Investors and health plans are taking a closer look at digital programs for musculoskeletal conditions, hoping to solve common ailments of back and shoulder pain. Last year, Omada Health bought remote physical therapy startup Physera. Now, DarioHealth is throwing its hat into the ring.
The New York-based digital health startup acquired Upright Technologies, a startup focused on back and shoulder pain, for $31 million. The deal included $29.5 million in stock and $1.5 million in cash.
Tel Aviv-based Upright makes a small, adhesive device that users can stick to their back to keep track of their posture. It buzzes to let them know when they’re slouching, and also comes with an app to help monitor their progress. The company currently has 90,000 users.
Both companies started by selling their devices directly to consumers, but are now looking to package together their solutions to sell to health plans.
For DarioHealth, it designed a glucometer that users could plug directly into their smartphone to keep track of their blood sugar. But since then, it has looked to add mental health services to its platform, and struck a partnership with Vitality Group to sell its solutions to self-insured companies.
“Similar to DarioHealth, we have had great success building our product with roots in the D2C market and have begun to make inroads into the B2B space, but we believe there are significant synergies that can be derived from being part of a broader digital health platform,” Upright CEO Oded Cohen said in a news release. “We believe that together with DarioHealth, we can deliver an integrated, scalable, virtual platform to reduce employer, payor, and provider healthcare costs and offer lasting and impactful health outcomes for end-users.”
Cohen will join the company’s board of directors and become general manager of Dario’s musculoskeletal division after the deal closes.
Upright is expected to bring in revenues of $12.8 million from last year, and DarioHealth is expected to report revenues of $7.6 million. Combined, the company is expected to have more than 150,000 members and pro-forma combined revenue of more than $20 million for 2020.
At the same time as the deal, Dario announced it had raised $70 million in a private placement of its stock, which would bring its total cash on hand to $90 million. Investors included Nantahala Capital Management, LLC Perceptive Advisors, Driehaus Capital Management and others.
At market open on Wednesday, the company’s stock was valued at $22.77.