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Extra Crunch roundup: Security data lakes, China vs. Starlink, ExtraHop’s $900M exit
News broke this morning that Bain Capital Private Equity and Crosspoint Capital Partners are purchasing Seattle-based network security startup ExtraHop.
Part of the Network Detection and Response (NDR) market, ExtraHop’s security solutions are for companies that manage assets in the cloud and on-site, “something that could be useful as more companies find themselves in that in-between state,” report Ron Miller and Alex Wilhelm.
Just one year ago, ExtraHop was closing in on $100 million in ARR and was considering an IPO, so Ron and Alex spoke to ExtraHop CTO and co-founder Jesse Rothstein to learn more about how (and why) the deal came together.
Have a great week, and thanks for reading!
Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist
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Xometry is taking its excess manufacturing capacity business public
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Xometry, a Maryland-based service that connects companies with manufacturers with excess production capacity around the world, filed an S-1 form with the U.S. Securities and Exchange Commission last week announcing its intent to become a public company.
As the global supply chain tightened during the pandemic in 2020, a company that helped find excess manufacturing capacity was likely in high demand.
But growth aside, it’s clear that Xometry is no modern software business, at least from a revenue-quality profile.
It’s time for security teams to embrace security data lakes
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The average corporate security organization spends $18 million annually but is largely ineffective at preventing breaches, IP theft and data loss. Why?
The fragmented approach we’re currently using in the security operations center (SOC) does not work. It’s time to replace the security information and event management (SIEM) approach with security data lakes.
The reduced reliance on the SIEM is well underway, along with many other changes. The SIEM is not going away overnight, but its role is changing rapidly, and it has a new partner in the SOC — the security data lake.
China’s drive to compete against Starlink for the future of orbital internet
Image Credits: STR/China News Service (CNS)/AFP (opens in a new window)/ Getty Images
There has been a wave of businesses over the past several years hoping to offer broadband internet delivered from thousands of satellites in low-Earth orbit (LEO), providing coverage of most of the earth’s surface.
In tandem with the accelerated deployment of SpaceX’s Starlink constellation in 2020, China has rapidly responded in terms of policy, financing and technology. While still in early development, a “Chinese answer to Starlink,” SatNet, and the associated GuoWang are likely to compete in certain markets with Starlink and others while also fulfilling a strategic purpose from a government perspective.
With considerable backing from very high-level actors, we are likely to see the rollout of a Red Star(link) over China (and the rest of the world) over the coming years.
This SPAC is betting that a British healthcare company can shake up the US market
Image Credits: Nigel Sussman (opens in a new window)
Babylon Health, a British health tech company, is pursuing a U.S. listing via a blank-check company, or SPAC.
While we wait for Robinhood’s IPO, The Exchange dove into its fundraising history, its product, its numbers and, bracing ourselves for impact, its projections.
The hidden benefits of adding a CTO to your board
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Conventional wisdom says your board should include a few CEOs who can offer informed advice from an entrepreneur’s perspective, but adding a technical leader to the mix creates real upside, according to Abby Kearns, chief technology officer at Puppet.
Beyond their engineering experience, CTOs can help founders set realistic timelines, help identify pain points and bring what Kearns calls “pragmatic empathy” to high-pressure situations.
They can also be an effective advocate for founder teams who need help explaining why a launch is delayed or new engineering hires are badly needed.
“A CTO understands the nuts and bolts,” says Kearns.
6 career options for ex-founders seeking their next adventure
Image Credits: Marie LaFauci / Getty Images
As someone with “founder” on your resume, you face a greater challenge when trying to get a traditional salaried job.
You’ve already shown that you really want to lead a company, not just rise up the ladder, which means some employers are less likely to hire you.
So what should you do? Especially if your life partner and/or bank account are burnt out on the income volatility of startups?
Here are six options for ex-founders planning their next move.
How bottom-up sales helped Expensify blaze the path for SaaS
Image Credits: Nigel Sussman
In the fifth and final part of Expensify’s EC-1, Anna Heim explores how the company built its business, true to form, in an unexpected way.
“You’d expect an expense management company to have a large sales department and advertise through all kinds of channels to maximize customer acquisition, Anna writes. But “Expensify just doesn’t do what you think it should.
