Omada Health Raises $23M Series B Led By Andreessen Horowitz For Digital Health That Actually Works

Omada Health, a San Francisco startup that makes digital health therapy programs for people with type 2 diabetes and other serious but potentially treatable issues, has raised $23 million in new funding.

The new investment, which is Omada’s Series B, was led by Andreessen Horowitz, with Andreessen Horowitz partner Balaji Srinivasan joining the startup’s board of directors. Also participating in the round were Kaiser Permanente Ventures and previous investors U.S. Venture Partners and The Vertical Group. This brings the total investment in Omada to $28.5 million.

In an interview this week, Omada co-founder and CEO Sean Duffy told me that his company aims to bridge the gap between proven traditional offline support groups and therapies, and modern digital technology. He said:

“The behavioral science world has figured out how to help people with issues like diabetes, smoking cessation, insomnia, and the like. But it’s mostly been in face-to-face treatments, with group meetings at places like community centers and YMCAs.

We’ve looked at the elements and turned these things into digital programs, and made programmatic experiences that we validate clinically with reproducible results.”

Clinical results mean that Omada’s programs are things that insurance providers are actually willing to pay for. Omada’s flagship treatment, called Prevent, is a 16-week web-based program aimed at addressing prediabetes in adults. Because Omada has been able to provide clinical proof that its programs work just as effectively as traditional in-person therapies, they are covered by healthcare providers including Blue Shield Louisiana, Kaiser Permanente, and Stanford Hospital.

The financial reimbursement is what truly sets Omada apart from other consumer-oriented players in the health space. “In the world of digital health 1.0, people have made great products that people want to use and share with friends, but they haven’t fit with enterprise level health programs,” Duffy says. “Omada has developed consumer grade digital health products, and we also know how to get health systems to pay for them.”

In a separate interview, Andreessen Horowitz partner Balaji Srinivasan told me that it’s that mix of consumer approachability with clinical results that compelled his firm to invest in the company. “Omada is first thing I’ve seen which is a clinically proven way to make a medical intervention over an Internet connection. They’ve developed clinically valid, reproducible, scalable treatments that are delivered in whole or in part over the Internet,” he said. “It’s this very clever combination of things.”

As far as the competitive landscape goes, Duffy says that Omada has raised this money now to take advantage of its position at the nexus between consumer-first apps and enterprise health products. “We’ve seen companies like Fitbit and Weight Watchers increasingly eyeing the enterprise healthcare space. And big health plans like United Healthcare are creating potential competitors too,” he said. “We bridge between these two worlds, and we want to continue to grow in a way that others can’t yet.”

Omada currently has 30 full-time staff, and expects to double its headcount by the end of the year.