Memorandum

Lark Health raises $70 million from $55 million Series C and $15 million in venture debt – October 8, 2020

New funding to expand relationships with commercial payers and telehealth providers; Series C was led by King River Capital; Lark is now preferred DPP provider for Anthem-affiliated plans

Today, Lark Health announced that it has closed a $55 million Series C funding round, as well as a $15 million venture debt credit facility, raising the company’s total funding above $100 million. The Series C round was led by King River Capital and included additional investments from Lightspeed Ventures, Asset Management Venture, Dr. Jonathon Fielding (UCLA Fielding School of Public Health), and Weili Dai (co-founder of Marvell), all of whom have previously invested in Lark. With this announcement, several new investors joined the ranks of Lark investors, including Franklin Templeton, SteelSky Ventures, and Olive Tree Capital. Deals with Trinity Capital and Bridge Bank made up the $15 million venture debt credit facility.

Lark Health intends to use the $70 million in new funding to “further expand its relationship with commercial payers and telehealth providers for chronic disease prevention and management.” As confirmed again in today press announcement, Lark has had “nearly” 2 million patients “managed” on its platform. Today’s update also calls out Anthem affiliated health plans, in particular, as an area of expansion. Lark powers the AI-driven health coaching available in the Anthem’s mobile app (the Sydney app) and notably, is now Anthem’s preferred DPP provider for all Anthem-affiliated health plans.

As a reminder, Lark Health offers AI-based digital coaching using a “easy-to-use, text message-like modality” to address “whole person” health needs, including diabetes, cardiovascular disease, prediabetes, smoking cessation, stress, anxiety, and weight management. The coaching can incorporate data from smart connected devices, including blood pressure cuffs, scales, and BGMs. In the case of emergencies, Lark can connect users to a nurse in their plan’s network. Lark’s AI-based model differs from that of many other digital coaching companies like Cecelia Health, which provide support via certified DCES. We see AI having potential for being such a powerful tool for the right patients (check out Virta Health’s recent conference on telehealth, AI, and machine learning for more on this), and we would be interested to see how Lark’s AI-based model measures up compared to a person-based approach. Based on the studies published thus far, Lark’s programs have been quite successful with members achieving a significant 1.1% A1c reduction in just four months (see here for more – the baseline was “above 6.5%”), an average 4.3% weight loss in a year (more here), and a 8.4/6.4 mmHg blood pressure reduction in six months (more here).

  • Lark’s Series C is the most recent example of a very strong year in digital health investment. As we wrote earlier this week, venture capital invested in US-based digital health startups hit a record $4 billion in 3Q20, bringing the total through the first three quarters of the year to $9.4 billion. Many of these deals have involved diabetes-related startups, including Virta Health ($93 million Series C), Omada ($57 million raise), and One Drop ($37 million Series C). Of course, the biggest deal this year in diabetes and digital health, more broadly, was the $18.5 billion “merger” between Livongo and Teladoc. We’re looking forward to hearing an update on this deal later this month when Teladoc gives its 3Q20 financial update.

 

-- by Katie Mahoney, Albert Cai, and Kelly Close