Deal to Watch: Making Diet a Vital Sign

Summary

Diet ID has been selected as a “Deal To Watch” by KingsCrowd. This distinction is reserved for deals selected into the top 10%-20% of our due diligence funnel. If you have questions regarding our deal diligence and selection methodology please reach out to hello@kingscrowd.com.

Problem

Poor nutrition is a uniquely American crisis, and the statistics on the scale of our nation’s diet issue are staggering. Put simply, food is the number one cause of poor health in America. Dietary habits cause an estimated 700,000 deaths each year, and are the underlying cause of nearly half of U.S. deaths from heart disease, stroke, or diabetes. Think of it this way: hot dogs and other processed meats cause nearly double the amount of deaths each year as car accidents (approx. 58,000 deaths versus approx. 25,000). 

Americans eat highly processed foods rich in sugar and saturated fat, and these habits are straining the healthcare system. Almost one fifth of all spending in the U.S. is devoted to healthcare, more than $3.2 trillion per year; a large proportion of those costs are directly impacted by poor diet, somewhere around $480 billion in direct costs and an additional $1.24 trillion in indirect costs. 

Despite the scale of the poor nutrition/obesity epidemic, many doctors say that they don’t have the training or the confidence to deliver quality nutritional care. David Eisenberg, adjunct associate professor of nutrition at the Harvard T.H. Chan School of Public Health, calls the lack of nutrition education for physicians reprehensible. “Today, most medical schools in the United States teach less than 25 hours of nutrition over four years. The fact that less than 20 percent of medical schools have a single required course in nutrition, it’s a scandal. It’s outrageous. It’s obscene,” Eisenberg told PBS NewsHour.

In short, poor nutrition is a deeply concerning issue causing fatal health outcomes for hundreds of thousands of Americans each year, directly impacting human lives and driving disproportionate spending in a healthcare system already struggling to manage costs. Moreover, today’s physicians lack the tools and skills that they need to adequately address diet with their patients. 

Solution

Diet ID is a digital platform enabling physicians to diagnose the state of a patient’s diet and recommend tangible nutritional improvements to improve health. While physicians currently rely on cumbersome and inaccurate tools for diet diagnosis and treatment planning, like paper-and-pen food frequency surveys and time-consuming calorie tracking applications, Diet ID offers a simple, action-oriented solution to a decades-old problem. 

Diet ID was developed by accomplished physician Dr. David Katz in 2016, and has impacted over 170,000 lives in partnerships with healthcare providers. Diet ID has worked with clients in lifestyle medicine, research, and workplace wellness to implement the tool with their stakeholders, with impressive engagement: over 80% of potential users are interested in the product, and 70% complete the program for at least 30 days. 

The Diet ID program consists of an initial diet assessment based on simple A/B image selection to depict a variety of diets. The users chooses which diet of the options most resembles theirs, allowing the software to develop a precise understanding of their typical consumption patterns. From there, Diet ID recommends a series of tangible “challenges” (ex. “Eat only four meaty meals this week” or “Eat three servings of vegetables today”) to spur behavior change at a reasonable pace. Diet ID reports that 55% of users looking to lose weight have lost over 10 pounds on the Diet ID program, and users have increased fruit and vegetable intake by 91%. 

Since launching publicly in Q1 of 2019, Diet ID has booked over $400,000 in sales with 22+ clients. Sales were doubled between Q1 and Q2, and over 2.5 million lives sit in the Diet ID sales pipeline. With the combination of license fees per client and usage fees per each user, Diet ID projects achieving $3 million in revenue in 2020, and $28 million in revenue by 2023. 

Team

Diet ID was founded by Dr. David Katz, a lauded physician and public health advocate with degrees from Dartmouth, the Albert Einstein College of Medicine, and Yale. He has received three honorary doctorates for his contributions to public health, which include 200+ peer-reviewed publications, hundreds of health columns online and in print and 16 books on nutrition, dieting, and preventative medicine. Dr. Katz has served as the Chair for the Art & Science of Health Promotion conference, and was a finalist for the 2019 James Beard Foundation Award in the category of Health Journalism. 

Rachna Govani is the COO of Diet ID, and previously led FOODSTAND, which was acquired by Diet ID in 2019. Govani spent her early career at American Express and at a green-tech startup, and founded FOODSTAND to lead tens of thousands of participants across 85 countries in Healthy Eating Challenges to curb the onset of diet-related diseases. 

Beyond the core operating team, Diet ID is advised by leading nutritionists and physicians from institutions such as Harvard, Stanford, and Tufts.

Growth Plan

Moving forward, Diet ID is focused on expanding its set of clients to include mainstream healthcare actors like hospital systems, fitness chains, and insurance payers. It estimates that these stakeholders make up a $39 billion market for nutritional diagnosis and improvement tools. After staking out foothold with those clients, Diet ID intends to move even more mainstream, integrating directly with health tech tools like Apple Watches and becoming a more recognizable consumer brand in nutrition and dietary planning. 

Why We Like it

• Urgency of the obesity epidemic: The statistics on the severity of the nutrition and obesity epidemic in the United States speak for themselves. Poor diet is causing a crisis, one that is fully recognized by both the medical community and American society at large. In a case of this much desperation for a solution, a proven, validated clinical tool like Diet ID is a welcome innovation for healthcare providers doing the best they can to stem the catastrophic effects of the American diet.
• Expert team: Diet ID’s objective to gain market share among healthcare providers requires a significant degree of medical experience on the founding team, which is fulfilled by its CEO, Dr. David Katz. Katz leverages years of renown in public health and nutrition to create comprehensive trust in his product, which is also endorsed by an expert medical team from Harvard, Stanford, Tufts, etc. for good measure. In addition, Diet ID’s COO, Rachna Govani, is an experienced nutrition entrepreneur and a thought leader in the popular health and wellness press, rounding out Diet ID’s entrepreneurial and consumer expertise.
• Differentiation from competitors: The calorie tracking/dieting app space is somewhat crowded, with entrenched players like Lose It and MyFitnessPal challenged by new entrants like Noom. However, Diet ID’s chief objective is not to compete with these consumer apps in the App Store; the company instead partners with healthcare professionals and health systems to implement the app in a clinical setting, where it is a logical alternative to time-consuming and expensive alternative clinical techniques for diet assessment and planning. While Diet ID eventually aims to gain consumer awareness through health tech integrations, it’s current focus is not to challenge popular existing apps. 
  

The Rating: Deal To Watch

Diet ID enters the market as healthcare professionals and Americans writ large seek an answer to the compounding issue of poor nutrition. Diet ID’s innovative digital health platform for diagnosing diet and presenting concrete action plans for health improvement is not only novel and needed in this space, but is also bolstered by an expert team and a unique business model that avoids direct competition with existing diet app giants. 

Acquisition opportunities for digital health tools are strong of late; calorie counting app MyFitnessPal was acquired by UnderArmour for $425 million in 2015, and population health and advisory company Valence Health was bought by Evolent Health for $219 million in 2016. Diet ID’s focus on integrations with existing digital health services and wearable tech increases acquisition potential from a strategic buyer investing in further advancements in accurate nutritional diagnosis and actionable diet planning.

Diet ID has the potential to cement itself as the healthcare industry’s standard diet analysis and treatment solution, and ultimately impact millions of lives as Americans struggle to eat healthier and improve health. Given the company’s strong assets in team and business model, plus acquisition potential from any number of healthcare players, Diet ID is a Deal to Watch.