Health IT, Startups

Livongo raises $45M to support customer growth in diabetes management

Merck Global Health Innovation, Cowen Private Investments, and the investment arm of Blue Cross Blue Shield of Massachusetts are among its new investors.

livongo in touch deviceLivongo a patient-focused diabetes management business with a connected blood glucose meter as its centerpiece, has raised a new round of funding to support the expansion of its customer base as well as product development.

Merck Global Health Innovation, Cowen Private Investments, Sapphire Ventures, Zaffre Investments, the investment arm of Blue Cross Blue Shield of Massachusetts and Wanxiang America Corp. participated in the Series C round. Previous investors 7wire Ventures, General Catalyst, Kleiner Perkins Caufield Byers, and DFJ Ventures also took part in the round.

In a phone interview with CEO Glen Tullman, a former CEO of Allscripts, he talked about the challenge of developing a business that would resonate with patients.

In Touch, Livongo’s connected glucometer, has a few functions: It uploads readings online and it also provides data analytics. It can notify the user’s care team and their social network when levels fall outside of the norm, and it provides coaching insights based on their data. Users also get access to unlimited test strips.

“When you develop a solution, there are three things you need to do to make an impact,” Tullman said. “It has to be a product that people will love or else they will stop using it. It has to have measurable results and it has to save money. If you can’t deliver savings, there’s no point.”

He added that one problem that many companies have had developing products for patients is that the technology makes it harder for patients to manage a condition.

“We had to figure out how to make [our product] easy to integrate into their lives. We made the test strips free, we know when you need new ones, so you don’t have to order more, and users don’t have to write down and track their numbers — they can access their own data in the cloud. We removed the hassle. When you are responsive to consumers, it shows,” said Tullman

Asked about the significance of Blue Cross Blue Shield of Massachusetts’ investment arm’s participation in the round, he said, “Any time you have one of the Blues jumping in, other [Blue Cross Blue Shield businesses] are watching and learning — that’s what they do.”

Self-insured employers, such as Lowe’s, make up the largest portion of its customer base. But it sees payers and health systems as one day overtaking these companies as its largest sources of customers. It has steadily built partnerships with the likes of electronic record provider Cerner, health IT vendor ExpressScripts and with employers such as Mount Sinai Health System. Last month, it partnered with employer wellness program developer HealthStart. It has also built a network of payers such as Mission Health, Healthcare Partners, and Cornerstone.

Livongo raised $20 million last year and also added chief medical officer Dr Jennifer Schneider, who served in the same role at Castlight Health.

The World Health Organization’s recent stats on the chronic condition show that 62 million people in the U.S. have Type 1 or Type 2 diabetes.

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