VCs Pour Over $220 Million into This Business Model
Index Ventures, Y Combinator, General Catalyst, Forerunner and a16z
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Poor Nutrition is the Root Cause of Chronic Diseases.
In Europe, 61 million people have Type 2 Diabetes, while in the US, the figure is 38.4 million.
Over 49 million Europeans have cardiovascular disease, compared to 16.3 million in the US.
The World Health Organization lists an unhealthy diet as a top risk factor for global mortality and disability.
The Solution
Several companies are addressing this issue by providing personalized nutritional care services, leveraging technology and expert guidance from registered dietitians.
Foodsmart: The company offers a telehealth nutrition solution that connects individuals with personal dietitians. Members can access meal planning, grocery delivery, and a food marketplace tailored to their dietary needs and budget. Recently, Foodsmart raised $10 million to expand its food prescription program, Foodscripts. This initiative partners with health systems like Advocate Health, Memorial Hermann Health System, and Intermountain Health to refer patients to dietitians and provide subsidized meals tailored to specific conditions. Foodsmart aims to make Foodscripts ubiquitous by 2030, transforming how nutrition is integrated into healthcare. Total Funding: $72 million.
Season Health: The company matches individuals with board-certified dietitians based on their health goals and conditions. Members receive personalized nutrition consultations, meal plans, and access to a food marketplace. The company recently secured $34 million in funding from investors such as Andreessen Horowitz and CityBlock, underscoring its growing influence in the market.
Fay Nutrition: The startup connects individuals with licensed nutritionists covered by their insurance plans. Nutritionists design customized meal plans and provide one-on-one guidance. Fay recently emerged from stealth with $25 million in funding from General Catalyst and Forerunner Ventures. Fay offers a franchise model that empowers registered dietitians to run their practices independently while being covered by insurance. This model has proven especially beneficial for patients on GLP-1 medications like Ozempic, who are required to see dietitians to develop healthy habits.
Nourish: The company offers a virtual platform for personalized nutrition coaching from registered dietitians. Members receive meal plans, grocery lists, and ongoing support. Nourish recently raised $35 million in a Series A round led by Index Ventures to expand access to their services and develop AI tools for better personalization and efficiency. This funding will help Nourish grow its network of dietitians to over 1,000 by the end of 2024 and integrate "food as medicine" into their programs.
Business Models and Revenue Streams
These companies make money through subscription-based models, where members pay a monthly or annual fee for dietitian services, meal plans, and food marketplaces. Some also partner with insurance providers, allowing members to access services at a reduced cost or even for free.
Let's take a closer look at Nourish's numbers:
Key Financial Metrics
Consultation Fee: $165 per session
Typical Number of Sessions per Customer: 4 to 5 sessions
Revenue per Customer: $660 to $825
Registered Dietitian (RD) Compensation & Benefits
Base Compensation
Per-Session Rate: $45-$55
Annual Earnings for Full-Time RDs (25 sessions per week): $70K-$90K
This is the Nourish Dietitian Pay Calculator
At first glance, it seems like a solid business model, doesn’t it?
Market Size and Number of Dietitians
In Europe, the nutritional care market is worth €10.2 billion and has over 30,000 registered dietitians. In the U.S., the market is valued at $16.5 billion, with around 93,000 dietitians and nutritionists.
Potential M&A Buzz in Nutritional Care
The nutritional care scene is gearing up for some major shake-ups, driven by the soaring demand for personalized nutrition and the need for scale and tech smarts. Several factors could fuel M&A activity in this space:
Big Tech Eyeing Deals: Amazon, Google, and Apple are eyeing nutritional startups to weave personalized nutrition into their massive ecosystems. They’ve got the data and reach to revolutionize how nutrition fits into healthcare.
Telehealth and Digital Health: Companies like Teladoc and Livongo are hungry for nutritional care platforms to beef up their virtual health offerings. Think one-stop virtual care shops that include personalized nutrition.
Pharma’s New Frontier: Pfizer, Merck, and Novartis are diversifying beyond pills. Buying into nutritional care means offering preventive health solutions alongside meds.
Retail Giants in the Mix: Walmart, Kroger, and Amazon (via Whole Foods) want to add nutritional services to their online stores and loyalty programs. Imagine personalized nutrition plans right next to your weekly grocery list.
In a nutshell, expect the nutritional care industry to see some serious merging and acquiring. It’s all about blending health, tech, and customer needs in new and exciting ways.
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P.S. Photo by engin akyurt on Unsplash
