Wearable device maker Fitbit is extending its reach into hospitals and doctors’ offices with the planned acquisition of Twine Health, an MIT spinout that sells healthcare coaching and collaboration software.
The purchase price wasn’t disclosed in a press release announcing the deal Tuesday. The transaction is expected to close during the first quarter of this year.
San Francisco-based Fitbit (NYSE: FIT) sells a line of Internet-connected wristbands, watches, and other wearables that track exercise, sleep, and other health metrics for more than 25 million users, according to the company. Fitbit operates a social network for fitness enthusiasts, and it said it has accumulated a large database of health and fitness data, which helps it deliver personalized health recommendations to individuals.
Fitbit also develops health and wellness programs for employers, insurers, and hospital systems. The Twine Health acquisition is aimed at boosting that business. Cambridge, MA-based Twine helps patients manage chronic conditions, like diabetes and hypertension, and achieve goals, like losing weight or quitting smoking. Its software is intended to make it easier for patients and their loved ones to collaborate with caregivers and health coaches. The software automates parts of the coaching process and enables a single coach to work with multiple patients, with a goal of “freeing up time for more personalized care,” according to a press release.
The acquisition signals a push by consumer health device companies to diversify their businesses by selling more products and services to other businesses and healthcare organizations. The bigger picture is that healthcare increasingly involves monitoring and supporting patients outside the walls of the hospital or doctor’s office, aided by technologies like wearable health trackers and collaborative software tools. Fitbit’s leaders say the company can play a larger role in those efforts with the Twine acquisition.
“We believe we can help build stronger connections between people and their care teams by removing some of the most difficult barriers to behavior change,” said Fitbit CEO and co-founder James Park in a prepared statement.
Five-year-old Twine’s approach is based on behavioral and clinical research conducted at the MIT Media Lab. The startup’s founders are John Moore, Frank Moss, and Scott Gilroy. The company raised at least $8.3 million from investors, including Khosla Ventures, Qiming Venture Partners, and the late Henri Termeer, a pioneer in rare disease drug development.
Twine’s team will join Fitbit’s Health Solutions group, and Moore will become Fitbit’s medical director, the company said.
Wall Street didn’t have a strong reaction to the Twine acquisition. Fitbit’s stock price closed at $5.11 per share Tuesday, down a little more than 1 percent on the day. The company’s stock has been trading between $5 and $7 per share for the past year, well below its $45-plus heights of 2015, the year it went public.
In its most recent quarterly financial report, Fitbit said it generated about $1 billion in revenue for the nine-month period that ended September 30, down from almost $1.6 billion during the same period in 2016. It reported a $231.7 million net loss in the first nine months of 2017.
[Top photo downloaded from Fitbit website’s press kit.]