Forget smartphones, search engines, and same-day delivery; Big Tech wants to reinvent healthcare.
The Trillion-Dollar Opportunity
As costs skyrocket and outcomes suffer, healthcare is ripe for disruption.
- US healthcare spending is set to reach $6.9T by 2028.
- From excessive prices to overuse and fraud, as much as 50% of annual healthcare spending is deemed wasteful.
Increasingly inefficient, the overall experience lacks convenience, personalization, and transparency, opening the door to more customer-centric options.
Meanwhile, armed with truckloads of cash and even more data, tech giants like Amazon, Apple, and Google are ramping up their healthcare efforts.
Amazon Prime-ary Care
Last week, Amazon announced it was buying primary care provider One Medical for $3.9B.
The deets: A membership-based doctor’s office and telehealth company, One Medical operates 180+ clinics in 25 markets, serving 800K patients and 8,500 employers.
Founded in 2017, the company went public in 2020. But as losses mounted, the stock suffered, trading below its IPO price. That’s when Amazon swooped in.
Why it matters: Expanding its physical footprint while enhancing its ability to deliver in-person care, Amazon hopes One Medical will bolster its burgeoning healthcare ecosystem:
- 2018: Bought digital pharmacy PillPack for $750M
- 2019: Unveiled telehealth service Amazon Care
- 2020: Introduced Halo, a wrist-worn health tracker
- 2021: Launched AWS for Health and at-home diagnostics
Zooming out: It’s easy to imagine a service like Prime Health, where Amazon strengthens its subscription business by making medical care more convenient.
The dream… The company could link medical records with wearable data, Whole Foods orders, and at-home diagnostics to track and incentivize well-being.
The reality… Bringing its customer obsession to a broken industry is one thing, but trying to integrate with, augment, or overhaul the existing system will take decades, or more, to play out.
Apple’s Health Hub
Overshadowed by Amazon’s acquisition, last week, Apple released a 60-page report on its health-related efforts.
TL;DR: Absent any new revelations, the paper aims to articulate a cohesive strategy, unifying Apple’s consumer- and healthcare-focused initiatives around its smartwatch.
- Consumers: Apple Watch, Health App, HealthKit, Fitness+
- Healthcare: ResearchKit, Health Records, government/public health
Referring to Apple Watch as an “intelligent health guardian,” the company said it will continue to empower consumers, doctors, and researchers by breaking down barriers to health data.
On a mission. CEO Tim Cook believes health will be Apple’s “greatest contribution to mankind.” But, its pursuit of that legacy remains a work in progress.
In 2019, tension within Apple’s health unit prompted a number of departures, as employees wanted to put ambitious health projects ahead of wellness features.
And last year, Apple’s secret plan for tech-enabled primary care clinics was revealed. But when the effort stalled, the company reportedly pivoted to selling more smartwatches.
TBD. With more than 1.8B iPhones and 100M Apple Watches in the world, the company’s health hub extends user lock-in and increases services revenue, all while helping sell even more devices.
But, if Apple intends to make health its legacy, sooner or later, it will have to make the leap from wellness to diagnostics, treatment, and full-fledged healthcare.
From consumers and doctors to lofty moonshots, Google, and its parent company Alphabet, is honing in on health. But so far, its endgame remains unclear.
Consumers. Google is weaving health into existing products — including Search, Android OS, Fitbit, and Nest.
Healthcare orgs. Developing clinical software like cloud infrastructure and health records, Google is streamlining data.
Innovation. In addition to building AI to diagnose and treat diseases, the company is also pursuing drug discovery and life extension.
Like its peers, Google has encountered plenty of obstacles on its quest to reimagine healthcare.
Last summer, the head of Google Health departed and the division was dissolved. But earlier this year, the company hired former FDA digital health chief Bakul Patel to lead Google Health… so maybe it’s not disbanded after all.
Elsewhere. Of note, Microsoft is well-positioned to own the healthcare tech stack. Last year, the company paid $19.7B to acquire conversational AI platform Nuance. Plus, its AR/VR platform HoloLens could have medical applications.
Likewise, Meta’s Quest headset is gaining traction in healthcare, with applications in physical therapy, mental health, and surgical training. A step backward, the company recently scrapped plans for a health-tracking smartwatch.
Looking ahead: The healthcare industry is in desperate need of change. Leveraging massive user bases, built-in distribution, and endless amounts of data, tech’s biggest names see their platforms as part of the solution.
But, in the near term, most efforts are either too early or too disorganized to make an impact at scale.
🍎 Precision Nutrition
A billion-dollar industry, people pop vitamins daily… whether their body needs them or not.
On the Fitt Insider Podcast: Elo Health co-founder & CEO Ari Tulla discusses using diagnostics and AI to personalize supplements.
We also cover: using at-home tests and wearables to unlock the power of food as medicine.
Listen to today’s episode here
Fitness tech is contracting after funding and demand peaked during the pandemic.
