You’ve def seen them: digital health startups… they’re everywhere.
Per The Wall Street Journal, $7B of VC money hit the sector in Q1 2021, the highest figure in at least 10 years.
The main customers for these health services are corporate-benefits departments…
… and they are revolting against the flood of choices
Benefits execs are pushing startups for a few changes:
- Expand offerings: There are a number of individual apps that specialize in one niche (e.g., heart health, sleep tracking, mental health). Corporates want combined offerings, so they don’t have to subscribe to a million options.
- Pricing: Corporates want to pay by use, instead of purchasing monthly subscriptions that often go unused.
- Most importantly: They want companies to prove that the product actually delivers better care and lowers costs.
Health companies are taking note
Telemedicine provider Teladoc moved into diabetes monitoring with a $13.9B acquisition of startup Livongo.
That’s one of many deals for Teladoc, while its main competitors — like MDLive, Doctor on Demand, and PlushCare Inc. — are active on the M&A front, per WSJ.
And in a very meta development, here’s another hot investment area: apps that help you manage other health apps (AKA care-navigation apps).
At the current funding pace, you’ll soon see these apps everywhere too.
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