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Mental health startup eQuoo will be distributed by Unilever in new global youth campaign
Last December (yes, in the before-times) U.K.-based mental health startup eQuoo had a round of announcements, becoming the NHS-approved mental health game, as well as signing Barmer, the largest insurance company in Germany, as a client.
It has now been selected as the Mental Health App for Unilever’s new global initiative aimed at the mental health of young people. The move came after Unilever’s People Data Centre (PDC) selected eQuoo out of all the mental health games on the Google Play store, being, as it is, one of the few backed by scientific research. Unilever’s new brand campaign, which will feature eQuoo app, will be marketed to over 70,000 18 to 35-year-olds.
“eQuoo teaches important skills in a fun and engaging way,” said Unilever’s Global PDC Search and Social Analyst, Janelle Tomayo. “The game teaches you how to become a better communicator using fictional characters to navigate through difficult circumstances with skills and storylines empirically based on current psychological research.”
Silja Litvin, founder and CEO of eQuoo said: “1 in 3 young adults experience an anxiety disorder, crippling and harming too many people at the cusp of their adult lives. Together eQuoo and Unilever will equip thousands of people with the personal resilience to manage the pressures of today’s world.”
PsycApps, which makes eQuoo, is a digital mental health startup that is using gamification, cognitive behavioral therapy (CBT), positive psychology and AI to treat mental illness, using evidence-based features. It has achieved a top rating at ORCHA, the leading health app assessment platform, and is also available through the GP EMIS data bank, meaning that NHS doctors can now refer their patients to eQuoo to improve their mental health and well-being.
The market for mental health-oriented games and apps is increasing considerably. AKILI, the first ADHD game for children, attained FDA approval. In June, the European Medicines Agency approved Akili’s digital therapy for attention deficit hyperactivity disorder (ADHD), which uses a video game to treat the underlying cause of the condition. The European Commission has granted a CE mark for the game called EndeavorRx, allowing the product to be marketed in Europe.
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Activ Surgical raises $15 million to advance autonomous and collaborative robotic surgery
Boston-based startup Activ Surgical has raised a $15 million round of venture funding led by ARTIS Ventures, and including participation from LRVHealth, DNS Capital, GreatPoint Ventures, Tao Capital Partners and Rising Tide VC. The round will help Activ continue to develop and expand availability of its software platform, which it launched to market in May.
Activ Surgical’s ActivEdge platform uses data collected from surgical implements outfitted with sensors created by the company to collect real-time data during the actual surgical process. That data is then used to inform the development of machine learning and AI-based visualizations that can provide guidance to surgeons and surgical systems to help them reduce the occurrence of potential errors, and ultimately improve outcomes for patients.
The company’s primary aim is to bring technological innovation to the sphere of surgical vision, which still relies primarily on methods like using fluorescent dyes that date back more than 70 years. Activ wants to use computer vision to provide real-time visual insight into things that surgeons wouldn’t be able to see on their own — and ultimately to use those insights to power the next generation of both collaborative surgical robots and eventually even fully autonomous robotic surgical procedures.
ActivSight is the company’s first product in its ActivEdge platform offering, and is a small, connected imaging coddle that can be attached to existing laparoscopic and arthroscopic surgical instruments. The company is currently tracking toward getting their hardware cleared by the FDA for use by Q4 this year, and are working with eight hospital partners for pilot projects in the U.S.
The company has raised a total of $32 million in funding to date.
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KlearNow raises $16 million to bring customs clearance industry into the digital age
Customs is the sieve of international supply chains. And yet despite its critical role, clearing customs for freight brokers can be a slow and opaque process reliant on manual data entry and prone to errors.
Silicon Valley-based KlearNow has developed a platform that aims to bring customs clearance into the digital age. Now, with $16 million new funding, KlearNow aims to expand its geographic reach and improve its product to cover increasingly complex export-import verticals and time-sensitive shipments.
The company has certification to handle any import into the U.S., no matter what the commodity is. KlearNow is close to getting certified in Canada and the U.K., and plans to expand to Netherlands, Belgium, Spain and Germany. KlearNow has about two dozen customers.
The Series A funding round was led by GreatPoint Ventures, with additional participation from Autotech Ventures, Argean Capital and Monta Vista Capital . Ashok Krishnamurthi, managing partner at GreatPoint Ventures, will join KlearNow’s board. Daniel Hoffer from Autotech Ventures is joining as a board observer.
