Smart Diabetes Management Service Livongo Health Raises $52.5m and Looks to New Markets

Glen Tullman doesn’t like it when someone tells him he’s sick when he’s feeling fine. It’s something he thinks his customers probably don’t want to hear, either. Tullman runs a startup called Livongo Health, which offers a blood glucose monitor accompanied with a service designed to intervene and help coach people through managing diabetes. Livongo Health helps with best practices, but is also designed to intervene before things start to get bad. And Tullman hopes that by collecting enough data and applying the right technology, they can create a tool that will be able to figure out the right touch for getting people to manage — and care about — their chronic conditions. To do that, Livongo Health has raised an additional $52.5 million in a round led by General Catalyst and Kinnevik. The actual product is a cellular-connected blood sugar monitor, which takes your blood sugar readings and then sends that information to Livongo Health’s monitoring services. If the reading falls outside of normal bounds, the company will flag that person and offer some kind of recommendation — like drinking a glass of fruit juice, or going for a walk. If it strays too far out of the norm, they’ll get a call from a specialist who will walk them through what to do next. “Person using it has to love it,” Tullman said. “They can’t just like it, otherwise they won’t use it. We can help them, but only in the moment. Context matters. If I called you up and said, ‘I can be there in 15 minutes to fix a flat tire,’ you’d say why are you bothering me. But if you had a flat you’d be like, ‘that’s awesome,’ and you wouldn’t ask how much it costs.” That last part is meant to be one of the big selling points of Livongo Health, because Tullman said the service aims to get a call to the person within 90 seconds after the reading comes through. The company seeks to reduce the barrier to getting people to use the devices as much as possible. For example, strips for blood sugar tests are also free, and all the data is stored and is easily accessible so the users don’t have to constantly take notes on what their current status is. At the moment, Livongo Health is focused on diabetes management. But given that the company has been able to wedge itself into the budgets of payers and into the minds of consumers, it seems natural that it would treat it as a launch point. Tullman said the next step, in addition to trying to expand internationally, is to also grow into management for other chronic diseases. Many people who manage diabetes might also deal with other chronic conditions, Tullman said, like hypertension or depression. Livongo Health works with self-insured employers and pharmacy benefit providers to offer the company’s products to prospective patients as an option. While the company is only a little more than three years old, Tullman says it’s already collected enough data to demonstrate that Livongo Health is able to save as much as $100 a month for payers in the long run. Early on, it might be difficult to get a profile of what a patient may be like. Further down the line Livongo Health could let a user know that their blood sugar doesn’t typically change that much in the afternoon, but early on the company still needs to capture as much as they can about the person. But starting off, Livongo Health is able to get some basic information from the payer and then will ask simple questions while they’re waiting for their blood sugar tests to complete to help build that profile. From a purely market perspective, it’s clearly an important one given the amount of activity. There are multiple different kinds of startups — like Siren Care, which weaves sensors into fabrics for tracking problems associated with diabetes — trying to help build products for managing diabetes. There are also other startups working on diabetes management like One Drop. Still, this amount of financing gives a company like Livongo Health a robust budget in order to continue expanding beyond just creating a good hardware and on-the-spot experience for managing diabetes. “[Tullman] and I sketched this business out on a piece of paper and we have been involved from the start,” General Catalyst partner Hemant Taneja said. “[The] core thesis was that technology could make a difference in the lives of millions of consumers with diabetes and other co-morbidities and our customers are finding that to be the case. Consumers are enrolling in large numbers and saving on healthcare costs for their insurance companies and employers.” Scaling the educator network might be one of the more difficult parts. The human touch at the end is one of the most important parts of the experience, Tullman said, but it still has to intelligently divvy up the limited number of educators it has among the thousands — or, in the future, potentially millions — of customers in order to ensure that experience blankets its entire user base. That could easily spiral into a problem of just getting enough bodies into the door, but Tullman said a lot of the development being done is on ensuring that those coaches are able to figure out what are the highest-priority patients. “Only when you go out of range, really high or low, does a human intervene and talk to you, and because of that for about every 2,500 members we have a coach,” Tullman said. “It’s a bit like Uber, they work from home and have very sophisticated software they’re running to tell who they’re talking with and what they need. And, they still need to respond in 90 seconds. We know that if you think about it, for a million people, we need 400 coaches. If you think about 30 million, that’s 12,000 coaches — the American Association of Diabetes Educators has more members than that.”

