Home Health Care Israeli digital therapeutics company raises $21.3M for U.S. expansion

Israeli digital therapeutics company raises $21.3M for U.S. expansion

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DarioHealth makes a glucometer that can be plugged into smartphones with a compatible app. The company plans to bring its solution to more insurance plans after raising funding through a private placement.

 

Digital therapeutics company DarioHealth raised $21.3 million in a private placement, the company announced on Friday. The Israel-based company hopes to use that cash to bring its smartphone-based blood glucometer to more health plans.

DarioHealth CEO Erez Raphael said the U.S. is his company’s biggest market. DarioHealth originally gained 510(k) clearance from the Food and Drug Administration for its blood glucose monitoring system in 2015. About the size of a flash drive, it can be plugged into a smartphone’s headphone jack, where it syncs with DarioHealth’s app. The company also launched a blood pressure monitoring system in July.

“We are helping users understand better how to treat themselves based on the data that we are capturing on our platform,” Raphael said.

The publicly-traded company has a market cap of $33 million. Its stock traded at $6.09 per share at market open on Friday, down from $13.99 one year ago.

DarioHealth currently has more than 40,000 users on its platform, which it plans to build out. In 2018, the company added coaching into its platform as part of a monthly membership. DarioHealth has built out partnerships with major retailers, such as Walmart and Best Buy. It now hopes payers will become a part of that strategy.

“This is something we’re going to grow drastically in 2020. We’re going to sell it to payers,” Raphael said. “The whole market is transforming from just buying a medical device to buying a clinical solution, a full membership that is performance based and value based.”

With the new funding, Raphael hopes to get DarioHealth’s product to as many insurers as possible. He also plans to develop solutions for additional chronic conditions, though he did not specify which ones. The company raised the additional funds through a private placement of convertible preferred stock.

“We expect this will help us ramp up our sales drastically and put our solution into the hands of as many users as possible,” he said.

Of course, DarioHealth isn’t the only company working in this space. Emerging competitor Livongo, which went public in July, built its own device to monitor blood glucose levels and blood pressure. Other companies are also clamoring for insurers’ attention — and dollars.

Raphael sees the competition as a bake-off of sorts: consumers will pick the best device.

“The way we see this evolving, the company that has the best device and the best software will win,” he said. “Long story short, we think the best user experience leads to the best engagement, and the best engagement leads to the best clinical outcome.”

 

Photo credit: DarioHealth

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