Healing Healthcare: Our Investment in Parsley Health

By Eric Martineau-Fortin, Christophe Bourque, and Karolina Mrozkova

Despite the technological and scientific progress in healthcare over the last few decades, people in the US (and worldwide) on average are getting more sick over time. Chronic Diseases (CD) — diabetes, cancer, high blood pressure, as well as various respiratory and heart conditions — have been on the rise since the 90s and are the leading cause of death in the US. More than half of all Americans (6 out of 10 to be exact) suffer from at least one chronic ailment, and 4 out of 10 are diagnosed with two or more chronic diseases.

The increase in CDs over the last decade is consistent across adult age groups (see first chart below). Furthermore, recent studies show that most chronic conditions are, in fact, induced or worsened by poor lifestyle choices, including but not limited to poor diet, lack of physical activity, stress, and smoking. Therefore, many people are taking a more holistic approach to managing their health and ultimately reducing the risk of CDs, related expenses and even death.

CDs drive 75% ($3.3T annually) of total healthcare costs in the US, and yet only 1% of health dollars are spent on public efforts to prevent early onset of chronic conditions and improve overall health. This fact is even more shocking given the reality that the US has the highest healthcare costs per capita, over 30% greater than second place, Switzerland, and roughly 60% greater than the worldwide average of developed countries.

Given the above-mentioned imbalance in spending vs. overall health improvement, it is no surprise that the US healthcare system (despite performing very well in providing acute care for people admitted to hospital) significantly underperforms in preventing hospital admissions for people with chronic conditions, compared to other OECD countries such as Switzerland.

Preventing and managing CDs can be achieved through a two-pronged approach of frequent primary care visits for treatment and monitoring as well as investing in self-care which can include improving dietary habits and increasing physical exercise. This is an approach that is relatively new and in growing demand from Generations X+. However, Generations Y and Z are demanding more than the traditional diet and exercise. 76% of US millennials exercise on a regular basis, 42% have meditated at least once in the last year and many seek healthy alternative food options (something we track closely via our investment in Freshly). Clearly trends are changing beyond the traditional symptom-monitoring medical approach towards a holistic and innovative healthcare offering.

One such holistic practice is known as Functional Medicine (FM): a discipline that seeks to identify and address the root causes of disease rather than just treating the symptoms. FM views the body as one integrated system, not a collection of independent organs divided up by medical specialties. FM practitioners spend more time with their patients, listening to their histories and looking at the interactions between genetic, environmental, and lifestyle factors that can cause complex and difficult-to-treat chronic disease.

At White Star Capital, we have a thesis on the evolution of healthcare and wellness as seen by our investments in Dialogue and Echo. We also believe that the lines between fitness, nutrition, emotional wellbeing, and primary healthcare will blend. As Equinox’ CMO, Vimla Black Gupta, noted during his interview with the LA Times, “Customers are hopping fluidly from fitness into beauty, beauty into wellness in general and there’s a convergence happening all day long. I don’t know that the consumer is separating them. They just want to be their best self.”

We believe the rising trend of FM reflects the consumer’s quest for the ‘best self’, by living well, understanding their body and maximizing their health in the long term. This is why we decided to back Dr. Robin Berzin and her incredible team, leading Parsley Health’s $26m Series B round. Parsley is a fast-growing national provider of holistic personalized care designed to reverse chronic illness and optimize health.

Founded by Dr. Robin Berzin, the Company launched in 2016 with one clinic in NYC and quickly grew to 3 Functional Medicine clinics both on the West and East Coast. Parsley offers care memberships featuring testing and diagnostics, personalized plans and coaching, and frequent contact with dedicated doctors and health coaches, both in-person and virtually via Parsley’s unique platform. Parsley also offers a selection of premium-quality supplements. The Company’s flagship clinic in NYC’s Flatiron district opened at the beginning of 2019 and became a huge success with several hundred people on waitlist. The company works hard to satisfy this high demand while providing the highest quality service to its current members. And the effort has borne fruit. Parsley Health has impressed us with its outstanding customer reviews and customer love translating directly into industry-beating renewal and retention rates. The Company has also recently launched a telemedicine membership, allowing people across the country to take advantage of the same offerings found at Parsley’s brick-and-mortar locations.

Behind every incredible company stands and an incredible team. Parsley Health’s founder, Dr. Robin Berzin received a medical degree from Columbia University and later became an avid spokesperson for Functional Medicine. She lives and breathes the company’s core values while surrounding herself with a diverse and passionate team. All of Parsley’s providers go through an in-house fellowship training to layer on Functional Medicine best practices in interpreting advanced diagnostic testing and lifestyle interventions. For Dr. Berzin, aligning everyone on the same mission is a top priority in order to deliver the best experience to members.

While the above has helped us build a strong conviction to invest, other factors contribute to our investment decision such as:

• Millennials want to receive radically different healthcare than previous generations. They view healthcare holistically, incorporating fitness and nutrition into their health plans. Additionally, millennials are used to dedicating significantly more of their disposable income to healthcare spending than prior generations but demand price transparency. Parsley Health caters to all the above.
• Parsley Health’s business model enables the company to generate revenue through multiple channels, ranging from care memberships (including telemedicine) and diagnostics to e-commerce including a line of supplements and other products.
• Parsley Health has established a leading consumer brand in the growing space of Functional Medicine, with thought leadership that far surpasses any other company in the space.
• Our team brings significant value to the company based on our experience in investing in the healthcare sector through our investments in Echo and Dialogue as well as the wellness sector through our investment in New York-based Freshly.

We are very excited about working with the entire Parsley Health team and are extremely pleased to join its board alongside partners that bring immense value to the table such as FirstMark Capital, Alpha Edison, Amplo, Arkitekt Ventures,Trail Mix Ventures, as well as Nat Turner, founder and CEO of Flatiron Health, and Tom Lee, Founder of One Medical.

About White Star Capital
White Star Capital is a global multi-stage technology investment platform that invests in exceptional entrepreneurs building ambitious, international businesses. Operating out of New York, London, Paris, Montreal, Tokyo, and Hong Kong, our presence, perspective, and people enable us to partner closely with our Founders to help them scale internationally from Series A onwards.