Glen Tullman doesn’t like it when someone tells him he’s sick when he’s feeling fine.

It’s something he thinks his customers probably don’t want to hear, either. Tullman runs a startup called Livongo Health, which offers a blood glucose monitor accompanied with a service designed to intervene and help coach people through managing diabetes. Livongo Health helps with best practices, but is also designed to intervene before things start to get bad. And Tullman hopes that by collecting enough data and applying the right technology, they can create a tool that will be able to figure out the right touch for getting people to manage — and care about — their chronic conditions.

To do that, Livongo Health has raised an additional $52.5 million in a round led by General Catalyst and Kinnevik. The actual product is a cellular-connected blood sugar monitor, which takes your blood sugar readings and then sends that information to Livongo Health’s monitoring services. If the reading falls outside of normal bounds, the company will flag that person and offer some kind of recommendation — like drinking a glass of fruit juice, or going for a walk. If it strays too far out of the norm, they’ll get a call from a specialist who will walk them through what to do next.

“Person using it has to love it,” Tullman said. “They can’t just like it, otherwise they won’t use it. We can help them, but only in the moment. Context matters. If I called you up and said, ‘I can be there in 15 minutes to fix a flat tire,’ you’d say why are you bothering me. But if you had a flat you’d be like, ‘that’s awesome,’ and you wouldn’t ask how much it costs.”

That last part is meant to be one of the big selling points of Livongo Health, because Tullman said the service aims to get a call to the person within 90 seconds after the reading comes through. The company seeks to reduce the barrier to getting people to use the devices as much as possible. For example, strips for blood sugar tests are also free, and all the data is stored and is easily accessible so the users don’t have to constantly take notes on what their current status is.

At the moment, Livongo Health is focused on diabetes management. But given that the company has been able to wedge itself into the budgets of payers and into the minds of consumers, it seems natural that it would treat it as a launch point. Tullman said the next step, in addition to trying to expand internationally, is to also grow into management for other chronic diseases. Many people who manage diabetes might also deal with other chronic conditions, Tullman said, like hypertension or depression.

Livongo Health works with self-insured employers and pharmacy benefit providers to offer the company’s products to prospective patients as an option. While the company is only a little more than three years old, Tullman says it’s already collected enough data to demonstrate that Livongo Health is able to save as much as $100 a month for payers in the long run.

Early on, it might be difficult to get a profile of what a patient may be like. Further down the line Livongo Health could let a user know that their blood sugar doesn’t typically change that much in the afternoon, but early on the company still needs to capture as much as they can about the person. But starting off, Livongo Health is able to get some basic information from the payer and then will ask simple questions while they’re waiting for their blood sugar tests to complete to help build that profile.

From a purely market perspective, it’s clearly an important one given the amount of activity. There are multiple different kinds of startups — like Siren Care, which weaves sensors into fabrics for tracking problems associated with diabetes — trying to help build products for managing diabetes. There are also other startups working on diabetes management like One Drop. Still, this amount of financing gives a company like Livongo Health a robust budget in order to continue expanding beyond just creating a good hardware and on-the-spot experience for managing diabetes.

“[Tullman] and I sketched this business out on a piece of paper and we have been involved from the start,” General Catalyst partner Hemant Taneja said. “[The] core thesis was that technology could make a difference in the lives of millions of consumers with diabetes and other co-morbidities and our customers are finding that to be the case. Consumers are enrolling in large numbers and saving on healthcare costs for their insurance companies and employers.”

Scaling the educator network might be one of the more difficult parts. The human touch at the end is one of the most important parts of the experience, Tullman said, but it still has to intelligently divvy up the limited number of educators it has among the thousands — or, in the future, potentially millions — of customers in order to ensure that experience blankets its entire user base. That could easily spiral into a problem of just getting enough bodies into the door, but Tullman said a lot of the development being done is on ensuring that those coaches are able to figure out what are the highest-priority patients.

“Only when you go out of range, really high or low, does a human intervene and talk to you, and because of that for about every 2,500 members we have a coach,” Tullman said. “It’s a bit like Uber, they work from home and have very sophisticated software they’re running to tell who they’re talking with and what they need. And, they still need to respond in 90 seconds. We know that if you think about it, for a million people, we need 400 coaches. If you think about 30 million, that’s 12,000 coaches — the American Association of Diabetes Educators has more members than that.”