Omada Health, a virtual care company based in San Francisco, has filed for an initial public offering (IPO), joining a small group of digital health firms entering the public market during tough economic times.

Founded in 2012, Omada offers virtual care programs for chronic conditions like prediabetes, diabetes, and hypertension.

In Q1 2025, revenue rose 57% to US$55 million, up from US$35.1 million the year before. For full-year 2024, revenue reached US$169.8 million, a 38% increase from US$122.8 million in 2023.

Omada serves over 2,000 customers and supports 679,000 members as of March 31, 2025. It sees a major market opportunity, with over 156 million Americans having at least one chronic condition.

Omada raised $192 million in 2022, reaching a valuation of over $1 billion. Major shareholders include US Venture Partners, Andreessen Horowitz, and Fidelity’s FMR LLC, each holding between 9% and 10% of the company’s stock.

🔗 Source: CNBC

🧠 Food for thought

1️⃣ Digital health stocks face high-risk market after pandemic boom-bust cycle

Digital health companies that went public in recent years have experienced a challenging trajectory in the public markets, creating a difficult backdrop for Omada’s IPO.

Nearly two-thirds of 39 public digital health companies reported significant losses in 2024, underperforming while the broader Nasdaq index rose 32% during the same period1.

The sector experienced an extreme boom-bust cycle, with SPACs becoming particularly problematic. A study of 23 digital health SPACs found 30% declared bankruptcy (four times higher than traditional IPOs) and another 25% were acquired at significant losses2.

Only rare exceptions like Hims & Hers (up over 200% in 2024) have thrived, while former high-flyers like Teladoc lost 58% in 2024 alone and are down 96% from their 2021 peaks1.

This market reality suggests Omada will face intense scrutiny of its fundamentals, especially as it reported narrowing but still significant losses of $9.4 million in Q1 2025 and $47.1 million for full-year 20243.

2️⃣ Macro uncertainties complicate IPO timing decisions

Omada’s decision to proceed with its IPO comes during a period of significant market volatility that has already delayed other anticipated public offerings.

Recent tariff policy announcements plunged U.S. markets into turmoil and prompted companies like Klarna and StubHub to postpone their long-anticipated IPOs4.