One Medical Buys Virtual Nutritionist App Rise

(Wall Street Journal) – One Medical Group gives hundreds of thousands of patients quick access to primary care physicians. With its latest deal, it hopes to connect them with a network of virtual nutritionists.

The healthcare company said it is acquiring Rise, a mobile app connecting smartphone users to licensed nutritionists for daily advice on meal planning and dieting. One Medical paid about $20 million to acquire the startup, people familiar with the matter said.

The deal is part of a wave of consolidation in the digital healthcare space, where established device makers, service providers and apparel brands have looked to snap up any fitness and health app gaining traction with users. More than 200 venture-backed healthcare startups were acquired by larger companies since the beginning of 2015, according to data from Dow Jones VentureSource. That includes MyFitnessPal, a developer of mobile fitness apps, which sold to Under Armour Inc.UA +0.04% for $475 million a year ago.

One Medical, the brand of clinics operated by eight-year-old startup 1Life Healthcare Inc., sees an opportunity to offer its patients a wider range of healthcare services via the smartphone that could potentially save them trips to the doctor’s office. Its members, who each pay an annual subscription of $99 to $199, already have access to a service called Treat Me Now, which provides answers to basic health questions such as how to treat seasonal allergies.

For Rise, a two-year-old startup that raised $4 million from investors, the acquisition is an opportunity to get its service in front of more users after trying to stand out in Apple Inc. and Google Inc.’s crowded app stores.

“It’s hard to build distribution for apps at all today,” said John Lilly, a partner at venture-capital firm Greylock Partners, an early backer of Rise. “That’s one of the advantages One Medical has. They have this footprint in the real world.” Rise’s other investors include Google Ventures, Cowboy Ventures, Floodgate and Lightbank.

Rise may evolve into a smarter and more personalized health service with the help of its new owner. For example, a nutrition coach on Rise may make different diet recommendations for their client depending on the personal health history they have on file with their primary-care physician at One Medical, said Kimber Lockhart, chief technology officer at One Medical.

Rise has no immediate plans to change its subscription offering of $40 to $50 a month, said Suneel Gupta, the startup’s co-founder and chief executive. The company will continue with its roll out of a lower-cost version of its service that lets users keep in touch with nutrition coaches, he said.

Mr. Gupta and his team of eight other employees have physically relocated to One Medical’s offices in downtown San Francisco. One Medical, which has raised $181.5 million in venture funding, has a total of over 800 employees, including its physicians and staff in clinics across seven cities in the U.S.