Venture capitalists are pouring hundreds of millions of dollars into healthcare startups pitching lower-cost alternatives to traditional services, and one of their primary targets is diagnostics.
As investors look to back services that can pitch lower-cost alternatives to customers, companies like EverlyWell, the Disrupt Battlefield alumnus that just raised $50 million in new financing, start to look more appealing.
Since its launch on our San Francisco stage in 2016, EverlyWell has expanded from eight test kits that use blood, saliva or urine to diagnose a variety of ailments (from food sensitivities to high cholesterol to fatigue) to now pitching a total of 35 in-home testing offerings to consumers.
The same pressures on American consumers continue to drive EverlyWell’s growth. More employees are opting for high deductible plans offered by employers, which means they’re paying more out of pocket for medical expenses. And increasingly consumers are looking at in-home or DIY tests as a way to reduce costs and improve care by preemptively testing for certain conditions.
While this may result in over-testing, EverlyWell’s use of established testing facilities to perform its diagnostics means that users don’t face the same kind of risks of a bad result that they would from relying on newer technologies, says EverlyWell chief executive Julia Cheek.
Indeed, the vast majority of the tests that EverlyWell provides are what Cheek calls “wellness panels” that are tests that can be initiated by a consumer without the need for a doctor’s referral. The company’s top tests are its testosterone, metabolism, Vitamin D, food sensitivity and STD tests, Cheek says. A fact that’s unsurprising given that those are the tests that the company advertises most heavily around.
EverlyWell is going to use the new cash primarily for brand building, says Cheek. And to expand the company’s array of products and services even further while building on its retail footprint. The company already counts CVS and Humana as partners and began selling its test kits in Target stores nationally earlier this month.
The company has a host of competitors across all of its offerings, ranging from Modern Fertility and Future Family, which are both focused on women’s fertility, to 23andMe, the juggernaut of genetics testing that has raised more than $750 million for its gene-testing services.
Unlike 23andMe, EverlyWell doesn’t provide its test results to third parties that aren’t clinicians working with customers after the completion of a diagnostics screening, says Cheek.
“We do not sell or share data or results,” Cheek says. “[Except] to share with the physician network — they have to be able to review the medical information from the physician and the lab-testing network.”
Backing the company’s latest investment round are longtime investors Goodwater Capital, Next Coast Ventures and NextGen Venture Partners, along with new investor Highland Capital Partners.
“Lab testing is arguably one of the most important steps in preventing and managing illness, but has been largely ignored by digital health companies,” said Eric Kim, managing partner at Goodwater Capital, in a statement. “With a clear consumer pain point and a strong executive team that integrates both consumer and healthcare expertise, EverlyWell is successfully navigating an entrenched industry to offer consumers an opportunity to take charge of their own health.”