The coronavirus pandemic has led to a massive shift in the way healthcare is delivered.
Millions of people have been staying at home to avoid infection. Doctors instead have been meeting with patients over phone and video calls instead of at their offices. Private insurers and the federal government helped move the shift along by relaxing rules on telehealth.
That led to new business opportunities. In August, the telehealth giant Teladoc announced an $18.5 billion deal to acquire Livongo, a chronic-care company. Shortly after, the telehealth company American Well made its stock-market debut.
The pandemic also was a turning point for Lark Health, a startup with a tool that helps 2 million people manage and prevent chronic illnesses such as diabetes and high blood pressure. The tool syncs with devices that remotely monitor information like weight and glucose levels and coaches patients via artificial intelligence.
"The market really has changed so dramatically, much because of COVID," Lark CEO and cofounder Julia Hu, 35, told Business Insider. "There is so much more of a need for virtual healthcare" during the pandemic, she added.
Investors are noticing. On Thursday, the startup said it raised an additional $70 million. A total of $55 million of the investment was equity from investors in a round led by King River Capital, and $15 million was in venture-debt credit facility with Trinity Capital and Bridge Bank.
Among the new investors were Franklin Templeton, SteelSky Ventures, and Olive Tree Capital. Existing investors include Lightspeed Ventures, Asset Management Ventures, Golden Seeds, and Weili Dai and Sehat Sutardja, who cofounded the semiconductor company Marvell.
The latest cash infusion brings Lark's total funding to $100 million.
"The two rounds together really afford us with the capital necessary to scale our vision of infinitely scalable personal, compassionate care," Hu said. She hopes in the coming years that the company can reach tens of millions of people, she said.
On top of that, Lark said Thursday it was expanding its contract with the health insurer Anthem, where it'll provide its artificial-intelligence coaching through the plan's mobile app.
Rajeev Ronanki, Anthem's chief digital officer, said in a statement that Lark could "achieve health outcomes on-par with programs based on in-person interactions."
Lark gives users counseling through text messages they can send and receive at any time of the day. People use it to manage their weight as well as diabetes and cardiovascular disease. It also helps people manage stress and anxiety, and offers counseling on quitting smoking.
If an emergency comes up or patients have a complex question, Lark provides instructions for next steps or has nurses and health coaches give patients a call.
For her work with Lark, Business Insider named Hu one of 30 leaders under 40 who are transforming healthcare.
Hu is planning for Lark's future
With the additional capital, Hu said Lark would hire more data scientists, software engineers, and AI experts, and the company hopes to attract even more health insurers and pharmacy benefit managers.
Right now the company contracts with health insurers so that they can offer Lark to beneficiaries. Hu said it was important to her that patients have no copays for using Lark, so payments come from the insurer.
Lark's program that helps prevent diabetes has been recognized by the Centers for Disease Control and Prevention, and studies have shown it helps patients.
One study that looked at 25,000 people using Lark's diabetes program found people had an average weight loss of 4.3% after one year. The study specifically measured people who live in parts of the US where doctors are scarce. Another study in the Journal of Hypertension found the members reduced their blood pressure, therefore reducing the risk of stroke.
Hu wants Lark to help people manage even more chronic conditions and is deciding which one Lark can tackle next, she said. She didn't say which conditions the company was considering but added, "It's going to be the big ones that a lot of folks are struggling with."
Hu's advice to budding entrepreneurs: 'Aim for a lofty goal'
Hu created two other companies in clean tech before founding Lark with Chief Technology Officer Jeff Zira in 2011. She called Lark her "real passion." She knew chronic illnesses were responsible for 90% of healthcare costs and wanted to find a way for more people to get affordable care.
Hu understands how hard it is to manage a health condition because she has one herself. For the first 25 years of her life, her condition was undiagnosed. Her father had to quit his day job to take care of her.
During the coronavirus pandemic, Hu said she has benefited from Lark's mental-health coaching tool whenever she has been stressed or feeling down.
"The reason I started Lark was because I realized how important it was for people to get compassionate and high-touch care," she said. "Unfortunately there are not enough doctors and nurses in the world to really take care of all the chronic patients out there struggling with chronic disease, or at a high risk for chronic conditions, or struggling with behavioral-health issues."
When she started, she said, the idea of using AI nurses to treat patients virtually had seemed "a bit fantastical and sci-fi," but she said she "stuck to her guns" that technology was needed to transform healthcare.
"Oftentimes it's easier to solve an incremental problem in any industry, but I would urge entrepreneurs to focus on the largest problems they feel passionate about and to aim for a really lofty goal," Hu said. "That north star is what is going to carry you through many years."