“Keeping in mind this company’s propensity to just stick to its guts, it’s not much of a surprise that it got to more than $100 million in annual recurring revenue and millions of users with a staff of 130, some contractors, and an almost non-existent sales team.”
How is that much growth possible without a sales team? Word of mouth.
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This SPAC is betting that a British healthcare company can shake up the US market
Welcome back to the week, and welcome back to The Exchange. Robinhood has yet to file its IPO, so we’re looking at other companies in the meantime. Today it’s Babylon Health, a British health tech company that is pursuing a U.S. listing via a blank-check company, or SPAC.
You have questions. I have questions. We’ll get to some answers.
But before we do, we wanted to note that Anna and I are looking into the AI startup market tomorrow morning. If you are a VC with notes regarding the current pace of investment into the sector or thoughts on where customer traction is highest, let us know. If you are a founder building an AI-powered startup, we’d also like to hear from you about what you are seeing. Use the subject line “AI startups,” please.
The Exchange explores startups, markets and money.
Read it every morning on Extra Crunch or get The Exchange newsletter every Saturday.
With that out of the way, let’s get into Babylon Health. We’ll kick off with a short riff on its fundraising history, talk about its product, and then dive into its numbers and, bracing ourselves for impact, its projections.
The larger context this morning is that we’re doing legwork ahead of what could be a super active Q3 2021 IPO cycle. Kanzhun, a Chinese company, has also filed for a U.S. listing. Toss in Robinhood whenever it gets off its duff and gives us its own filing, and we’re being promised a good time.
Babylon Health
Per Crunchbase data, Babylon has raised north of $600 million as a private company. Its funding, however, has not come from sources that we tend to discuss here at TechCrunch. Instead, the company raised some money from more traditional investors like Hoxton Ventures and Kinnevik, but the bulk of its capital was raised from the Saudi Arabian “Public Investment Fund,” or PIF. The PIF led a $550 million round into the British health tech company back in August 2019.
PitchBook has the round cut into two parts, the larger, first portion of which valued the company at $1.9 billion on a post-money basis.
That figure brings us to the SPAC deal that Babylon is now pursuing. The company’s new equity value after its SPAC deal will land around $4.2 billion, with Babylon sitting on around $540 million in cash after the deal is completed. The company will sport a lower, $3.6 billion enterprise valuation after its merger with SPAC Alkuri.
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Mendel raises $18M to tease out data structure from medicine’s disparate document trove
The medical industry is sitting on a huge trove of data, but in many cases it can be a challenge to realize the value of it because that data is unstructured and in disparate places.
Today, a startup called Mendel, which has built an AI platform both to ingest and bring order to that body of information, is announcing $18 million in funding to continue its growth and to build out what it describes as a “clinical data marketplace” for people not just to organize, but also to share and exchange that data for research purposes. It’s also going to be using the funding to hire more talent — technical and support — for its two offices, in San Jose, California and Cairo, Egypt.
The Series A round is being led by DCM, with OliveTree, Zola Global, and MTVLP, and previous backers Launch Capital, SOSV, Bootstrap Labs and chairman of UCSF Health Hub Mark Goldstein also participating.
The funding comes on the heels of what Mendel says is a surge of interest among research and pharmaceutical companies in sourcing better data to gain a better understanding of longer-term patient care and progress, in particular across wider groups of users, not just at a time when it has been more challenging to observe people and run trials, but in light of the understanding that using AI to leverage much bigger data sets can produce better insights.
This can be important, for example, in proactively identifying symptoms of particular ailments or the pathology of a disease, but also recurring and more typical responses to specific treatment courses.
We previously wrote about Mendel back in 2017 when the company had received a seed round of $2 million to better match cancer patients with the various clinical trials that are regularly being run: the idea was that certain trials address specific types of cancers and types of patients, and those who are willing to try newer approaches will be better or worse suited to each of these.
It turned out, however, that Mendel discovered a problem in the data that it would have needed to enable its matching algorithms to work, said Dr. Karim Galil, Mendel’s CEO and founder.
