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Austrian Diabetes App Start-Up Wins Global Recognition

Founders sought and found solution for their own health problem – and turned it into an international success story

SDG 3: Good health and well-being,
 Sep 2018

Vienna, September 4, 2018 - In 2012, a group of four young men - German Frank Westermann, Fredrik Debong from Sweden (both type-1 diabetics) and Austrians Gerald Stangl and Michael Forisch – founded the Vienna-based start-up mySugr, a digital diabetes management tool that enables its users to monitor their blood sugar levels via smartphone app. This device facilitates the management of the disease and the adjustment of the necessary insulin therapy, thereby greatly enhancing the quality of life of the patients.

In the meantime, the mySugr app has developed into a complete diabetes management package and the start-up has become the market leader in the field. In 2017, it was bought by Swiss pharmaceutical corporation Roche for a sum that, while never officially specified, is estimated to amount to a three-digit million figure, turning the acquisition into one of the biggest start-up deals of the past few years.

It was a win-win situation for both: The no-longer-so-small start-up (it has meanwhile way more than one million users worldwide) got rid of its financial worries - after all, it had reported an accumulated loss of 4.5 million in 2015 and was therefore in need of strong partners. For Roche, mySugr was a good buy: the start-up had what it took – an business idea that works and a lot of potential for growth. Besides, through the acquisition of mySugr, Roche was able to further strengthen its position as key player in the field of diabetes management. Consequently, Head of Roche’s Management Center Vienna, Boris Weber was full of praise for the deal. “We in Austria are particularly pleased with the takeover because mySugr is a Vienna start-up. We are eager to raise our already-existing, successful cooperation to the next level and create an open platform for offering a simple solution to people with diabetes,” he said in a 2017 Roche press release. MySugr will become a key element of Roche’s patient-oriented digital diabetes solutions program. The pharmaceutical company is obviously also interested in the valuable patient data generated by the app and its many users. However, mySugr insists its strict data regulations will remain in force and all data will remain on the company’s own servers.

Innovative Health Management

The idea was from the start that mySugr should remain an independent company within the Roche corporate structure with considerable freedom in the development of their product, reported Austrian radio Oe1 from interviews with select mySugr team members, many of whom are suffering from type-1 diabetes themselves and are therefore using their own product on a daily basis. Head of Marketing Anton Kittelberger explains the business model behind mySugr as follows: “Our app is available in a cost-free version. And this free-of-charge version is an improvement on the kind of written diary that people use. If you want to use all digital advantages that mySugr has to offer, you pay 2.99 Euro per month or 27.99 per year. The upgraded version has many useful features, such as integrated measuring tools and automatic data transfer. People can add photos and can share the data with their physicians,” Kittelberger explained to Oe1.

More Money for More Growth

Why sell then, if the business is so successful? “Austria is a great location for founding a business. You get a lot of support; also from the state and the eco-system for founders is particularly advanced in Vienna, with everything that happened in the last few years. However, after a while, getting larger financing sums is no longer so easy,” Kittelberger stated and emphasized the company needed big money to ensure steady growth. A new office location for the rapidly growing team of mySugr has already been found – it is centrally located in Vienna’s 1st district and offers space on 1,700 square meters. In the future, the expectation is that the start-up will operate internationally, like its mother company Roche, stressed mySugr founder Michael Foresch. “What this means is a much higher level of complexity, if you think about markets such as China, Russia, South America. Also Japan, Korea, these are all very complicated markets.”

MySugr Package for Health Insurance Companies

In the meanwhile, mySugr has developed a unique diabetes care package to offer to health insurance companies, including test strips, data analysis and the offer of personal consultations via app with special coaches who advise the patients regarding customized therapy programs. The ultimate goal is to establish a treatment program where everything runs automatically and the patients no longer need to be in constant alert mode. The service is designed to give warning ahead of time before the user runs the risk of incurring an immediate health problem. The cost of the package is 100% refundable.

Curiously, the Vienna-based app’s growth market is not Austria, but predominantly Germany, where insurance companies such as Bavaria, Union Krankenversicherung, Barmenia Krankenversicherung, Gothaer Versicherung and, most recently, the AOK Bavaria, a state-operated health insurance company in Germany with 23 million members, have already come on board. In Austria, the insurance system makes it more difficult for mySugr to take hold. There is far less competitive pressure in Austria’s public insurance system in comparison with the situation in Germany, where 113 insurances, state-operated and private, are competing for market shares – a situation which generates a much higher interest in a comprehensive service for diabetes patients.

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Petra Allekotte