“This is a significant opportunity to transform an archaic industry that is key to global commerce,” Krishnamurthi said in a statement.
The freight ecosystem is filled with different players from the factories and port authorities to the ship liners and the last-mile delivery companies. Each of them have their own systems.
“There’s no one system that you can transmit the data to,” KlearNow founder and CEO Sam Tyagi said in a recent interview. “So everybody dumps technology down to a PDF or a PNG or some sort of format that everybody can read. The broker gets those documents, and then they print it out — so now they become non-digital.”
If you go to any customs brokers office they look like the old doctor’s office where all those folders are there with nicely arranged, really organized but very manual process,” he added. From here, Tyagi said, a broker will read off from those printed documents and type the information into another system that is communicated to Customs and Border Patrol’s system.
“It is very manual, it’s very small, and they work in a siloed system,” Tyagi said. “There is no visibility for the customer, or the importer, and it’s very costly because of the manual intervention.”
KlearNow developed a digital customs clearance platform that aims to be agnostic. This allows importers, customs brokers and freight forwarders to integrate with local customs authorities and conduct business on a single digital platform remotely and in real time. The platform automates this process to eliminate errors and reduces the time to clear customs. KlearNow says it can slash customs clearance times from hours to minutes.
The startup is also betting that its platform will find new customers in this remote work era that was caused by the COVID-19 pandemic. Custom brokers, who might normally travel into central offices and manage physical paperwork, are now faced with completing that task from home.
“Remote work is impossible for these people,” because they often need to access large-format printers, Tyagi said.
The company said its digital platform can funnel new clients, like these newly remote workers, directly to brokers for global customs clearance.
Tyagi said the company has also added new capabilities in response to COVID-19, such as expediting their FDA module to clear much-needed medical supplies, and is temporarily offering free clearance for nonprofit organizations that are importing masks, hand sanitizers and ventilators.
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Healthcare startups Nurx and Carbon Health ship at-home COVID-19 test sample kits
Efforts to get at-home test kits for the COVID-19 coronavirus are ramping up quickly, and two more health industry startups are bringing their own products to market, with both Carbon Health and Nurx starting to ship their own in-home sample collection kits.
Both of these new offerings are the same in terms of approach to testing: They deliver swab-based sample collection hardware that people can use at home to collect a mucus sample, which they then ship back using included, safety approved, projective packaging to be tested by one of the existing FDA-approved commercial labs across the country.
These tests follow the PCR-based method, which tests for the genetic presence of the COVID-19 virus in a patient. These have a high degree of accuracy, at least when performed in a controlled setting and administered by a medical professional, and are the same tests that are available via drive-through testing stations being set up by state agencies.
At-home use is relatively new to market, and could introduce some potential for error in the collection part of the process, but both Carbon Health and Nurx are offering consultation with medical professionals to help ensure that samples are collected properly, and that results, when available, are correctly interpreted and provided with guidance on next steps for those taking the tests.
None of these tests are free — the Carbon Health test costs $167.50, and the Nurx test costs $181, including shipping and assessment. These are in line with other offerings, including the one from Everlywell we covered earlier this week, which retails for $135. These are described as essentially at-cost prices, and all parties say they are subject to coverage by FSA or HSA money, or potentially by insurers depending on a person’s plan.
One big question around these types of tests is how much supply will be available. Nasopharyngeal swabs used for the in-person type of testing are already reportedly in short supply in some regions, and testing needs are only growing. Carbon is using different swabs to collect a simple saliva sample, which it notes are not in as short supply as the nasopharyngeal version. Other types of tests, including a “serological” one being developed by startup Scanwell, instead work by analyzing a patient’s blood, and could provide some relief for the swab-based tests, especially now that the FDA has expanded its emergency guidance to include their use.
Nurx, which also offers at-home HPV screening, says that it will have 10,000 kits available to patients “over the coming weeks,” and hopes to expand to cover “over 100,000 patients” in the “near future.” Carbon Health CEO and co-founder Eren Bali tells me that it should ramp to around “10,000 per day capacity in about two weeks,” through its medical device partner Curative Inc., and that it can do 50 per day today, with an estimated increase to 150 per day by Monday and 1,000 per day by end of week.