“As we were trying to build the trial business, we discovered a more basic problem that hadn’t been solved,” he said in an interview. “It was the reading and understanding medical records of a patient. If you can’t do that you can’t do trial matching.”
So the startup decided to become an R&D shop for at least three years to solve that problem before doing anything with trials, he continued.
Although there are today many AI companies that are parsing unstructured information in order to extract better insights, Mendel is what you might think of as part of the guard of tech companies that are building out specific AI knowledge bases for distinct verticals or areas of expertise. (Another example from another vertical is Eigen, working in the legal and finance industries, while Google’s DeepMind is another major AI player looking at ways of better harnessing data in the sphere of medicine.)
The issue of “reading” natural language is more nuanced than you might think in the world of medicine. Galil compared it to the phrase “I’m going to leave you” in English, which could just as easily mean someone is departing, say, a room, as someone is walking out of a relationship. The “true” answer — and as we humans know even truth can be elusive — can only start to be found in the context.
The same goes for doctors and their observation notes, Galil said. “There is a lot hidden between the lines, and problems can be specific to a person,” or to a situation.
That has proven to be a lucrative area to tackle.
Mendel uses a mix of computer vision and natural language processing built by teams with extensive experience in both clinical environments and in building AI algorithms and currently provides tools to automate clinical data abstraction, OCR, special tools to redact and remove personal identifiable information automatically to share records, search engines to search clinical data and — yes — an engine to enable better matching of people to clinical trials. Customers include pharmaceutical and life science companies, real-world data and real-world evidence (RWD and RWE) providers and research groups.
And to underscore just how much there is still left to do in the world of medicine, along with this funding round, Mendel is announcing a partnership with eFax, an online faxing solution used by a huge number of healthcare providers.
Faxing is totally antiquated in some parts of the world now — I’m not even sure that people the age of my children (tweens) even know what a “fax” is — but they remain one of the most-used ways to transfer documents and information between people in the worlds of healthcare and medicine, with 90% of the industry using them today. The partnership with Mendel will mean that those eFaxes will now be “read” and digitized and ingested into wider platforms to tap that data in a more useful way.
“There is huge potential for the global healthcare industry to leverage AI,” said Mendel board member and partner at DCM, Kyle Lui, in a statement. “Mendel has created a unique and seamless solution for healthcare organizations to automatically make sense of their clinical data using AI. We look forward to continuing to work with the team on this next stage of growth.”
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Hormonal health is a massive opportunity: Where are the unicorns?
Gaslighting is a form of psychological abuse, but Elizabeth Ruzzo says she experienced it firsthand after telling a doctor that she suffered from suicidal ideation after taking birth control pills.
Hormonal health sits at the center of conversations around personalized medicine and women’s health: By 2025, women’s health could be a $50 billion industry, and by 2026, digital health more broadly is estimated to hit $221 billion.
Ruzzo’s doctor told her there was no connection between birth control and self-harm, but she decided to stop taking the pill to see if her mental health improved. When it did, Ruzzo grasped the disconnect between women’s unique hormonal makeup and blanket-statement practices from medicine today.
Her realization led her to found Adyn Health, a startup that proactively helps women make health decisions that complement their hormonal state and background. The company started with, of course, helping people pick more personalized birth control.
Ruzzo is part of a group of growing entrepreneurs who are betting that hormonal health is the key wedge into the digital health boom. Hormones are fluctuating, ever-evolving and diverse — but these founders say they’re also key to solving many health conditions that disproportionately impact women, from diabetes to infertility to mental health challenges.
Many believe it’s that complexity that underscores the opportunity. Hormonal health sits at the center of conversations around personalized medicine and women’s health: By 2025, women’s health could be a $50 billion industry, and by 2026, digital health more broadly is estimated to hit $221 billion.
Still, as funding for women’s health startups drops and stigma continues to impact where venture dollars go, it’s unclear whether the sector will remain in its infancy or hit a true inflection point.
The future is proactive
Ruzzo views Adyn as a precision medicine startup. Its main product is an at-home test that tracks hormone levels, assesses genetic risk for specific side effects, and then gives recommendations for which birth control methods best suits the customer with the fewest side effects.
