Omada Health grabs a new $23M to 'deliver weight loss over an Internet connection'

Health-tech startup Omada Health promises to help people with health issues change their behavior. And it’s starting out with a program to help diabetes sufferers.

“It is a digital therapeutic, and they deliver weight loss over an Internet connection,” Balaji S. Srinivasan, a partner at investor Andreesen Horowitz, told VentureBeat in an interview.

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The company, which is announcing a hefty $23 million in new funding today, takes landmark behavioral science research and turns it into programs that use various digital technologies to help people who are at risk for or suffering from a particular health issue.

Its first program, named Prevent, aims to help people at risk of Type II diabetes through weight loss, a proven way to prevent or reverse the disease in many cases.

The 16-week program is based on the Center for Disease Control’s National Diabetes Prevention program, and consists of an online portal as well as a digital scale containing a cell chip (meaning it doesn’t need to be connected to Wi-Fi). At the beginning of the program, participants are put into cohorts of 12 or so peers and are given a health coach. They receive resources, advice, and notifications through the online portal and app, and use the digital scale to report their weight regularly.

The company is “using software to put people out of their bad habits and put them in a group with good habits,” said Srinivasan.

Using technology to apply behavioral science on a large scale is really at the core of Omada Health. And that’s not an easy challenge, according to Omada chief executive Sean Duffy. If you think of all the ingredients you need to really help someone, “its really hard to scale up face-to-face programs for the millions of people that need them,” he said in an interview with VentureBeat.

The company has already been testing its Prevent program with partnering organizations such as hospitals and health insurance providers, but it plans to use its new funding to double down on its sales to make the program available more widely, as well as to begin working on some potential future health areas, though it has yet to pick its next one.

‘Fitness as a drug — how would you be able to deliver that?’

Andreesen Horowitz led this second round of funding for Omada, with Kaiser Permanente Ventures and existing investors such as U.S. Venture Partners and The Vertical Group also chipping in. Srinivasan will be joining the company’s board.

This deal is actually Andreesen Horowitz’s first major investment in a health-tech company, according to both Duffy and Srinivasan.

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Srinivasan joined the venture capital firm this past December and said he was quickly overwhelmed by health-tech company pitches. However, Omada caught his eye.

Historically, weightloss has been a very difficult challenge, so if it can be achieved through software (and a digital scale), so much more can be possible, he said.

Beyond that, data science can also come into play in Omada’s products — once a participant reaches 25 percent of their weight loss goal, a data scientist can figure out what it would take to get them to reach 50 percent, he said.

“It’s opening all sorts of quantified self things down the line,” he added.

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Omada Health was founded in 2011 and is based in San Francisco. It participated in health accelerator Rock Health’s first batch. This new round brings its total funding to $28.52 million.