- January 14, 2021
- Posted by: Bastion team
- Category: Markets
Sumi Das, CapitalG
There are more companies like Livongo on the way, Sumi Das, a partner at CapitalG, told Business Insider.
Livongo, a healthcare company bought by Teladoc last year, manages care for people with diabetes, hypertension, and other chronic conditions through a mobile app. The company is often given credit for showing the industry that this kind of business model – tech-forward, consumer-focused – can go public and do well.
Now two trends are boosting companies like Livongo: the pressure the coronavirus pandemic is putting on health plans and employers to offer healthcare remotely, and the fact that chronic conditions still make up the vast majority of healthcare costs, Das said.
“I think you’re going to see a massive growth curve for digital health tools that are focused on chronic conditions,” he said. “And the success of Livongo this year has only accelerated that.”
Finding remote ways to manage expensive chronic conditions
CapitalG for its part is focused on the areas that are particularly expensive to pay for, so cardiovascular, oncology, mental health, and musculoskeletal conditions as well as chronic kidney disease, he said.
Hinge Health, which isn’t backed by CapitalG, is an early leader in the musculoskeletal market, he said. Back surgeries alone can cost tens of thousands of dollars, which doesn’t include the requisite rehabilitation and prescription drugs.
“We believe that there’s a huge opportunity there for digital tools to make a meaningful impact,” Das said.
The next wave of Livongos won’t necessarily be M&A targets
But instead of going the mergers and acquisitions route, as Livongo did with Teladoc earlier this year, Das predicts that we’ll actually see startups get bigger on their own. The startups will building solutions for conditions that have high rates of comorbidities with their original offering.
Like how Livongo moved into hypertension after diabetes, he said, Omada, which offers programs for diabetes and behavioral health, might tackle weight loss. People, including benefits managers, like simplicity, which isn’t achieved when they have to route several populations to several different companies and apps, many of which don’t offer appointments with specialists.
“Our kind of rough mental model is that both employers and payers want to buy best of breed solutions for the top three to five conditions, because they want to be sure that they will drive high engagement and cost reductions,” Das said.
Bastion Balance Seoul, Korea.