All of these tests are gated by a screening and assessment questionnaire, and the round-trip time is likely to take a few days even with round-trip shipping due to testing times. It may seem like a lot of these are popping up, but these startups at least have proven track records in healthcare services, and there will be a need for very widespread testing in order for any broad attempt to flatten the curve of the virus to prove successful, so expect more of these providers to come on line.
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Scanwell aims to launch at-home 15-minute coronavirus test, but it still needs FDA approval
At-home diagnostics startup Scanwell, which produces smartphone-based testing for UTIs, is working on getting at-home testing for the novel coronavirus into the hands of U.S. residents. The technology, which was developed by Chinese diagnostic technology company INNOVITA and has already been approved by China’s equivalent of the FDA and used by “millions” in China, can be taken at home in 15 minutes with the guidance of a medical professional via telehealth, and produces results in just hours.
Scanwell’s test will require FDA clearance, but the company tells me that it’s in the process of securing approval through the FDA’s accelerated emergency certification program. The FDA guidance says that this approval process should take 6-8 weeks (though that “could be faster,” Scanwell says), and Scanwell is aiming to be ready to go with shipping these as soon as it receives that approval. While the U.S. drug regulatory agency previously had only included PCR tests in its protocols, it updated that guidance to include serological tests earlier this week. Scanwell further says they “don’t anticipate any issues with FDA approval.”
The test that Scanwell is aiming to launch uses what’s called a ‘serological’ technique, which looks for antibodies in a patient’s blood. These are only present if someone has been exposed to the SARS-CoV-2 virus, since as of right now researchers haven’t found any evidence that natural antibodies to this particular virus exist without exposure. By contrast, the types of tests that are currently in use in the U.S. are “PCR” tests, which use a molecular-based approach to determine if the virus is present genetically in a mucus sample.
The PCR type of test is technically more accurate than the serological variety, but the serological version is much easier to administer, and produces results more quickly. It’s also still very accurate on the whole, and is much cheaper to produce than the PCR version. Plus, it could help expand efforts beyond testing only the most severe cases with symptoms present, and do a much better job of illuminating the full extent of the presence of the virus, including among people with mild cases who have already recovered at home, and those who are asymptomatic but carrying the virus with the possibility of infecting others.
Also, while other, PCR-based at-home testing options already exist, like one from Everlywell that will start going out on Monday, require round-tripping test samples, adding time, complexity and cost and relying on testing materials like swabs that are in short supply globally.
Once the test is available, people deemed eligible via Scanwell’s screening process in their Scanwell Health app will be sent the test via next-day delivery. They’ll be guided by telehealth partner Lemonaid‘s licensed doctors and nurse practitioners, and they’ll then receive results and further guidance about those results via the app within a few hours. The whole testing process will cost $70, which Scanwell says just covers its costs (it’s also looking at ways to provide free service to those who need it), and will be deployed first in Washington, California and New York, as well as other areas depending on the severity of their coronavirus situation.
That the tests will take potentially 6-8 weeks to come to market seems like a long time, given the current state of the rapidly evolving COVID-19 situation and testing. But we’ll likely still be very much in need of testing options at that time, especially ones that can serve people who aren’t necessarily meeting the criteria for other available testing resources.
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Paige raises $45M more to map the pathology of cancer using AI
One of the more notable startups using artificial intelligence to understand and fight cancer has raised $45 million more in funding to continue building out its operations and inch closer to commercialising its work.
Paige — which applies AI-based methods such as machine learning to better map the pathology of cancer, an essential component of understanding the origins and progress of a disease with seemingly infinite mutations (its name is an acronym of Pathology AI Guidance Engine) — says it will be use the funding to inch closer to FDA approvals for products it is developing in areas such as biomarkers and prognostic capabilities.
It also plans to use the funding to continue developing better ways of diagnosing and ultimately fighting the disease, as well as exploring further commercial opportunities for its work, specifically within the bio-pharmaceutical industry.
This round is being led by Healthcare Venture Partners, with previous investor Breyer Capital, Kenan Turnacioglu and other funds participating. The company is not disclosing its valuation, but PitchBook noted that a first close of this round (when it raised $33 million) put the valuation at $208 million. That would value Paige now at about $220 million with the $45 million close, more than three times its valuation in its previous round.
Paige first emerged from stealth back in 2018 — with a bang.
