Advocate Aurora Health launched a subsidiary that invests in businesses that enable people to improve their health and well-being beyond traditional clinical settings — and the first investment is in Foodsmart, a firm that specializes in “eating well made simple.”
Advocate Aurora Enterprises was the largest investor in a $25 million Series C round of capital raising by Foodsmart, which is owned by Zipongo Inc. of San Francisco. Advocate Aurora didn’t disclose the amount it invested.
Foodsmart will apply the new capital to continued expansion of its services including 300 registered dietitians who connect with consumers via telemedicine-style technology, CEO and co-founder Dr. Jason Langheier told the Milwaukee Business Journal. He declined to disclose his company’s annual revenue but said it posted positive cash flow the second half of 2020.
The new subsidiary for Advocate Aurora, which has its co-headquarters in Milwaukee and suburban Chicago, fits CEO Jim Skogsbergh’s strategy announced in January 2020 to double revenue by 2025 via mergers and acquisitions of health care systems, health insurers and consumer-facing health products.
“You’re going to see us continue to invest in health-related businesses designed to make us a destination health company, not just providing hospital, doctor and home care services but where people can look to us for all their health care needs,” Skogsbergh said in a Thursday press release.
Advocate Aurora’s investment in Foodsmart “reflects this whole-person health approach by enabling people to take greater control of their wellness on their own terms,” Skogsbergh said.
Advocate Aurora Enterprises is focusing its investments in three key categories: aging independently, parenthood and personal performance.
Advocate Aurora appointed Scott Powder as president of the enterprises subsidiary. He most recently was senior vice president and chief strategy officer.
Foodsmart is a purveyor of what it calls personalized telenutrition and “foodcare.”
The company says it combines a national network of dietitians, personalized meal planning and a broad food marketplace to make eating well simple and affordable.
Foodsmart derives much of its revenue from subscriptions with over 650 employers with over 1.25 million members. Langheier said the company enrolled about 278,000 new members in 2020.
Besides employers, the company supports regional and national health plans including those that manage Medicaid plans.
The goal is to improve consumers’ health by improving their access to nutritional foods and even providing delivery.
“We recognize a huge contributor to personal health is right kinds of food,” Powder said in an interview.
Advocate Aurora executives have started discussing how to bring Foodsmart’s technology to the health care system’s constituencies, Powder said. That could involve Advocate Aurora employees, members of its health plans and ultimately all patients, but there is no timetable for such a rollout, he said.
Foodsmart’s Series C round also included participation from Mayfield Fund, Seventure Partners (Health for Life Capital), New Ground Ventures, Benefitfocus founder Shawn Jenkins, Classpass CEO Fritz Lanman and former Darden Restaurants CEO Clarence Otis. Social-impact investors The Social Entrepreneurs Fund (TSEF) and Larry Berger, CEO of Amplify, also participated.
