Omada Health Raises $23 Million Series B for Web-Based Diabetes Program


San Francisco, Calif.-based Omada Health announces a $23 million series B round led by Andreessen Horowitz and with additional funding from Kaiser Permanente Ventures.  Returning investors U.S. Venture Partners and the Vertical Group both participated as well. Omaha closed a series A worth $4.7 million in March 2013, bringing its all time total raised to $28.5 million.

The investment marks Andreessen’s first major entrance into the digital health market, though with its “software is eating the world” playbook, it was only a matter of time. Balaji Srinivasan, an Andressen general partner and Stanford University professor of Startup Engineering, explains ““The crucial thing is it has to be a software company.”

Founded in 2011, Omada Health was a member of Rock Health’s inaugural class in San Francisco. The startup takes behavioral science research, as well as best practice clinical guidelines for treating chronic diseases, and builds an app around them that is designed to coach people toward healthier lives.

Omada’s first product targets type 2 diabetes. The platform is web-based, and users are paired with a weight loss coach and a team of 10-15 peers at the start of a 16-week web-based program. Each week participants get reading and homework assignments on nutrition, exercise, and other relevant topics. Discussions about the readings and the program are facilitated among the group on message boards. Srinivasan says that Omada is “using software to put people out of their bad habits and put them in a group with good habits.”

Users are also maintaining a food diary on site, which is reviewed by the coach so that recommendations can be made to maximize essential nutrients and minimize empty calories. Omada sends each participant a pedometer and wireless scale that automatically update the platform with both daily weight readings and daily activity totals.

Omada markets its services to employers, providers, health plans, and everyday consumers. For consumers, the program costs users $130 per month for the first four months, and $12 per month thereafter. Enterprise customers pay based on results, with average organizations seeing a 5 percent weight loss over a year. Omada already counts Kaiser Permanente, Blue Cross Blue Shield of Louisiana, and Stanford Hospital as enterprise customers.

With its first product officially launched and gaining traction, Omada is now working to expand its platform to support smoking cessation and more chronic diseases. The new funding will be used to support this development, as well as to ramp up its sales division.

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