The news: Lab testing company Function Health raised a $298 million oversubscribed Series B funding round, bringing the company’s valuation to $2.5 billion.

• In partnership with Quest Diagnostics, Function offers about 160 lab tests detecting numerous health conditions.
• Function offers regular bloodwork tests that patients would otherwise commonly get at annual checkups, but it also screens for toxic metals like lead and markers of autoimmune diseases.
• Members pay a $365 annual fee for two comprehensive tests a year (it doesn’t take insurance), but many services—like some blood tests available for cancer—cost extra.
• Earlier this year, Function acquired Ezra, a startup that offers full-body MRI scans, available for $499 on top of the membership fee.

Why it matters: More companies are moving into the direct-to-consumer (D2C) diagnostic testing market—a space that has historically been reserved for testing providers like LabCorp and Quest to conduct bloodwork referred by physicians.

Now, health tech players are partnering with lab incumbents to add diagnostic testing to their offerings.

• Hims & Hers just added direct-to-consumer (D2C) lab testing services in a partnership with Quest.
• Wearable companies Oura and Whoop each recently rolled out lab test offerings to consumers, also via Quest tie-ups. The wearable companies say they aim to provide tailored insights and health coaching services based on members’ test results.

The trend reflects consumers’ growing interest in proactive testing versus waiting until symptoms arise. Function boasts hundreds of thousands of members. Similar adoption rates have been reported for companies that offer full-body scans, including one (Neko Health) that claims to have a waitlist of over 100,000 people.

Implications for the D2C health testing market: Consumer adoption of cash-pay wellness services is surging, though offerings exceeding $1,000 all-in may see limited uptake.

Testing for everything also has a downside: harmless abnormalities can surface, triggering unnecessary anxiety and follow-up costs. This is a key argument made by clinicians who think full-body MRI scans do more harm than good. Companies entering D2C lab testing must avoid overpromising the value of testing hundreds of biomarkers, ground their claims in solid science, and be transparent about pricing—including add-on costs.

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