By Ruzzo’s estimates, 98% of sexually active women use birth control for 30 years of their life. That sort of lifetime value proposition made the company look like a sweet deal to founders, and Adyn raised a $2.5 million seed in April 2021 in a round co-led by Lux Capital and M13.
The moonshot, though, is using that as a way to become a trusted partner in a woman’s life, helping understand baseline hormone levels throughout those 30 years.
“My hope is that we can use precision medicine approaches, including looking at genetic markers to identify reliable diagnostic criteria, that can remove that uncertainty and pain and diagnostic odyssey that people have to go through,” Ruzzo said.
If Adyn becomes a trusted partner with teenage women, it could reach a point where it can detect changes in hormone levels over time.
“The hormone reference ranges that are used [in labs] are too broad to be personalized, let alone prescriptive,” she said. “And so what we’re hoping to do is correct for things that we know affect hormone levels like age, weight, ethnicity and compare you to your own expectations.”
If the first wave of digital health was a company like Ro, which answers consumers when they have a condition such as erectile dysfunction or hair loss, the second wave will look more like Adyn, which helps consumers navigate their health before getting diagnosed with a condition or experiencing issues.
The industry standard is still to wait for consumers to realize they have a condition, and then go to the doctor to manage their symptoms or look for a cure. A new startup that recently graduated from Y Combinator is finding its way into hormonal health through that angle.
One-tenth of all women are impacted by a hormonal condition
Veera Health is a startup that wants to help women in India manage polycystic ovary syndrome, or PCOS. The hormonal condition can cause irregular periods, infertility or gestational diabetes in women, as well as acne, weight gain and excessive hair growth. Plus, PCOS is far from rare, impacting one in 10 women.
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Singapore-based D2C dental brand Zenyum raises $40M Series B from L Catterton, Sequoia India and other investors
Zenyum, a startup that wants to make cosmetic dentistry more affordable, announced today it has raised a $40 million Series B. This includes $25 million from L Catterton, a private equity firm focused on consumer brands. The round’s other participants were Sequoia Capital India (Zenyum is an alum of its Surge accelerator program), RTP Global, Partech, TNB Aura, Seeds Capital and FEBE Ventures. L Catteron Asia’s head of growth investments, Anjana Sasidharan, will join Zenyum’s board.
This brings Zenyum’s total raised so far to $56 million, including a $13.6 million Series A announced in November 2019. In a press statement, Sasidharan said, “Zenyum’s differentiated business model gives it a strong competitive advantage, and we are excited to partner with the founder management team to help them realize their growth ambitions.” Other dental-related investments in L Catteron’s portfolio include Ideal Image, ClearChoice, dentalcorp, OdontoCompany, Espaçolaser and 98point6.
Founded in 2018, the company’s products now include ZenyumSonic electric toothbrushes; Zenyum Clear, or transparent 3D-printed aligners; and ZenyumClear Plus for more complex teeth realignment cases.
Founder and chief executive officer Julian Artopé told TechCrunch that ZenyumClear aligners can be up to 70% cheaper than other braces, including traditional metal braces, lingual braces and other clear aligners like Invisalign, depending on the condition of a patients’ teeth and what they want to achieve. Zenyum Clear costs $2,400 SGD (about $1,816 USD), while ZenyumClear Plus ranges from $3,300 to $3,900 SGD (about $2,497 to $2,951 USD).
The company is able to reduce the cost of its invisible braces by combining a network of dental partners with a technology stack that allows providers to monitor patients’ progress while reducing the number of clinic visits they need to make.
First, potential customers send a photo of their teeth to Zenyum to determine if ZenyumClear or ZenyumClear Plus will work for them. If so, they have an in-person consultation with a dentists, including an X-ray and 3D scan. This costs between $120 to $170 SGD, which is paid to the clinic. After their invisible braces are ready, the patient returns to the dentist for a fitting. Then dentists can monitor the progress of their patient’s teeth through Zenyum’s app, only asking them to make another in-person visit if necessary.
ZenyumClear is currently available in Singapore, Malaysia, Indonesia, Hong Kong, Macau, Vietnam, Thailand and Taiwan, with more markets planned.