Paige.AI — as it was known at the time — was hatched inside the Memorial Sloan Kettering Cancer Center, one of the world’s foremost institutions both for working on cancer therapies and treating cancer patients, and along with a $25 million investment led by Jim Breyer, Paige had secured exclusive access to MSK’s 25 million pathology slides as well as its intellectual property related to the AI-based computational pathology that underpinned its work. These slides make up one of the biggest repositories of its kind in the world, and as all solutions and services built on machine learning are only as good as the data that’s fed into them, they were critical to the startup’s beginnings.
The startup also launched with some serious talent behind it.
Much of the computational pathology being used by Paige had been developed by Dr Thomas Fuchs, who is known as the “father of computational pathology” and is the director of Computational Pathology in The Warren Alpert Center for Digital and Computational Pathology at Memorial Sloan Kettering, as well as a professor of machine learning at the Weill Cornell Graduate School of Medical Sciences.
Fuchs co-founded Paige with Dr David Klimstra, chairman of the department of pathology at MSK, and Fuchs had originally started out as the CEO of Paige, but was replaced earlier this year by Leo Grady, who joined from another bio-startup, Heartflow (another company backed by Healthcare Venture Partners). Fuchs is still supporting the company, but no longer in an executive role.
In the nearly two years since it launched, there have been some milestones reached. The company, which has around 30 employees today, has been the first to get an FDA breakthrough designation (which helps expedite the long process of drug approvals in urgent areas where there are few or no other options for patients) for using AI in oncology pathology. It’s also the first to get a CE mark in the same category, which opens the door to working in Europe, too. Paige has so far ingested 1.2 million images into its slide database and is using them — in algorithms that also take in genomic data, drug response data and outcome data — to work on developing diagnostic solutions.
But as with all new medical products, progress is not measured in quarters as it might be with a more typical tech startup. Moving fast and breaking things is something to be avoided. So even with all of the above advances, there has yet to be any commercial products launched, nor is Grady giving any specific time frames for when they will. And when the company came out of stealth in 2018, it said it would be focusing on breast, prostate and other major cancers, although today it’s not as quick to specify what its targets will be when it does launch commercial products.
Similarly, it’s also expanding its remit from primarily clinical environments to pharmaceutical ones.
“The clinical side is still our focus, but this is an expansion and realisation that this has a broader impact, and that includes pharmaceutical customers,” Grady said.
And the dropping of the .AI in its name was also intentional, in part a reaction it seems to how much AI gets thrown around today.
“There is a fundamental misconception, which is thinking of AI as a product and not a technology,” said Grady. “It’s a technology set that can allow you to do many things that could not have been done in the past, but you need to apply it in a meaningful way. Developing a good AI and putting that on the market will not cut it in terms of clinical adoption.”
The funding round, Grady said, saw a lot of interest from strategic investors, although the company intentionally has stayed away from these.
“We were approached by all of the scanner vendors and some of the biopharmaceutical companies,” he said. “But we made the decision to not take a strategic investment with this round because we wanted to be neutral with hardware vendors and not be too tied with any one.”
He also pointed to the challenges of talking to investors when you are working in a cutting-edge area (a challenge that has foxed many an investor also into backing the wrong horses, too, such as Theranos).
“We’re at the intersection of three areas: tech, medical devices and clinical medicine, and life sciences and biotech,” he said. “Many investors sit squarely in one and don’t feel comfortable in others. That makes the conversations challenging and short. But there has been an increasing blend between those three sectors.”
That’s where Healthcare Venture Partners fits into the mix. “Paige exemplifies the benefits of digital pathology and represents the bright future of AI-driven medical diagnosis,” said Jeff Lightcap of Healthcare Venture Partners, in a statement. “As hospitals embark on digital transformations, they will face challenges associated with these transitions. We believe Paige addresses many of these issues by enhancing the ability of clinical teams and pathologists to collaborate. We’re confident in Paige’s future and believe they will continue to develop cutting-edge technologies that enable pathology departments to transform their practices, which have changed little in the last century.”
“We applaud Paige’s commitment to building clinical AI products that will improve the diagnostic process and patient care,” added Jim Breyer of Breyer Capital, in a statement. “This is a critical time for Pathology, as pathologists are carrying a heavier workload than ever before. Paige understands their needs and the team has built cutting-edge technologies to address them. Paige represents the future of computational pathology and we look forward to their continued growth and success.”
