The first time I heard about The Activity Exchange was soon after it launched in 2012. A MobiHealthNews reader asked me to investigate the company. He said they failed to count his exercise time correctly. The Activity Exchange (TAE) paid people for connecting various health apps or fitness devices and then sharing the data with them. Of course, if they thought you were trying to game the system, they wouldn’t count it.

At the time, TAE apparently thought Paul’s cycling data was suspicious because he rode a duplicate route twice-a-day. They only gave him credit for one of the rides. And he was pissed.

Turns out: He biked to work each day, and the duplicate ride was just his ride home.

Well, Paul, it’s only taken me eight years, but I’ve spent the past few weeks digging into The Activity Exchange, now known as Evidation Health. And the company has come a long way since 2012.

Evidation is a unique company that has emerged as a leader in decentralized, tech-enabled life sciences research programs these past few years.

As Paul knows all too well: That’s not where it started though.

In this 3,500-word research report, E&O digs into the past, present, and future of Evidation Health. It offers up estimates for five years of annual revenues, eight years of user growth, details on the company’s business model, strategy shifts, a legal spat, and what comes next.

2012-2014: Pay people for healthy behavior and help payers engage

In its first incarnation, Evidation Health was named The Activity Exchange (TAE), but it was better known by the (original) name of its consumer-facing health rewards platform, AchieveMint. Four people founded The Activity Exchange: Mikki Nasch, Christine Lemke, Alessio Signorini, and Luca Foschini.

New participants found AchieveMint via paid marketing channels or from family and friends who already participated. The company says some AchieveMint users have convinced their whole church congregation to sign up. AchieveMint offered people cash for sharing their health app and device data.

In mid-2013, for example, AchieveMint would give people:

• • 65 points for checking into their gym on Foursquare
  • 30 points for testing their blood glucose
  • 5 points for tweeting about a healthy article
  • 15 points for walking 1,000 steps in a single day according to a Fitbit device

At the time, 25,000 points could be redeemed for a $25 check in the mail from TAE. Who paid for these points? TAE explained in its FAQ:

By mid-2014, which marked about two years from launch, The Activity Exchange had onboarded 185,000 participants in AchieveMint.

The companies that TAE provided insights to were primarily payers — health plans and self-insured employers. Humana was an early customer. TAE combined their AchieveMint data with claims data to help these customers better engage with their members. The full TAE product suite included Flow, Loop, Nudge, and Portal:

2015-2016: The awkward years. Reborn as Evidation. GE invests and helps pick a new CEO.

Arguably, these were the company’s awkward years. In addition to leading its Series A round, GE Ventures helped TAE find a new CEO, Deborah Kilpatrick. The company also changed its name to Evidation Health and came up with a new focus: helping the many new digital health startups prove that their offerings worked.

The day of Evidation Health’s rebranding, its homepage explained a change of course for the company:

During this period, Evidation inked deals with at least four digital health startups, including PokitDok, Kinsights, MedHelp, and CrowdMed. Considering how small these startups were, it is unlikely these deals brought in significant revenue.

Meanwhile, Evidation continued to support its AchieveMint platform, but as the chart in the Growth Metrics section below indicates, the rewards platform was not a key area of focus in 2015 and 2016. AchieveMint, however, resulted in Evidation’s one notable legal spat.

In 2015 Intuit, which had acquired the popular consumer-facing, financial software company, Mint, a decade before, began to aggressively defend its trademark. Evidation’s brands, AchieveMint and a similar, unused mark for “BetterMint,” became two of many targets in Intuit’s trademark lawsuit at the end of the year.

Evidation changed the name of the platform to the more generic Achievement, which is the program’s name today.

2017-2020: Evidation finds its groove. Digital measures, decentralized studies, RWE.

After working through its growing pains, in 2017 Evidation Health entered its most successful period to date — its past four years of operation. Here’s how the company introduced itself on its homepage now:

While it was certainly seemed like a more subtle shift than its 2015 pivot, Evidation Health’s transformation in 2017 marked the return of Achievement as a central component of the company’s strategy.

