Livongo — An Evolution From Digital Health Startup to Market Leader
by Emily Melton, Managing Partner
We are thrilled to congratulate Livongo on its successful IPO, an exciting milestone in the company’s ongoing journey of success and impact. As an early investor in Livongo, I have witnessed the company evolve from a young startup into a market leader in digital health. Livongo serves as an exemplary case study for how to drive positive change in healthcare through a new experience for its members. The company has created a new paradigm that puts patients first and drives positive clinical outcomes. Livongo’s IPO signifies not only the success of one company but also an industry on the threshold of transformation. As an investor, this moment is validating. As a patient, this movement is life-changing.
All entrepreneurial ventures start with a team, and I can attest to Livongo’s extraordinary talent. The first time I met Livongo’s founder, Glen Tullman, I was struck by his contagious enthusiasm and optimism. Glen was not simply building a company; he was pursuing a mission to save people’s lives, and he assembled a team who shared his vision. Livongo’s team is comprised of passionate individuals with personal histories and unique insights into the problems they are solving.
By building products for themselves and their loved ones, the team created solutions with empathy and soul, a stark contrast to many health products that are perceived as sterile and dispassionate.
From the beginning, Glen recognized that employing an interdisciplinary team is critical to catalyze behavioral change in healthcare. Livongo’s team consists of healthcare veterans who have the insight and humility to recruit technologists and executives from other industries. Together, this diverse group leveraged insights from consumer, enterprise, and healthcare applications to arrive at a winning solution. It makes sense to “the buyers” of healthcare and patients, while producing positive clinical results at a reduced cost. The qualities presented by Livongo’s team reflect emerging trends in the healthcare ecosystem; an approach to patient care that combines empathy, technology, and collaboration.
At Threshold Ventures, we talk about the “Threshold Moment” — the moment when technology and market forces converge and create an environment ripe for innovation. For Livongo, the threshold moment occurred when mounting healthcare costs converged with an increasing prevalence of chronic disease and advancements in mobile technology.
The rise in chronic disease in the US is a critical crisis facing our healthcare system, not only in terms of costs but also because it is a leading cause of death and disability. Currently, more than half of adults in the US have at least one chronic disease. Livongo’s first product addresses diabetes, a chronic disease that impacts more than 30 million adults in the US with an additional 84 million who suffer from prediabetes, according to the Centers for Disease Control and Prevention. In 2017, researchers estimate that diabetes cost the US $327 billion annually in treatment costs and lost productivity.
The US healthcare system has been designed around one-time treatments instead of continuous care for people with chronic diseases. Without new and cost-effective solutions, our healthcare system would not be able to keep up with the rising costs due to chronic disease.
Furthermore, patients today want products that empower them to take control and ownership over their own behaviors and health outcomes. Mobile technology, artificial intelligence, and consumer interfaces have transformed other industries, and healthcare was ready for a solution that could leverage these technologies as well.
Livongo has created a solution that improves health outcomes, empowers patients, and reduces costs. Livongo’s applied health signals platform — combining a user-friendly mobile app, 24/7/365 personalized coaching, connected devices, and data science — represents a new, clinically validated care delivery model for patients with chronic conditions. Peer-reviewed studies show that Livongo’s diabetes program significantly lowered patients’ HbA1c — a clinical indicator of blood glucose control — and reduced patients’ medical spend by 21.9%.
By taking a proactive approach to health, Livongo has created a win-win situation for patients and payers.
As an early-stage healthcare investor, I know how hard it is to scale a healthcare company. Livongo has shown that value-based care can generate revenue while improving clinical outcomes. I am beyond excited for Livongo’s successes, but my excitement for this moment transcends that of a single company. Livongo is one of four digital health companies that are expected to go public this year, ending the 2.5-year dry spell since the last digital health IPO in 2016. At Threshold, it’s our privilege to back mission-driven teams. Livongo’s IPO success signals that the market has an appetite for digital health. Today is just the beginning.