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Where top VCs are investing in digital health
The world of healthcare has notoriously been described as “broken” — plagued with high-friction workflows, sky-high costs and convoluted business models.
Over the past several years, a long list of innovative startups and salivating venture investors have pinned their focus on repairing the healthcare industry, but its digital transformation still appears to be in the very early innings. After a record-setting 2018, however, digital health investing continued to reach meteoric heights in 2019.
Mammoth pools of capital have flooded into various sub-verticals and business models, backing collections of new B2B and B2C companies focused on optimizing healthcare workflows, improving healthcare access and offering lower-cost distribution models. Over the past two years, digital health startups have raised well over $10 billion in funding across nearly 1,000 deals, according to data from Pitchbook and Crunchbase.
As we close out another strong year for innovation and venture investing in the sector, we asked nine leading VCs who work at firms spanning early to growth stages to share what’s exciting them most and where they see opportunity in the sector:
- Annie Case, Kleiner Perkins
- Zavain Dar, Lux Capital
- Adam Goulburn, Lux Capital
- Kristin Baker Spohn, CRV
- Raju Rishi, RRE Ventures
- Olivia Lew, General Catalyst
- Bill Liao, SOSV
- Jennifer Hartt, Ben Franklin Technology Partners
- John Prendergass, Ben Franklin Technology Partners
Participants discuss trends in digital therapeutics, telehealth, mental health and the latest in biotech and medical devices, while also diving into startups improving medical practitioner efficiency, evaluating the evolving regulatory environment and debating valuations and offering a ‘temp check’ on the market for digital health startups leveraging ML.
Annie Case, Kleiner Perkins
Although Kleiner Perkins has a long history of investing in iconic health companies, we believe it is still the early innings of digital health as a category today.
When I evaluate new opportunities in the space, I often start by thinking through how the company will move the needle on cost, quality, and access to care — the “iron triangle” of health care systems. Conventional wisdom has been that it’s impossible to improve all three dimensions simultaneously, but we are seeing companies leverage technology to shift this paradigm in meaningful ways.
It’s no longer just a promise. For example, Viz.ai is using artificial intelligence to detect and alert stroke teams to suspected large vessel occlusion strokes, enabling patients to get treatment faster. Their workflows improve access to life-saving care, deliver higher quality through reduced time to treatment (every minute counts as ‘time is brain’ in stroke care), and dramatically reduce the costs associated with long-term disability.
We are also seeing companies provide this type of tech-enabled care outside of the hospital setting. Modern Health is a mental health benefits platform that employers are making available to their employees. The platform triages individual employees to the right level of care, providing clinical care to those with diagnosable depression or anxiety, and making self-guided or preventative care available to everyone else. Their solution improves quality and access by offering mental health services to every employee and reduces the cost associated with untreated mental illness, lost productivity, or employee churn.
Heading into 2020, we’re eager to back digital health companies in new areas that leverage technology to impact cost, quality, and access. A few spaces that I’m excited about are behavioral health (mental health, substance abuse, addiction, etc), care navigation, digital therapeutics, and new models integrating telehealth, remote care and AI to better leverage medical professionals’ time.
Zavain Dar and Adam Goulburn, Lux Capital
Below are some thoughts and coming predictions on health tech broadly:
- Digital therapeutics continue to pick up steam — on the back of Pear and Akili, more companies push to FDA and enter the market. In addition, broader consumer platforms like Calm and Headspace look to broaden their offerings by investigating clinical approvals.
- At least one major pharma looks to expand its consumer surface area by acquiring one of the new digital, consumer-facing generics platform (ex Hims, Ro, NuRx).
- Venture funding for biotech continues to boom with at least three Series A’s of $100M or more in size.
- Drug discovery for neurodegeneration sees a renaissance. High-profile failings of Biogen and the beta-amyloid hypothesis sees a shift of innovation to early-stage biotech and venture creation.
- Big pharma has its DeepMind moment acquiring at least one machine-learning (AI) enabled drug discovery company.
- Clinical trial tech investments heat up; new companies and technologies emerge to make trials patients first and systems get smarter at finding the right patients at their point of care; large incumbents like IQVIA, LabCorp and PPD get acquisitive.
- At least three traditional Sand Hill Road tech venture firms open life science practices or raise dedicated funds.
