Digital therapeutics (DTx) company Omada is reportedly facing pressure to go public as calls roll in from SPACs and bankers wanting to arrange a deal or an IPO, according to Insider.

• This news arrives months after rumors began swirling that telehealth vendor Amwell had proposed an acquisition of Omada.
• However, Sean Duffy, CEO and founder of Omada, told Insider that he views an IPO as “more than a financing event” and is instead focusing on widening the startup’s reach to target more consumers.

Other companies' interest in acquiring Omada underscores how rapidly the DTx space has matured within the past few years, particularly within diabetes management:

• The leading DTx players’ focus on diabetes management has helped them attract long-lasting tie-ups. Companies like Livongo, Omada, and Virta Health primarily focus on diabetes, and they’ve all racked up impressive payer partnerships: Omada has been offering its range of programs to insurer Cigna’s 180 million customers since 2018, for instance.
• Diabetes-focused DTx companies have attracted more investor funding than any other DTx company. Virta has bagged over $373 million in VC funding so far, while Omada trails close behind at a whopping $256.5 million.
• After telehealth company Teladoc bought DTx firm Livongo in a multibillion dollar deal last August, DTx vendors were catapulted into the limelight. Duffy told Insider that the Teladoc-Livongo deal “raised the bar” for Omada, attracting more attention from telehealth vendors—something Insider Intelligence predicted would occur in the industry after the Teladoc-Livongo deal came to fruition.

Omada hasn’t announced explicit plans to go public any time soon, but here’s why a public debut in the near future would make sense for global expansion purposes:

• Omada’s digital therapies are currently only offered to US residents—but an IPO could increase its visibility and credibility in international markets. Worldwide press coverage of an Omada IPO would boost the company’s mindshare and set earnings expectations to reel in investors and consumers. This would help Omada better compete with Livongo, which has already stated that international expansion is part of its long-term business strategy.
• Expanding internationally would enable Omada to get its diabetes management tools in the hands of a wider range of consumers. More than 422 million individuals suffer from diabetes around the globe, according to WHO.
• If Omada extended its footprint abroad, it would be joining a rising tide of DTx companies seeking more digital health-friendly international consumer bases. For example, DTx vendors Kaia Health and Happify Health have both announced plans to bring their products to Europe. This is likely because some European countries embrace digital health than the US does: For instance, Germany requires insurance companies to cover digital therapies—which means consumers are more likely to access them.