At the very end of 2016, Evidation worked to onboard more and more participants in Achievement. One paid blog post from that time period noted that recent studies paid participants between $60 and $150. It also said that at the time Achievement capped annual payouts at $599.

Today, the Achievement app’s page on the iTunes store explains that participants can earn $10 for every 10,000 points, and that rewards are paid out within seven business days. There is no cap on earnings anymore.

Back to what Evidation offers its life sciences customers.

The screenshot below is one of the few examples of how Evidation breaks down how life sciences companies, medtech, big tech, government agencies and others use its offerings today:

We’ll cover more details on Evidation’s current and future product mix as well as its business model in a few sections. First, let’s look at a few of its growth metrics.

Evidation Health’s Growth Metrics

As noted above, throughout Evidation’s many twists and turns one of the programs the company has consistently offered is its Achievement platform. While The Activity Exchange launched Achievemint back in 2012, it wasn’t until the end of 2016 that the platform clocked more than 500,000 participants. That number hit 2 million by mid-2018 and is right around 4 million today.

Achievement participant growth starts to climb in 2017

Achievement’s growth rate has a clear rate change in early 2017 — around the time that Evidation increased its emphasis on working with pharma, medtech, big tech and federal agencies and away from a primary focus of helping digital health companies validate their offerings. That time also aligns with the company’s Series B funding rounds, which included $15 million in October 2016 and another $10 million in April 2017. It’s likely that the newly cash-flush Evidation began to spend more heavily on paid marketing acquisition for Achievement participants.

As an aside, Evidation Health is in that small cadre of digital health companies that has raised more than $100 million in venture funding. Its more recent raise was in July 2020 when it brought in $45 million.

Back-of-the-envelope annual revenues for Evidation Health

Officially, Evidation Health has kept its revenue figures quiet. What follows is a rough estimate of annual revenues for Evidation during its “digital measures” company years (2016 through 2020). It is based on a few sources of information, which I’ll spell out here so you can decide how seriously to take these estimates:

• One former employee shared that the company launched 6 studies in 2016, 25 studies in 2017, and 37 studies in 2018. The combined revenues from these projects totaled about $18 million. Another former employee confirmed that during those three years Evidation launched about 70 studies.
• In a recent job posting for a new CFO, Evidation shared that its annual revenues have increased 100 percent year-over-year since 2014.
• A government filing from mid-2019 from Evidation confirms that the company reported annual revenues under $30 million, which is the cut-off for what the feds consider a “small business” in the government contractor category that Evidation is in. Update: This piece of information is not as useful as I originally thought. The government figures out that revenue figure by averaging the company’s past three or five years. If it went with the three-year calculation, then Evidation told the government it brought in less than $30 million in annual revenues on average for the years 2016, 2017, 2018. If it was over the five year period, then it is even less helpful. So, Evidation’s revenue numbers have less of an upward boundary than I originally thought. The numbers in the chart could be a little low as a result, but I think it’s still the best estimate given the information available.

Is Evidation on track for $40 million in revenues this year?

For the years 2016-2018, you could assume each of the studies had an average deal size of about $250,000, if you divide 68 studies into the $18 million revenue figure. That would come to $1.5 million for 2016, $6.25 million for 2017, and $9.25 million for 2018. But those numbers don’t conform to Evidation’s 100 percent revenue growth year-over-year. The numbers in the chart above likely over-rely on this 100 percent y-o-y metric, which I’d guess the company meant as an average growth rate between 2014 and 2019.

We know that Evidation’s two contracts with federal agencies have price tags of about $500,000 and $700,000, but the company has also conducted smaller studies with digital health startups, so these deals are likely among the company’s larger ones. Evidation has also noted in interviews that its more recent focus on conducting studies with pharma companies are bigger deals, so in reality, the 37 deals in 2018 almost certainly had a larger average value than the 25 in 2017.