- Machine learning targets chemistry driven by large advancements in transformer (NLP) models; has the time for computational chemistry finally come?
- HCIT sees a renaissance driven by increased CIO responsibility towards data interoperability. Companies either working on federated ML to allow systems to speak to each other or lightweight edge applications enabling rapid clinical deployment will see quick uptake and traction, until now impossible in HC.
Kristin Baker Spohn, CRV
In the last 10 years, digital health has exploded. Over $16B has been invested in the sector by VCs and we’ve seen IPOs from Livongo, Progyny and Health Catalyst, just in the last year alone. That said, there’s still a lot that mystifies people about the sector — there are spots that are overheated and models that will struggle to deliver venture scale outcomes. I’ve seen digital health evolve first hand as both an operator and investor, and I’m more excited than ever about the future of the space.
A few areas and trends that I’ve been following recently include:
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At-home blood testing startup Baze rakes in $6 million from Nature’s Way
By now, the venture world is wary of blood testing startups offering health data from just a few drops of blood. However, Baze, a Swiss-based personal nutrition startup providing blood tests you can do in the convenience of your own home, collects just a smidgen of your sanguine fluid through an MIT manufactured device, which, according to the company, is in accordance with FDA regulations.
The idea is to find out (via your blood sample) which vitamins you’re missing out on and are keeping you from living your best life. That seems to resonate with folks who don’t want to go into the doctor’s office and separately head to their nearest lab for testing.
Most health professionals would agree it’s important to know if you are getting the right amount of nutrition — Vitamin D deficiency is a worldwide epidemic affecting calcium absorption, hormone regulation, energy levels and muscle weakness. An estimated 74% of the U.S. population does not get the required daily levels of Vitamin D.
“There are definitely widespread deficiencies across the population,” Baze CEO and founder Philipp Schulte tells TechCrunch. “[With the blood test] we see that we can actually close those gaps for the first time ever in the supplement industry.”
While we don’t know exactly how many people have tried out Baze just yet, Schulte says the company has seen 40% month-over-month new subscriber growth.
That has garnered the attention of supplement company Nature’s Way, which has partnered with the company and just added $6 million to the coffers to help Baze ramp up marketing efforts in the U.S.
I had the opportunity to try out the test myself. It’s pretty simple to do. You just open up a little pear-shaped device, pop it on your arm and then press it to engage and get it to start collecting your blood. After it’s done, plop it in the provided medical packaging and ship it off to a Baze-contracted lab.
I will say it is certainly more convenient to just pop on a little device myself — although it might be tricky if you’re at all squeamish, as you’ll see a little bubble where the blood is being sucked from your arm. For anyone who hesitates, it might be easier to just head to a lab and have another human do this for you.
The price is also nice, compared to going to a Quest Diagnostics or LabCorp, which can vary depending on which vitamins you need to test for individually. With Baze it’s just $100 a pop, plus any additional supplements you might want to buy via monthly subscription after you get your results. The first month of supplements is free with your kit.
Baze’s website will show your results within about 12 days (though Schulte tells TechCrunch the company is working on getting your results faster). It does so with a score and then displays a range of various vitamins tested.
I was told that, overall, I was getting the nutrients I require with a score of 74 out of 100. But I’m already pretty good at taking high-quality vitamins. The only thing that really stuck out was my zinc levels, which I was told was way off the charts high after running the test through twice. Though I suspect, as I am not displaying any symptoms of zinc poisoning, this was likely the result of not wiping off my zinc-based sunscreen well enough before the test began.
For those interested in conducting their own at-home test and not afraid to prick themselves in the arm with something that looks like you might have it on hand in the kitchen, you can do so by heading over to Baze and signing up.
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What tech gets right about healthcare
Why is tech still aiming for the healthcare industry? It seems full of endless regulatory hurdles or stories of misguided founders with no knowledge of the space, running headlong into it, only to fall on their faces.
Theranos is a prime example of a founder with zero health background or understanding of the industry — and just look what happened there! The company folded not long after founder Elizabeth Holmes came under criminal investigation and was barred from operating in her own labs for carelessly handling sensitive health data and test results.
But sometimes tech figures it out. It took years for 23andMe to breakthrough FDA regulations — it’s since more than tripled its business and moved into drug discovery.
And then there’s Oscar Health, which first made a mint on Obamacare and has since ventured into Medicare. Combined with Bright, the two health insurance startups have pulled in a whopping $3 billion so far.
