After its 'best year ever,' Dexcom launches diabetes-focused venture capital fund

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At the close of last year Dexcom reported a war chest of $2.71 billion in cash and marketable securities, and the company said it expects 2021’s annual revenue to grow between 15% and 20% to over $2.21 billion. (Dexcom)

After what the diabetes data company has described as its best year ever, Dexcom is starting to spend its extra cash—first on its inaugural Super Bowl ad, and now to launch its very own venture capital fund.

Dexcom Ventures aims to identify and invest in technologies that will support the company’s work in continuous glucose monitoring and related software applications for helping people manage their diabetes. This includes new types of blood sugar sensors, as well as broader methods of tracking a person’s metabolism.

“We strive to be value-add strategic investors by leveraging access to Dexcom’s unique industry expertise and technology leadership,” said incoming Dexcom Ventures chief Steve Pacelli, who also serves as the company’s executive VP of strategy and corporate development. The company’s initial investment in the fund was not disclosed.

“While we have matured as a company over the years, we still consider ourselves to be a ‘start-up’ of sorts,” Pacelli said. “We feel well-positioned to invest early and support our portfolio companies as they pioneer markets.”

RELATED: Teladoc to pilot CGMs in Type 2 diabetes as Dexcom eyes new growth market

“Of sorts,” however, may be doing a little heavy lifting: Dexcom posted $1.93 billion in revenue for the full year of 2020, growing 31% over the year before—and set a company record for new patient additions, despite a worldwide pandemic. 

At the close of last year, Dexcom reported a war chest of $2.71 billion in cash and marketable securities, and the company said it expects 2021’s annual revenue to grow between 15% and 20% to over $2.21 billion, as it eyes expansions into prediabetes and Type 2 diabetes.

RELATED: Dexcom's first Super Bowl ad sparks social media buzz with celebrity Nick Jonas—and price concerns

That’s more than enough coin to buy 30 seconds of Super Bowl ad time—and to sign up an A-list celebrity spokesman in Nick Jonas, the musician and actor living with Type 1 diabetes—although that new publicity brought up public concerns over the affordability of Dexcom’s products.

Elsewhere, the company is planning to build new roads for its CGM systems to people with Type 2 diabetes, including those who are or are not managing the condition with intensive insulin therapies.

“Non-intensive Type 2 patients are a huge opportunity here in the U.S., with seven times more patients than there are in the intensive insulin space,” Dexcom CEO Kevin Sayer said last month during the annual J.P. Morgan Healthcare Conference. “And if you add to that prediabetes and diabetes prevention, the number of opportunities to serve patients in this market just becomes massive.”

To start, the company has teamed up with the telehealth giant Teladoc, to run free pilot demonstrations of Dexcom’s wearables and deliver the same information that it provides to people with Type 1 diabetes.

“I'm frequently told by our team that when this market goes, it is going to explode—it's not going to be small, and it's not going to be slow,” Sayer added.