Omada & Hinge S-1: We Just Paid a $1.5B Tuition in Healthcare GTM.
There’s been plenty of coverage on the warm and fuzzy stuff, rightfully so. Building and scaling in this space is hard. A decade of execution, lives improved, real traction. Respect.
But once the applause fades, the operators and investors are left asking a harder question: What did we learn, and what actually scales?
Three questions I keep coming back to:
The companies raised a combined ~$1.5B to reach their current scale. Still burning real cash. Growing 40–50% YoY. Rewarded by a shrug 4x multiple. Is the employer channel broken?
What does this say about the healthcare investing landscape?
How should we be designing the next generation (“Gen3”) differently?
Let’s break it down.
1. Employer sales is getting saturated
In the early innings, selling to employers was a cheat code. Livongo, Omada, Hinge… these companies launched when their categories were new. They could educate the buyer, ride a wave of novelty, and scale fast.
That dynamic has changed. Employers are now overwhelmed with vendor pitches. Benefits teams focus on one trending category at a time - smoking cessation, heart health, diabetes, mental health, fertility, GLP-1s, etc. And even within those categories, there’s room for maybe one breakout per cycle. This isn’t SaaS, where you can spin up dozens of large companies serving overlapping use cases. In employer healthcare, the category tends to crown one leader per cycle.
What used to be differentiators (e.g. risk-sharing, cost guarantees, integrations) are now just table stakes. And with consultants and brokers influencing procurement, even the strongest products can get buried under politics and channel inertia.
The bar is higher. The cycle is longer. And the juice is harder to squeeze.
2. On market structure and the elusive platform thesis
Many companies raised capital on the vision of becoming multi-condition platforms. In theory, it made sense: one vendor, many needs, consolidated spend. But the buyer behavior hasn’t caught up
If multi-condition breadth were a true wedge, we’d see nonlinear growth from those who went all-in on it. But companies like Dario have hovered around $30M for years. Even Omada, despite expanding across multiple conditions, reports that only 30% of clients use more than one.
Why? I suspect buyers still behave like they’re shopping for conditions, not platforms. Procurement stays siloed. And benefit consultants have little incentive to push unification. Add in payer segmentation (Medicare, Medicaid, ACA, fully insured, etc) and suddenly your “platform” has to support 16 permutations of care models, workflows, GTM, and ops overhead.
What should’ve been leverage becomes drag. Instead of compounding, complexity dilutes velocity.
3. What does Gen3 look like?
Gen3 healthcare companies won’t all look the same, but there’s a pattern emerging.
There will be two dominant types:
Verticals that go deep on one population or problem space
Horizontals that power the ecosystem: infra, rails, orchestration layers
The holy grail is building systems and GTMs that flex across variation without bloating the org chart or the codebase.
More capital efficient
The market already paid the tuition. Gen3 needs to get to outcomes faster, with tighter GTM loops and smarter distribution. Augmenting human labor with AI in the care model will be a major lever. And while that once seemed like a stretch, patient acceptance is shifting, especially in behavioral health and lower-acuity use cases.
Development is also getting cheaper and faster (if you saw Anthropic Dev Day yesterday, you no longer think that this is pie in the sky). That doesn't just make care delivery more efficient, it makes the cost to build and iterate on care models themselves meaningfully lower.
Population-centric > condition-centric
Gen2 companies typically started with a single condition and expanded outward. That often led to complexity without coherence.
Gen3 should flip the model: start with a defined population and design end-to-end for their needs. That also means targeting buyers who are buying differently. Often through different channels, contracting paths, and trust networks. This requires not just a new care model, but a new GTM stack and often a cleaner, purpose-built tech foundation.
You can see glimpses of this in Gen2 plays like Iora and Oak Street (Medicare), Cityblock (Medicaid), and One Medical (Commercial), though most remain capital-intensive. The constraint isn’t ambition, it’s channel fit.
Redefining the scale curve
Many care delivery companies will remain important, but top out below venture-scale. I think of them as profitable niche leaders: PE-backable, resilient, and strategically valuable, but not blitzscaling.
And the journey to scale is jagged. I’ve seen structural cliffs around ~$20M, ~$50M, and ~$100M revenue bands. Between those bands, teams hit margin compression, channel friction, or operating complexity. You have to know what curve you’re on… and how much risk you’re willing to take to get to the next one.
The next venture-scale plays
Most of them won’t look like digital clinics. They’ll be the pipes and logic layers:
AI-native documentation
Programmatic billing and RCM
Infrastructure for payments, eligibility, and risk
Underwriting, routing, compliance
AI is already accelerating this category; not just scribes, but infra-level primitives. As these grow, interoperability becomes the new scalability. If these platforms don’t integrate cleanly, we’ll recreate the same back-office fragmentation we just spent a decade fixing in care delivery.
And we haven’t even touched biotech or drug discovery, those may see even more traction.
One last thing often missed in these breakdowns:
What did $1.5B in venture dollars actually deliver for patients?
Slightly faster onboarding? Better UX? Maybe. But friction, confusion, and fatigue still define the average experience. Gen2 companies did normalize virtual care and prove that outcomes can happen outside of visit-based models. That matters.
But Gen3 has to finish the job: designing systems that don’t just scale, but feel human again.
Would love to hear where others are seeing leverage, and how you're designing for Gen3.
(Thanks to Stephanie Tilenius and Sarah Cohan for reading the drafts)