It’s easy to shake our fists at fool-hardy founders hoping to cash in on an industry that cannot rely on the old motto “move fast and break things.” But it doesn’t have to be the code tech lives or dies by.
So which startups have the mojo to keep at it and rise to the top? Venture capitalists often get to see a lot before deciding to invest. So we asked a few of our favorite health VC’s to share their insights.
Phin Barnes – First Round Capital
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AlphaSense, a search engine for analysis and business intel, raises $50M led by Innovation Endeavors
Google and its flagship search portal opened the door to the possibilities of how to build a business empire on the back of organising and navigating the world’s information, as found on the internet. Now, a startup that’s built a search engine tailored to the needs of enterprises and their own quests for information has raised a round of funding to see if it can do the same for the B2B world.
AlphaSense, which provides a way for companies to quickly amass market intelligence around specific trends, industries and more to help them make business decisions, has closed a $50 million round of funding, a Series B that it’s planning to use to continue enhancing its product and expanding to more verticals.
The company counts some 1,000 clients on its books, with a heavy emphasis on investment banks and related financial services companies. That’s in part because of how the company got its start: Finnish co-founder and CEO Jaakko (Jack) Kokko had been an analyst at Morgan Stanley in a past life and understood the labor and time pain points of doing market research, and decided to build a platform to help shorten a good part of the information-gathering process.
“My experience as an analyst on Wall Street showed me just how fragmented information really was,” he said in an interview, citing as one example how complex sites like those of the FDA are not easy to navigate to look for new information and updates — the kind of thing that a computer would be much more adept at monitoring and flagging. “Even with the best tools and services, it still was really hard to manually get the work done, in part because of market volatility and the many factors that cause it. We can now do that with orders of magnitude more efficiency. Firms can now gather information in minutes that would have taken an hour. AlphaSense does the work of the best single analyst, or even a team of them.”
(Indeed, the “alpha” of AlphaSense appears to be a reference to finance: it’s a term that refers to the ability of a trader or portfolio manager to beat the typical market return.)
The lead investor in this round is very notable and says something about the company’s ambitions. It’s Innovation Endeavors, the VC firm backed by Eric Schmidt, who had been the CEO of none other than Google (the pace-setter and pioneer of the search-as-business model) for a decade, and then stayed on as chairman and ultimately board member of Google and then Alphabet (its later holding company) until just last June.
Schmidt presided over Google at what you could argue was its most important time, gaining speed and scale and transitioning from an academic idea into a full-fledged, huge public business whose flagship product has now entered the lexicon as a verb and (through search and other services like Android and YouTube) is a mainstay of how the vast majority of the world uses the web today. As such, he is good at spotting opportunities and gaps in the market, and while enterprise-based needs will never be as prominent as those of mass-market consumers, they can be just as lucrative.
“Information is the currency of business today, but data is overwhelming and fragmented, making it difficult for business professionals to find the right insights to drive key business decisions,” he said in a statement. “We were impressed by the way AlphaSense solves this with its AI and search technology, allowing businesses to proceed with the confidence that they have the right information driving their strategy.”
This brings the total raised by AlphaSense to $90 million, with other investors in this round including Soros Fund Management LLC and other unnamed existing investors. Previous backers had included Tom Glocer (the former Reuters CEO who himself is working on his own fintech startup, a security firm called BlueVoyant), the MassChallenge incubator, Tribeca Venture Partners and others. Kokko said AlphaSense is not disclosing its valuation at this point. (I’m guessing though that it’s definitely on the up.)
There have been others that have worked to try to tackle the idea of providing more targeted, and business-focused, search portals, from the likes of Wolfram Alpha (another alpha!) through to Lexis Nexis and others like Bloomberg’s terminals, FactSet, Business Quant and many more.
One interesting aspect of AlphaSense is how it’s both focused on pulling in requests as well as set up to push information to its users based on previous search parameters. Currently these are set up to only provide information, but over time, there is a clear opportunity to build services to let the engines take on some of the actions based on that information, such as adjusting asking prices for sales and other transactions.
“There are all kinds of things we could do,” said Kokko. “This is a massive untapped opportunity. But we’re not taking the human out of the loop, ever. Humans are the right ones to be making final decisions, and we’re just about helping them make those faster.”
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