The latest: Layoffs hit WHOOP and Hydrow last week, with the companies cutting 15% and 35% of their respective workforces.
WHOOP. The wearable maker raised $200M at a $3.6B valuation last August, reaching more than $400M in total.
The company also acquired PUSH, a strength-focused wearable, and introduced its 4.0 device, but it hit snags during the rollout that delayed delivery.
Speaking to The Boston Globe in May, WHOOP CEO Will Ahmed said the company had 700 employees and planned to reach 1,000 staffers by year’s end. Reversing course, the organization eliminated 150 jobs and plans to reorganize multiple departments.
Hydrow. The connected rowing company just raised $55M in March, bringing its total to nearly $270M.
Last year, Hydrow reported 300% YoY growth, reaching 200K users. Appearing on the Fitt Insider Podcast earlier this year, CEO Bruce Smith said the company wasn’t experiencing a slowdown like Peloton.
But now, the company is parting ways with 70 of its 200 employees to “reduce overall operating costs.”
The big picture: As at-home fitness stalls amid an economic downtown, companies are cutting costs—and jobs—in search of profits.
Looking ahead: Many fitness tech companies let pandemic demand and seemingly unlimited growth capital dictate their decision-making. Now, it’s time to restructure after overreaching.
🆘 Shrink Shortage
As the mental health crisis spirals out of control, high-quality care is increasingly difficult to come by.
For context: Compounded by the pandemic, the situation has gone from bad to worse.
- 40% of Americans are dealing with mental health or substance abuse issues, per the CDC.
- In 2020, the US reported a suicide every 11 minutes, becoming the leading cause of death among 10–34-year-olds.
- One in six calls to the suicide prevention lifeline is abandoned before being answered because call centers are understaffed.
Attempting to intervene, The National Suicide Prevention Lifeline recently switched to a three-digit number. Now, dialing 988 connects callers to immediate support for mental health, substance use, or emotional distress issues.
- Teletherapy providers have been accused of putting growth ahead of patient safety.
- Resources, like therapists and funding, are being allocated based on outdated methods.
- Surging during COVID, mental health apps have seen downloads and active users decline.
Takeaway: Curbing the crisis at hand will require a concerted effort across government, healthcare, tech, and more. Unfortunately, as psychologist Alex Stratyner sees it, the problem will likely get worse before it gets better: “There has not been a processing on a grand scale of what it is we just endured [during COVID].”
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📰 News & Notes
- Oura rolls out long-awaited SpO2 capability.
- Elysian Park Ventures, PGA debut golf-focused fund.
- REI launches startup accelerator, unveils its first cohort.
- Withings teams with Medable for decentralized clinical trials.
- Calm names new CEO, co-founders spin off mental health studio.
- Fitt Jobs: Browse thousands of openings at top health & fitness companies.
- Executive Q&A: Silofit’s Wilfred Valenta on shaping the hybrid gym experience.
💰 Money Moves
- Amazon acquired subscription-based primary care provider One Medical for $3.9B
- Smart strength equipment maker Proteus Motion secured $8.5M in a Series A round co-led by Acies Investment and HBSE Ventures.
More from Fitt Insider: Our conversation with Proteus Motion founder Sam Miller
- asensei, makers of motion tracking software and embeddable sensors for smart apparel, received undisclosed funding from SeventySix Capital.
More from Fitt Insider: The Rise of AI Trainers
- Premier League Lacrosse raised an undisclosed Series D from The Chernin Group, WWE, and Kevin Durant’s Thirty Five Ventures, among others.
- Nike-backed slip-on shoe brand Kizik added $20M in a Series B round.
- FemTec Health, a health and beauty sciences company, acquired Ava, a women’s reproductive health startup, and telenutrition company Nutrimedy in separate deals.
- Caraway, a digital platform for women’s mental and reproductive health, secured $10.5M in a seed round co-led by 7wireVentures and OMERS Ventures.
- Summer Health, a message-based pediatric care provider, pulled in $7.5M in a seed round co-led by Sequoia Capital and Lux Capital.
- Meati Foods, a mushroom-based alt-meat manufacturer, raised $150M in a Series C round led by Revolution Growth, with participation from Chipotle and others.
- OWYN, a plant-based protein drink manufacturer, secured an undisclosed growth investment led by Purchase Capital.
- Lottie, a UK-based platform that helps families find senior care, grabbed £6.1M ($7.37M) in a round led by General Catalyst.
- India-based Fitterfly, a startup developing digital therapeutics for diabetes treatment, raised $12M in Series A funding.
- Oral health startup Bristle raised $3M in a seed round led by Initialized Capital.
- Male birth control startup YourChoice Therapeutics landed $15M in a Series A round led by Future Ventures.
- Irish athleisure brand Gym+Coffee secured €17M ($17.4M) in a funding round led by Castlegate Investments.
Today’s newsletter was brought to you by Anthony Vennare, Joe Vennare, and Ryan Deer.