In the recent times investors are keen on investing in digital health companies. This has become possible because customers are becoming more aware about personal health data. Personal health data, combined with new devices and algorithms translates into a great opportunity for the digital health firms.
Livongo, based at Silicon Valley, is going public and has already finalized bankers for its upcoming IPO. A company that gives technology to reduce the costs of health care, Change Healthcare, has filed last month its prospectus. Last year, startups of health technology raised $8 billion, but the important exits were from acquisitions like Amazon’s acquisition of PillPack, an online pharmacy for $1 billion and like Roche’s acquisition of Flatiron Health for $2 billion. Once they debut investors need companies to go public and impress financially. An investor of health at venture capital firm New Enterprise Associates said that having a funded company of digital health going public and performing well validates the thesis of digital health. Investments of Wu include Pager, a platform of digital health that helps customers connect with providers and Bright Health, a provider of health insurance.
Till date most of the IPOs that are into health technology have been from such companies that have business models familiar to Wall Street. Athena Health and Veeva Systems sell software that is cloud-based and another IPO Fitbit sell devices.
Digital health companies are different as they emphasize a combination of services and technology which can include behavioral coaching that is app-based or nudges for endorsing healthy behavior.
Livongo founded 2014 built its business empire by working with biggies like Walgreens, Amazon, Microsoft, Delta and PepsiCo. It provided technology that working people who have diabetes can use to manage and monitor their disease. This package includes unlimited test strips and lancets, and a glucose meter. The company provides coaching through its app to let people stay healthy which can result in cost savings for the employers who are paying the bill. Livongo expanded its services beyond diabetes. It provides services to manage high blood pressure, anxiety, depression and other mental health conditions.
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