In any case, if you square those figures with the company’s public claim that it is increasing revenue 100 percent year-over-year, the numbers look like the above. As of mid-2019, by this count, Evidation was on track for maybe $20 million in revenue for the year, well below the $30 million limit for the small business designation that the company told the feds it had not yet met.

Headcount went from 100 in early 2018 to more than 200 today

In March 2015 when The Activity Exchange became Evidation Health it had about 15 people. It hit 100 people in early- to mid-2018, and it counts more than 200 in its headcount today.

Customer goals: Majority of top 50 pharma by year-end 2022

At the Cowen and Company Fifth Annual Future Health Conference in June 2020, Evidation CEO Deborah Kilpatrick said the company currently works with “nearly all” of the top 10 global pharma companies today and it has a goal to work with a “significant majority” of the top 50 by the end of 2022.

Legacy: Evidation Health as early digital rights pioneer

Before we dig into Evidation’s current business and future plans, one area that Evidation is a clear leader in is digital rights. Evidation aims to make it easy for Achievement participants to turn off individual data streams (or remove consent related to individual data streams) flowing from the various apps, fitness devices, and connected medical devices they use with the Achievement platform.

Evidation’s one-and-only patent describes some of the privacy-related benefits of its platform. Generally:

Achievement allows Evidation to get consent from participants in a granular way and on an ongoing basis, not just via one blanket agreement upfront:

The company provides a number of other examples related to using automation to further privacy and maintain the participants’ data rights:

There is surprisingly little innovation in digital health that is focused on digital rights and privacy. The vast majority of companies have worked to maintain compliance with an ever-expanding number of privacy laws around the globe, but very few have sought to go beyond legal statutes. Evidation appears to be in that minority.

Evidation’s progressive approach to digital rights and privacy is also likely a big reason that it is one of the few digital health companies partnered with Apple.

After raising its latest $45 million round of funding, Evidation announced plans to move into virtual care. I have heard Evidation refer to its work in digital rights as, in part, building a foundation of trust with Achievement participants that would allow it to expand its services to them in the future. Evidation’s consent processes and approach to privacy will likely serve them well as they turn on virtual care services.

Evidation Health’s current business model

In recent weeks I have spoken with many typically articulate people working in digital health who have difficulty explaining what Evidation Health does exactly. Evidation, itself, has acknowledged this issue, too.

Generally speaking, Evidation has created a health platform that covers a wide spectrum of therapeutic areas — it’s multi-condition — and that platform is used (or has been used) by a diverse list of customer types: life sciences companies, medtech, big tech, federal agencies, digital health startups, and individual people. I can’t think of a more complex setup in digital health.

As noted in the timeline above, for the past four years, Evidation Health has focused on providing a discovery engine that uses behavior-focused studies to capture and analyze passive data from its nearly 4 million Achievement participants. That group includes people from all 50 states in the US and about 9 out of every 10 zip codes nationwide.

At the June 2020 Cowen conference mentioned above, Evidation CEO Deborah Kilpatrick listed out the therapeutic area clusters she has seen a high concentration in Evidation programs that took place the past two to three years: central nervous system, neurodegenerative diseases, chronic respiratory diseases, and cardiometabolic diseases. Kilpatrick was quick to add that there is a “longtail” of therapeutic areas that are of interest to Evidation’s customers.

If you are unfamiliar with the kind of studies Evidation has facilitated in recent years, here are a few illustrative examples:

• August 2019: Evidation, Eli Lilly and Apple shared results from a 12-week study that “evaluated 113 participants, ages 60-75, in real-world settings to determine whether Apple devices in combination with mobile applications, were able to help identify cognitive and behavioral differences among the study participants with and without mild cognitive impairment.” The project could lead to screening applications for neurodegenerative diseases.
• February 2020: Evidation, J&J and Apple opened enrollment for a study that “aims to assess whether the Heartline Study app on iPhone, and the ECG app and irregular rhythm notification feature on Apple Watch, can reduce the likelihood of stroke and improve health outcomes with earlier detection of atrial fibrillation.”
• June 2020: Evidation is working with HHS and the Gates Foundation on an early warning algorithm for the detection of COVID-19. “The Evidation platform will analyze behavior, including sleep and activity patterns, alongside self-reported symptoms for 300 people at high risk of developing COVID-19.”

