Within the post-COVID world, VCs say it’s not as straightforward to get enthusiastic about investing in digital well being. Deal exercise in healthcare IT was comparatively flat in Q1 2024 at 74 complete offers, valued at about $1 billion complete, up solely 3% from the year-ago quarter, in response to PitchBook information.
Nonetheless, promising startups have grabbed buyers’ consideration this yr. TechCrunch spoke with a couple of dozen healthcare VCs in regards to the corporations they suppose have essentially the most promising future. Whereas lately fashioned AI-driven startups which are fixing staggering administrative challenges within the U.S. healthcare system dominated their suggestions, in addition they talked about a number of barely older, non-AI-focused companies.
We narrowed their ideas to the record of names that multiple VC talked about, which got here in at a fair 10 corporations. VCs mentioned with us the businesses that have been each of their portfolios and never.
Abridge
What it does: Makes use of AI to automate medical information primarily based on conversations between docs and sufferers.
Based in 2018 by Shiv Rao, a training heart specialist, Abridge is an early entrant into the medical note-taking area and one which has secured integration with the omnipotent Epic Techniques well being information software program.
Why it’s promising: The Pittsburgh-based startup generates pleasure amongst buyers and hospital techniques desirous to release physicians’ time spent on note-taking. Abridge is the well being tech startup that amongst buyers we talked to was talked about essentially the most.
Some buyers stated that Abridge is main its class. Different corporations competing to dominate the AI-powered medical note-taking market embody Atmosphere, Nabla, Microsoft-owned Nuance and Suki.
Funding: In February, Abridge raised a $150 million Collection C led by Lightspeed Ventures at a valuation of $850 million, a mere 4 months after the digital medical scribe startup grabbed a $30 million Collection B from Spark Capital, Bessemer Enterprise Companions, CVS Well being Ventures and others.
CodaMetrix
What it does: Based in 2019, CodaMetrix makes use of AI to automate medical coding. The corporate’s know-how interprets medical notes saved in digital well being information into diagnostic codes, serving to to cut back errors and administrative burdens.
Why it’s promising: Medical coding is tedious and error-prone. Getting into an incorrect code for a situation or therapy can result in insurance coverage rejection of claims and different administrative issues. Furthermore, the burden of coming into codes falls on already busy physicians and nurses, resulting in elevated stress and burnout.
The corporate has rivals, together with Fathom Well being, however buyers say that CodaMetrix has one of many largest annotated coding datasets.
Funding and valuation: In March, CodaMetrix grabbed a $40 million Collection B from Transformation Capital with participation of returning buyers SignalFire and Cressey Ventures. The deal valued the Boston-based firm at $220 million, in response to PitchBook.
Cohere Well being
What it does: Cohere Well being expedites medical insurance approval course of, often called prior authorization, for medical circumstances with the assistance of AI.
Why it’s promising: Prior authorization administration may take medical and administrative workers hours because it requires gathering acceptable documentation for submission to well being insurers or Medicaid. Cohere Well being’s AI can cut back the time it takes to do that to minutes, saving medical and administrative workers hours on these duties.
Buyers say that Cohere is for now the chief within the area, however different startups that expedite medical insurance approval for medical circumstances embody Anterior and Alaffia Well being.
Funding: Cohere Well being raised a $50 million Collection B earlier this yr from Deerfield Administration with participation from Outline Ventures, Polaris Companions, Longitude Capital and Flare Capital Companions.
Develop Remedy
What it does: Develop Remedy connects therapists who wish to begin impartial practices with sufferers and insurers. Based in 2020, the startup employs the so-called business-in-box mannequin as a result of it provides psychological well being professionals instruments for submitting claims, receiving funds and being matched with sufferers.
Why it’s promising: The corporate claims that its enterprise mannequin provides therapists extra flexibility than in the event that they have been to offer their companies by way of marketplaces like Headway or Lyra. Whereas it’s not clear whether or not that’s certainly the case, Develop, true to its title, is rising quick, buyers say.
Funding and valaution: In April, Develop closed an $88 million Collection C led by Sequoia at a $1.4 billion valuation, in response to PitchBook information.
Equip
What it does: 4-year-old Equip offers on-line therapy for teenagers, teenagers and adults in all 50 states and accepts most well being insurances. Equip suppliers are additionally skilled to deal with co-occurring circumstances like anxiousness, melancholy and obsessive-compulsive dysfunction (OCD).
