Berlin-based digital gut health platform Cara Care has raised $7m after becoming the first prescribable digital therapy for gut health available for free from the German healthcare system.

What does Cara Care do?

Cara Care helps patients suffering from chronic gastrointestinal problems using an app-based treatment. The digital health platform builds a personalised treatment plan, and users can chat with dieticians, track their food and take quizzes to better understand their conditions.

Founded in 2016, it was approved by the German public healthcare system in January this year, becoming the first prescribable digital therapy for gut health available on DiGA. That means doctors can prescribe it to patients for free and the startup gets reimbursed by the state. 

Who’s invested in it?

The latest $7m raise brings the startup’s total funding to $16m and follows its 2019 Series A.

• Family-owned food and nutrition manufacturer Dr Schär AG led the round
• Current investors Sabadell Asabys and Johnson & Johnson Innovation also participated 

The digital health market

• Digital therapeutics surged during the pandemic and startups offering app-based and online treatments have consistently convinced VCs to open their wallets over the past two years.
• Just last month, 20 digital health platforms raised cash, according to Dealroom.
• France’s Alan bagged a hefty $183m and hit a valuation of $2.7bn; Iceland’s Sidekick Health raised $55m in what was the Nordic nation’s biggest round of the year; and Ouihelp, another French startup, snapped up $30m.

What’s next for Cara Care

Cara Care will look to bed down in the German and US markets it’s already active in, alongside branching out into France and a number of other European markets. 

The startup says it will also look to broaden its portfolio of digital therapeutics beyond gut health.

Sifted’s take

In the wake of Covid-driven digitalisation, the market for digital healthcare is only increasing as regulators and consumers become more confident approving and using tech-based therapy.

German regulators led the way with the DiGA legislation in 2019, which was the first such act to allow digital therapies to be prescribed by doctors and paid for by the state. 

Since then, a number of other European countries are following suit with their own programmes to accelerate the takeup of app-based and online healthcare. This all means a clearer route to a mass market for digital health startups. 

And, while we might see fewer megarounds in the sector as tech market uncertainty unfolds, it’s generally thought by industry insiders that we’re unlikely to see the same levels of layoffs and turmoil as in the rest of startup Europe. 

This is because, many say, digital health startups’ fortunes are on surer footing, being so closely linked with healthcare spending — one of the last things to be cut from state and consumer budgets during a downturn.

Kai Nicol-Schwarz is a reporter at Sifted. He covers healthtech and community journalism, and tweets from @NicolSchwarzK.