Did you know that over 11% of the US population has diabetes?
- National Diabetes Statistic Report 2022
Introduction
HealthTech is one of the hottest markets right now to be investing and building in…and for good reason.
the global digital health market size was valued at $175.6B in 2021 with a compound annual growth rate (CAGR) of ~27% from 2022 to 2030.
One hot topic within this broader HealthTech market is the rise of innovative diabetes technologies.
Diabetes is a chronic health condition that affects how your body turns food into energy. With diabetes, your body doesn’t make enough insulin or cannot use it as efficiently as it should.
Today’s trend: the application of both modern technologies (e.g. AI, ML, or algorithms) and business models (e.g. subscription services or marketplaces) to an archaic and untapped industry — monitoring devices for diabetes.
Startup Ecosystem
What are some innovative startups capitalizing on this trend right now?
Diatech Diabetes - a MedTech startup developing monitoring systems to personalize insulin delivery for patients with diabetes.
9am.health - a virtual diabetes clinic launched in April 2022 designed to provide people living with pre-diabetes and type 2 diabetes access to personalized care and affordable medications from their homes.
Unicorn? 🦄
So the real question is: are these startups $1B exit opportunities?
Let’s dive a little deeper…
Diatech Diabetes = personally, I think it’s a little too early to make a substantial claim because they’re still early in the product development phase. However, I do think this could be a potential $1B exit. Why? ⬇️
Strong Founding Team ✅CEO was personally diagnosed with diabetes at age 9; has seen his condition as an “opportunity rather than a disability”
Other senior executive leadership team members have very strong, multi-year backgrounds focused on diabetes technology research and medical device development.
Team diversity and size ❌Founding and advising team lacking in racial and gender diversity— all are white men (except for the CTO).
Traction / Interest ✅Robust partnerships with the National Institute of Diabetes and Digestive and Kidney Diseases (NIDDK) and ZeroTo510, a medical device accelerator.
Granted $300,000 research grant from the NIDDK in Sep. 2021 to develop their first product, SmartFusion™, an algorithm designed specifically for insulin pumps to detect different types of infusion failures.
Industry is very hot (medtech, healthtech, diabetes care tech)
Investor signaling, valuation velocity ❌
Last fundraising round was seed (undisclosed amount) from ZeroTo510.
However, this is a medical device startup so the space is very slow and regulated.
I think if this was a consumer or education or climate tech startup, this statistic would be much more alarming.
This doesn’t seem very promising though, especially because there are a ton of other medtech startups out there with lots more investor traction and millions of venture dollars raised.
Lacking press release presence. Only one public article on their work published here.
Timing ✅
Founded in 2018, Diatech Diabetes is positioned to grow substantially with the COVID-19 tailwind.
Their personalized, algorithmic approach to solving the infusion set failure detection crisis is really powerful and makes a lot of sense in the current market.
Market size and paint point ✅
The global diabetes care market size was valued at $26.7B in 2021, with an expected compound annual growth rate (CAGR) of ~8.5%.
9am.health = 100% yes! Why? ⬇️
Strong Founding Team ✅
Co-Founders, Frank and Anton, were diagnosed with Type 1 diabetes 25+ years ago.
Successful past exits: Co-founded an app in 2012 called MySugr for diabetes self-management; sold the company for $100M in 2017. Clearly both diabetes and business experts!
Traction / Interest ✅
$20M in funding from StartUp Health, Founders Fund, Human Capital, and more!
Tons of press in major news outlets (e.g. Crunchbase, Techcrunch, Healthline, SoCalTech, PRNewsWire, etc.)
Working at the cross-section of powerful trends: personalization, digitization and telehealth.
Timing ✅
Founded in 2021 and has landed sufficient traction amongst various investors and press
Their affordable, personalized, subscription-based platform is the only digital front door for diabetes care in the market right now, giving them premium market share.
Market size and paint point ✅
Did you also know that the average person in the US living with diabetes spends about $16,750 per year on medical expenses, even with insurance? This has been an enormous pain point in the diabetes care market for decades.
9am.health’s virtual diabetes clinic starts at just $25 per month.
As someone with close familial connections to the life-long struggles of diabetes, the emergence of these incredibly innovative solutions on the market make me excited and hopeful for a better future. If you made it this far, thanks for reading!