Omada Health lands $4.7M to roll out prediabetes program

By Neil Versel

Omada Health PreventOmada Health, developer of Prevent, an online and mobile diabetes prevention program, has locked up a $4.7 million, Series A venture financing package. U.S. Venture Partners (USVP) led this round of financing, with the help of the Vertical Group, Founder Collective, NEA, TriplePoint Capital, Kapor Capital and unspecified angel investors, Omada says.

The cash infusion will allow Omada to expand the rollout of the 16-week behavior-modification and weight-loss program for people with prediabetes and eventually expand its services to other disease states, according to the San Francisco-based company, which was part of healthcare business incubator's Rock Health's inaugural class in 2011.

"We're starting with prediabetes," says CEO Sean Duffy. The company cites figures from the Centers for Disease Control and Prevention that 78 million Americans have prediabetes, namely elevated blood sugar that falls short of true type 2 diabetes.

Preventing that many people from developing type 2 diabetes potentially can save billions of dollars, according to Omada. A 2010 study in Health Affairs found that medical costs for treating prediabetic symptoms are about $443 per person, compared to $9,975 for those who have been diagnosed with diabetes.

The Prevent program, which combines wireless home monitoring devices with online tools, coaching and social media, helps promote lifestyle changes to encourage weight loss and healthy habits. "It can dramatically reduce the risk of going from prediabetes to type 2 diabetes," Duffy tells MobiHealthNews. "It becomes harder to make the changes the farther you move along the continuum [toward diabetes]."

The system is based more in social science than gamification, according to Duffy. "I think of it more as a class," he says.

Right now, Omada's Prevent program is focused squarely on prediabetes because of the potential impact of early intervention. Omada is rolling out Prevent to "a select group of self-insured employers and providers in the United States," according to a press release, though Duffy says he is not ready to announce those partners' names. Expect some details about them in about six weeks time.

There will be new disease states "almost certainly" in the future, including type 2 diabetes. "We want to build a lasting, big company," Duffy says. But do not expect to see the variation for type 2 diabetes until 2014 at the earliest.

The healthcare industry is going to making "smart investments on the right people," according to Duffy. That means those at the highest risk and with the highest potential reward.

"It's a high-touch program," Duffy says. It may not be suitable for someone with end-stage renal disease as a result of advanced diabetes, but these types of interventions are great for patients with a precondition or an early-stage disease.

The business model is to go through employers and insurers, rather than the tougher direct-to-consumer route, but Duffy says Omada has designed its program, app and website to appeal to the masses and will sell to individuals. "We want people to land on the website and say, 'Wow, this looks pretty interesting,'" Duffy says. "That's when I know we'll have succeeded."

He expresses a belief that a lot of DTC healthcare companies failed because "they didn't work hard enough to turn their products into something delightful." Explains Duffy, "You need to draw [consumers] in and make it enjoyable."

Omada actually is competing with the likes of Dropbox, Facebook, Airbnb and other Silicon Valley companies that hire many consumer-focused Web programmers. "But ours is based in real medical evidence," Duffy says.