Evidation’s business model: SaaS + consulting fees

According to a recent job post, Evidation’s business model is a combination of SaaS and additional consulting fees. A few of the key variables that impact the size of a deal for Evidation are the number of people in the program (or study), the breadth and depth of the data collection employed, and the duration of the study. Evidation also charges for professional services related to setting the program up and for analyzing the results on the backend.

Evidation does not operate or think of itself as a CRO. For most of the programs it facilitates, a member of the Evidation team takes the lead as the investigator. Evidation’s platform is also the official site for the study. Its Achievement platform participants are Evidation’s captive audience for its research programs, which is an unusual capability in the world of decentralized studies.

Evidation’s next big move: Virtual care

As part of its $45 million funding round this summer, Evidation revealed its next big move: It will go beyond research and into virtual care delivery.

Evidation has long-planned a move into virtual care, but the relaxed regulations around telemedicine and the changing consumer behavior that resulted from the pandemic accelerated the company’s timetable. Evidation told me that three years of progress rushed by during the first three months of the coronavirus lockdown.

Kilpatrick hinted that the company had its eye on virtual care during her remark at the Cowen event. She said:

But the company has signaled an interest in virtual care since the very beginning. During a podcast interview in mid-2016, one of the original co-founders of The Activity Exchange, Christine Lemke, who is currently president of Evidation, shared this on the company’s original insight at founding:

The move, finally, into virtual care will bring the company full circle then. Importantly, unlike past strategy shifts, this move into virtual care is adding a new business to Evidation’s pharma-focused one. It is not a pivot away from that.

Video visits as another data input to run analytics on?

In fact, and this is just speculation, but the move into virtual care may also be another way that Evidation can collect data for its study business. In that same 2016 interview, Lemke noted:

You could imagine Evidation offering this kind of option to its Achievement participants: Take advantage of this subsidized video visits offering in exchange for the data we can glean from analyzing the interaction or your facial expressions, skin tone, voice, etc. during the call.

Will Evidation’s pharma partners have a role to play in its virtual care offering?

Given Evidation’s continued focus on growing its stable of global pharma company customers, I’m curious as to whether they have any role to play in Evidation’s virtual care plans. Evidation has, so far, been reluctant to share much about its virtual care offering, but one of its pharma partners did explain how they view their role in virtual care, in general, moving forward.

Johnson & Johnson’s John Whang, who is one of the architects of the Heartline study (mentioned above) for his company — along with partners Evidation and Apple — said in a radio interview in June 2019 that when the reordering of the healthcare value chain happens, J&J wants to be ready:

He also said it is not enough to just have data and devices. Delivery must be a part of it too:

Finally, the interviewers summed up Whang’s vision for diagnostics powered by wearables, in their writeup of the radio show:

What else is next for Evidation Health? Going international. An exit?

The other big announcement that Evidation Health made this summer was that it planned to begin offering its services outside of the US. Very few digital health companies have managed to grow enough in the US to begin opening offices in other countries. Evidation’s key customer group of global pharmacos likely necessitates this move, especially since the company intends to work with a majority of the top 50 pharma companies in the world within the next 18 months.

Finally, it should come as no surprise that after more than $100 million raised and nearly eight years in existence, Evidation is beginning to think more seriously about an exit. In its recent job listing for a CFO the company specifically refers to this time as a “critical phase of the company” and notes that having “experience scaling [a] company through aggressive growth and exit phases is a strong plus.”