Why it’s promising: About 10% of the U.S. inhabitants develops an consuming dysfunction throughout their lives, however solely a fraction of those folks obtain assist, in response to the Nationwide Consuming Problems Affiliation. The corporate’s providing brings care to those that don’t dwell close to an consuming dysfunction facility or choose to be handled on-line.
Funding and valuation: Equip was final valued at $505 million and has secured a complete of $135 million in funding from buyers, together with Optum Ventures and Common Catalyst, in response to PitchBook information.
Maven
What it does: The New York-based well being clinic and advantages platform provides companies for fertility, adoption, parenting, pediatrics and menopause by way of employers, together with Microsoft and AT&T. Maven additionally serves Medicaid sufferers.
Why it’s promising: Buyers say that 10-year-old Maven continues to develop, provided that its space of focus — digital well being companies for girls and households — has been traditionally underserved. Whereas VC curiosity in ladies’s well being has grown lately, the U.S. Supreme Courtroom’s determination to overturn Roe v. Wade in 2022 has shined a fair brighter highlight on the necessity for applied sciences that serve the feminine inhabitants.
Funding and valuation: Since its founding, Maven has raised practically $300 million in funding and was final valued in late 2022 at $1.35 billion in a Collection E spherical led by Common Catalyst with the participation of VCs, together with Lux Capital, Oak HC/FT and Sequoia.
Memora Well being
What it does: Memora Well being provides digital AI-based care coordination, decreasing administrative burdens for medical workers. The corporate’s know-how makes use of textual content messages to speak with sufferers, automating duties like appointment reminders, answering sufferers’ widespread questions and amassing information about signs and post-procedure restoration.
Why it’s promising: Like many different AI-based healthcare startups, Memora saves medical workers time. The corporate additionally helps sufferers really feel extra supported on their well being journey.
Funding: The corporate spun out of Harvard Innovation Lab and went by way of Y Combinator in 2018. Since then, it has raised practically $80 million and was valued in April 2023 at $430 million, in response to PitchBook information. Memora’s buyers embody Common Catalyst and Andreessen Horowitz.
SmarterDx
What it does: Based in 2020, SmarterDx makes use of AI to assist hospitals not miss out on revenues by analyzing sufferers’ lab outcomes, drugs and docs’ notes to search out minor errors and omissions in sufferers’ diagnoses and related medical codes. The corporate’s know-how critiques affected person charts for accuracy earlier than a declare is distributed to medical insurance or Medicare.
Why it’s promising: Buyers say that since Smarter Dx helps well being techniques notice extra revenues, the worth of the corporate’s know-how is simple to measure.
Funding: In Might, SmarterDx raised a $50 million Collection B spherical led by Transformation Capital, with participation from Bessemer Enterprise Companions, Flare Capital Companions and Floodgate Fund. The most recent capital infusion introduced the corporate’s complete funding to $71 million.
Summer season Well being
What it does: The 2-year-old Summer season Well being connects mother and father to pediatricians who, inside minutes, reply to pressing care and behavioral considerations. The corporate offers its textual content messaging service on to customers and thru employers who supply entry to Summer season Well being as a profit.
Why it’s promising: Busy and nervous mother and father need solutions to their kids’s well being points straight away and across the clock. Summer season Well being reduces mother and father’ considerations as a result of they will get quick responses to their questions through an app.
Funding: In April, Summer season Well being raised its $12 million Collection A led by 7wireVentures and current buyers together with Sequoia, Lux Capital and Chelsea Clinton’s Metrodora Ventures.
Transcarent
What it does: 4-year-old Transcarent helps massive corporations get monetary savings on offering medical insurance to staff. The startup provides staff entry to discounted drugs, telehealth companies and customized AI-generated solutions about their well being protection.
Why it’s promising: A part of the corporate’s quick rise may very well be attributed to its founder, Glen Tullman, who beforehand began Livongo, a persistent situation administration firm Teledoc acquired for $18.5 billion in 2020.
The corporate additionally lately launched an AI platform that solutions members’ questions on protection, provides scientific data and connects them with medical workers as wanted.
Funding and valuation: In Might, the corporate raised a $450 million Collection D at a $2.2 billion valuation led by Common Catalyst and 7wireVentures.
