Another step closer

Another step closer

Today Livongo, one of the many companies in the increasingly crowded interconnected diabetes management (IDM) market, announced they have raised $20 million in fresh capital. According to an article posted on the Wall Street Journal’s web site;

“Livongo Health has secured $20 million from Kleiner Perkins Caufield & Byers and others to expand a technology-enabled service to help people with diabetes better-manage their condition.”

Livongo isn’t the only start-up that has benefited from the strong interest in this space as TelCare and Glooko have also received additional capital recently.

Frankly Diabetic Investor is not surprised by this as venture firms see what we do, that one day IDM will be the standard of care. Also like Diabetic Investor they aren’t yet sure which company or which strategy will emerge from the pack.

All we do know is that with each investment in this the category the old guard is one step closer to extinction. Soon Bayer will land in the hands of Panasonic/KKR which we suspect will just be the first of many private equity deals in the conventional glucose monitoring space. Deals, given the price being paid by Panasonic/KKR, which won’t yield the multiples Roche, Abbott (NYSE:ABT) and Johnson and Johnson (NYSE:JNJ) had hoped for. One thing that can be said about private equity is these firms aren’t stupid and they will not overpay to enter a declining category. Buying right is the key for them.

Diabetic Investor also believes with major venture firms committed to this space it won’t be long now before Apple, Google, Samsung and other high tech companies become even more aggressive and start spending some of their huge amounts of cash to become more firmly entrenched in this market. This is the exit strategy for the venture firms as they know it won’t be the old guard who acquires a company like Livongo but some high tech company.

Yes this space is changing and changing for the better. Our advice is to fasten your seat belts as this will be an exhilarating, sometimes scary yet fascinating ride.