3 Lessons Learned from Our Co-Investment in Omada Health
Sourcing, Structuring and Selection
In venture capital, we celebrate the wins, and rightly so, but the real story is rarely told in the opening bell or the final sale price. It’s forged years earlier, in the intricate mechanics of a deal and the trusted relationships that bring it to life.
The recent IPO of Omada Health, our first-ever co-investment with a VC partner, was a major milestone for GEX. More than that, it was a masterclass in how a strategic co-investment, from a Series C entry to a public market exit, truly works. Here are the key lessons from that eight-year journey.
Lesson 1: The Magic of the First Check
Our journey with Omada didn't start with our Series C investment in 2017. It began with a relationship. The opportunity came to us through one of our VC network partners, a manager we had intentionally backed just eight months prior, specifically because of their specialist access and collaborative approach.
This manager wasn't just another investor in Omada; they were the first check in as an angel investor. They had backed the company six years before our investment, establishing a rare and powerful bond with the founders. There’s a certain magic in that first check. It signifies pure, early conviction and creates a level of trust that a company never forgets. When the oversubscribed Series C round came together, it was this trusted partner who brought us the opportunity, validating our strategy of aligning with managers who are true partners to their founders.
Lesson 2: Structure for Alignment, Not for Fees
The mechanics of a co-investment reveal everything about the motives behind it. In a market where many managers see co-investment vehicles as another way to generate fees, this deal was a lesson in true alignment.
The financing was oversubscribed, with participation from strategic players like Cigna, Quest Diagnostics and the world's largest diabetes drug vendor, Sanofi, alongside a roster of top-tier existing investors like Andreessen Horowitz, Norwest, and USVP. Our VC partner committed $5M to the round and offered us a portion of that allocation through a side vehicle. Notably, this vehicle had no management fees and no carried interest for the manager. We were responsible only for our pro-rata share of legal and administrative expenses. The manager wasn't being greedy by monetizing the side vehicle; their goal was to show continued support for the company. They would only win if the company became a breakout success. This is a critical lesson we carry forward: the best partnerships are built on shared success, not fee generation. It’s a principle that seems to be reversing in the current market, making us even more steadfast in our approach.
Lesson 3: Selection for the Long Haul
With sourcing and structure aligned, the final piece was selection. We saw a company hitting its stride, bolstered by our own interest in digital health and the tangible IoT angle of its connected scale, which created a powerful data-driven feedback loop for users.
Our diligence confirmed Omada's strengths: a clinically-validated product, explosive revenue growth, and powerful strategic buy-in. The round was led by Cigna, a major healthcare player, whose decision was driven by outstanding feedback from their own employees using the platform. As part of the investment, Cigna also entered into a large partnership to dramatically expand Omada’s reach across its network of covered lives, providing significant upside beyond the company's already impressive organic growth. With a roster of top-tier existing investors also participating, the signal was clear: this was a category-defining company on a path to a major exit.
This journey, from a 2017 co-investment to a 2025 IPO, has been a testament to our strategy. It reinforces our belief that the best opportunities are sourced through trusted, long-term relationships and that the soundest investments are built on a structure of shared success.
This is an educational post about GEX Ventures investments. It is for informational purposes only and may not be relied on as legal, tax, securities or investment advice and does not constitute an offer to buy or sell interest in any products offered by us or others. Email me at mk@gex.vc or leave a comment if you’d like to exchange ideas.