple digit percent customer growth already this year," said Inkinen, who made sure to distinguish between what Virta does from telemedicine. 

"Our Continuous Remote Care platform offers patients near 24/7 access to coaches, and allows providers to monitor patients and make adjustments to medications and care plans on a daily basis. Combined with our nutrition therapies, this model of virtual care is how we can deliver outstanding glycemic control, which is one of the most important modifiable risk factors for COVID-19 complications."

Since 2018, Vitra has signed with over 100 customers, including the Veterans Administration, the State of Alabama, and many others across industry and government, including several in the Fortune 50 and a major launch in North Carolina. It also expanded its virtual clinic offerings to include prediabetes reversal, obesity treatment and provider-led type 2 diabetes management.  

The company plans to use the new funding to expand research and development to other metabolic conditions beyond diabetes and related conditions, including pre-diabetes and obesity, though he couldn't give me any specifics on what those conditions might be. 

"There is no shortage of need there, both in the broader context of the worsening diabetes epidemic, and what employers, health plans, and government organizations are focusing on. Chronic metabolic conditions are a top health concern, and payers are frustrated that they have an array of options, but none are doing much to help their populations or curb their out-of-control growth in healthcare costs," Inkinen said. 

"For any future expansion, we’d exclusively look to conditions where our expertise can make a meaningful impact on patient health, and where we have the data and evidence to demonstrate that."

The money will be used to invest further in developing its technology and growing its team to support demand. Ultimately, though, this new investment will help the company continue its mission of giving every person with diabetes the option to reverse their condition.

"Existing solutions for diabetes treatment simply aren’t working. There are dozens upon dozens of solutions for payers on the market today. It is difficult for employers to keep up with all of them, especially when these options are providing little to no long-term benefit," Inkinen told me.

"What we hear is that we consistently deliver on the outcomes we promise, and they are orders of magnitude better than what else is out there. This investment from Sequoia Capital Global Equities will enable us to move into our next phase of growth and bring our proven reversal treatment to the masses."