How Levels Health will change the world (Investment Profile)

Executive Summary

Vision: Levels Health is an early stage bio-wearable system that uses a continuous glucose monitor (CGM) to give users real time feedback on how diet affects their health. The team’s grand vision is to create data-driven behavioral changes that address pressing health issues around diabetes/prediabetes, insulin resistance, and obesity through the lens of metabolic fitness.

Personal

In my previous article Metabolic Flexibility & Fasting I discussed my own personal journey with nutrition. From a multiple sport athlete, fitness model, to management consultant I’ve had to adapt my eating habits to a variety of lifestyles. While I wont fully rewrite the previous article, I’m willing to say one thing with absolute certainty:

The Solution

If you think about the utility of bio-wearables the growing hype around this industry makes complete sense. The explosion of data and a “smart” world is unlike anything we’ve seen previously. From analog to digital, Blockbuster to Netflix, bookstores to Amazon, our momentum is pummeling towards a deeply connected world. Alongside many these technological advances we’ve shot our primal selves in the foot a bit. Food scarcity is no longer an issue as it used to be; you can get a few thousand calories for <$5 at most grocery stores. In addition to such irrational supply levels, the foods themselves have changed. Hydrogenated, processed, and unnatural foods are the new normal. Some of these things are so addicting that children raised on such foods don’t stand much of a chance.

Daily score on the left, and individual meal score on the right.
  • We’re seeing self-quantification methods like Whoop, Fitbit, and Apple Watch gain tremendous traction. Tracking sleep and movement are prevalent now, but gathering data on dietary choices has been omitted thus far. Nutrition advice is already so misguided, and often with a demonizing or one-size-fits-all approach, which makes Levels even more necessary.
  • Telehealth (accelerated by COVID) is a promising convergent trend for the Levels’ applications. As we shift away from in-person doctor visits, your PCP having constant access to health data via a CGM will prove to be invaluable in their ability to treat patients. Even before the shift to digital, having one data point per year (traditional check up) was a primitive method compared to the ability to collect data every couple minutes and then aggregate these trends to gain better insights.
  • The company has said they’re in the “Tesla Roadster phase” of the business now — meaning that the first iteration of Levels is a luxury model which they’ll use to learn from and fund further research, eventually getting a lower unit cost. Very promising, and telling that Josh learned a lot from his time with Elon!
  • The TAM mentioned for CGM devices could very well be way off a few years from now. A previous example from Uber came into my mind when researching Levels as the behavioral change could be so great that it’s application far transcends the current CGM market. Read Bill Gurley’s How to Miss by a Mile to read more about Uber’s TAM.
  • The team has laid out their Secret master plan on the Levels Blog. If you read it you may feel, like me, that this is much bigger than a CGM company. The future implications of such a tracking software being combined with different hardware is interesting.
  • “Band-aid” products or services, that address a pressing issue in the world, typically gain traction easier than “supplements.” Give that Levels is in-line with large macro trends towards a connected world and health, the positioning is exciting.
  • Initial challenges observed include the ability of patients to get other CGMs at a discounted price via insurance providers, strong relationships that incumbents have developed with medical providers over 50+ years in business, price competition of new players & incumbents that may shrink gross margins, and potential alternative such as smart insulin pens/automatic dosing mechanisms that would take a significant piece of the diabetes related market.
  • I see outside of the US (OUS) as a promising market for new players, given the incumbents like Dexcom or Abbott are either not established at all or in the very early stages of market penetration. We’re seeing similar demand based on common health issues in Latin America, EMEA, and APAC (which expects the highest CAGR of 26.9 % during 2019–2026)
  • Levels Blog posts you need to read: Behavior Change , Understanding Weight Loss , Ultimate Guide to Metabolic Fitness , Josh’s story.
  • An important quote “Too many smart people focus on small problems. Levels has picked something big and important to solve — and I love it.” Marc Randolph (Netflix) on investing in Levels.

Conclusion

After reaching out to Josh I was able to get myself in on the beta testing of Levels. My kit just arrived and it’s hard for me to contain my excitement! I had previously tried to get a CGM prescription from my physician when these things started popping up in the fitness community a few years ago. I was very quickly told not to worry about that, as a healthy college athlete in his 20s. Did this crush my ability to find an ideal diet? No, but it did make the process far more difficult and time consuming.

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Lukas Linemayr

Lukas Linemayr

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Austria / USA. Venture Capital investor. Fitness junkie, cold-water surfer, stoic, James Bond superfan.