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, according to PitchBook data.
Nonetheless, promising startups have grabbed traders’ consideration this yr. TechCrunch spoke with a few dozen healthcare VCs concerning the firms 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 solutions to the listing of names that a couple of VC talked about, which got here in at an excellent 10 firms. VCs mentioned with us the businesses that had been each of their portfolios and never.
Abridge
What it does: Makes use of AI to automate medical records 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 Programs well being information software program.
Why it’s promising: The Pittsburgh-based startup generates pleasure amongst traders and hospital methods desirous to unencumber physicians’ time spent on note-taking. Abridge is the well being tech startup that amongst traders we talked to was talked about essentially the most.
Some traders stated that Abridge is main its class. Different firms 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 Sequence 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 Sequence 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 expertise interprets medical notes saved in digital well being information into diagnostic codes, serving to to scale 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 getting 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 traders say that CodaMetrix has one of many largest annotated coding datasets.
Funding and valuation: In March, CodaMetrix grabbed a $40 million Sequence B from Transformation Capital with participation of returning traders 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 Health expedites medical health insurance approval course of, often known as prior authorization, for medical circumstances with the assistance of AI.
Why it’s promising: Prior authorization administration may take medical and administrative employees hours because it requires gathering applicable 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 employees hours on these duties.
Traders say that Cohere is for now the chief within the area, however different startups that expedite medical health insurance approval for medical circumstances embody Anterior and Alaffia Well being.
Funding: Cohere Well being raised a $50 million Sequence 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: Grow Therapy connects therapists who need to begin unbiased practices with sufferers and insurers. Based in 2020, the startup employs the so-called business-in-box mannequin as a result of it offers 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 affords therapists extra flexibility than in the event that they had been to supply their providers by 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, traders say.
Funding and valaution: In April, Develop closed an $88 million Sequence C led by Sequoia at a $1.4 billion valuation, in response to PitchBook knowledge.
Equip
What it does: 4-year-old Equip gives on-line therapy for youths, teenagers and adults in all 50 states and accepts most well being insurances. Equip suppliers are additionally educated to deal with co-occurring circumstances like anxiousness, despair 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 individuals obtain assist, according to the National Eating Disorders Association. The corporate’s providing brings care to those that don’t dwell close to an consuming dysfunction facility or favor 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 traders, together with Optum Ventures and Common Catalyst, in response to PitchBook knowledge.
Maven
What it does: The New York-based well being clinic and advantages platform affords providers for fertility, adoption, parenting, pediatrics and menopause by employers, together with Microsoft and AT&T. Maven additionally serves Medicaid sufferers.
Why it’s promising: Traders say that 10-year-old Maven continues to develop, on condition that its space of focus — digital well being providers for girls and households — has been traditionally underserved. Whereas VC interest in women’s health has grown in recent times, the U.S. Supreme Court docket’s determination to overturn Roe v. Wade in 2022 has shined an excellent brighter highlight on the necessity for applied sciences that serve the feminine inhabitants.
Funding and valuation: Since its founding, Maven has raised almost $300 million in funding and was final valued in late 2022 at $1.35 billion in a Sequence 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 Health affords digital AI-based care coordination, lowering administrative burdens for medical employees. The corporate’s expertise makes use of textual content messages to speak with sufferers, automating duties like appointment reminders, answering sufferers’ frequent questions and gathering knowledge about signs and post-procedure restoration.
Why it’s promising: Like many different AI-based healthcare startups, Memora saves medical employees 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 Y Combinator in 2018. Since then, it has raised almost $80 million and was valued in April 2023 at $430 million, in response to PitchBook knowledge. Memora’s traders 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, medicines and docs’ notes to search out minor errors and omissions in sufferers’ diagnoses and related medical codes. The corporate’s expertise evaluations affected person charts for accuracy earlier than a declare is distributed to medical health insurance or Medicare.
Why it’s promising: Traders say that since Smarter Dx helps well being methods understand extra revenues, the worth of the corporate’s expertise is straightforward to measure.
Funding: In Could, SmarterDx raised a $50 million Series B spherical led by Transformation Capital, with participation from Bessemer Enterprise Companions, Flare Capital Companions and Floodgate Fund. The newest capital infusion introduced the corporate’s complete funding to $71 million.
Summer season Well being
What it does: The 2-year-old Summer Health connects dad and mom to pediatricians who, inside minutes, reply to pressing care and behavioral considerations. The corporate gives its textual content messaging service on to shoppers and thru employers who supply entry to Summer season Well being as a profit.
Why it’s promising: Busy and anxious dad and mom need solutions to their kids’s well being points straight away and across the clock. Summer season Well being reduces dad and mom’ considerations as a result of they will get quick responses to their questions by way of an app.
Funding: In April, Summer season Well being raised its $12 million Sequence A led by 7wireVentures and current traders together with Sequoia, Lux Capital and Chelsea Clinton’s Metrodora Ventures.
Transcarent
What it does: 4-year-old Transcarent helps giant firms get monetary savings on offering medical health insurance to workers. The startup offers workers entry to discounted medicines, telehealth providers and personalised AI-generated solutions about their well being protection.
Why it’s promising: A part of the corporate’s quick rise might be attributed to its founder, Glen Tullman, who beforehand began Livongo, a power 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, affords scientific info and connects them with medical employees as wanted.
Funding and valuation: In Could, the corporate raised a $450 million Sequence D at a $2.2 billion valuation led by Common Catalyst and 7wireVentures.