Sequoia India principal Pieter Kemps told TechCrunch, “There are 300M customers in Zenyum’s core markets—Southeast Asia, Hong Kong, Taiwan—who have increased disposable income for beauty. We believe spend on invisible braces will grow significantly from the current penetration, but what it requires is strong execution on a complex product to become the preferred choice for consumers. That is where Zenyum shines: excellent execution, leading to new products, best-in-class NPS, fast growth, and strong economics. This Series B is a testament to that, and of the belief in the large opportunity down the road.”
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Doximity’s S-1 may explain why healthcare exits are heating up
There was a time when this column was more than a never-ending run of IPO coverage. Then the unicorn liquidity cycle kicked off and it’s been a long run of public offerings ever since. This morning is no exception.
Doximity filed to go public earlier today. You likely haven’t heard of the company because it exists in the modestly obscure world of telehealth. But it’s a venture-backed startup all the same that raised more than $80 million from investors like Emergence, InterWest Partners, Morgenthaler Ventures and Threshold, according to Crunchbase data.
Notably, Doximity has not fundraised since 2014, a year in which it attracted just under $82 million at a valuation of $355 million, per PitchBook data. How has it managed to not raise for so long? By generating lots of cash and profit over the years. Health tech communications, it turns out, can be a lucrative endeavor.
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Doximity is a social network that allows doctors to speak to each other while complying with HIPAA, a federal law that promotes medical privacy. The network, originally defined as a LinkedIn for medical professionals, gives doctors a Rolodex for specialists, a newsfeed for healthcare updates, a communication tool to talk to patients and a job search tool.
In 2017, Doximity claimed that it reached 70% of all U.S. doctors, more than 800,000 licensed professionals.
This is CEO Jeff Tangney’s second time bringing a health tech company public after his previous medical software startup, Epocrates, debuted in 2011.
Let’s chat briefly about the larger health tech exit market and then dig into Doximity’s IPO filing and get our heads around how the company managed to avoid private-market dilution for seven years — and what the company may be worth.
Health tech exits
The global digital health market is estimated to hit $221 billion by 2026, underscoring how large an opportunity the sector may present to venture capitalists. But investors aren’t merely just paying attention to estimates; they are seeing a number of exits in digital health (read: liquidity) that are warming up their checkbooks.
CB Insights estimates that there were 79 healthcare IPOs and M&A transactions in Q1 2021 alone, a 60% increase from the quarter prior. Another report says that there were 145 acquisitions of digital health companies in 2020, up from a solid 113 in 2019.
While still growing, it’s fair to say that those figures describe a healthy exit environment.
The list of deals in the market is straight fire. Earlier this year, Everlywell, founded in 2015, acquired two healthcare companies to expand its digital health service and distribution. Last week, Modern Fertility was bought by Ro for north of $225 million in a majority-equity deal. Before you start complaining that it’s not an IPO, consider this: A less than four-year-old company just got bought for a quarter of a billion dollars by another company that is less than four years old.
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Future Family raises $9M to make fertility treatments more accessible and expand its clinic network
Future Family, a company we’ve written about a few times over the years, makes fertility treatments more accessible. They pre-negotiate terms with fertility clinics to ensure there are no surprise fees, convert the often substantial upfront costs into a monthly payment plan and give each user a dedicated Fertility Coach to help them navigate their journey.
This morning the company is announcing that it has raised a $9 million round of funding as it expands the network of clinics it works with.
The company last raised $10 million in a Series A back in 2018, and they’re positioning this round as an extension of that — a “Series A-1”, as they’re calling it — rather than a whole new round.
As I’ve written before, Future Family was inspired by founder Claire Tomkins’ own experiences:
Future Family was born out of Claire Tomkins’ own experiences with the complexities and costs of fertility treatments. After spending hundreds of thousands of dollars on treatments involved with having her first child (with much of the cost coming as a surprise only revealed once the process had begun), Claire set out to build a better way. Future Family partners with clinics to work out all the pricing ahead of time and pays the bill upfront, ensuring there are no billing surprises down the road.
Image Credits: Claire Tomkins, Future FamilyClaire tells me that, as it did for just about everyone, 2020 brought a whole new set of challenges for the company. In the early days of the pandemic, as a million questions about COVID-19 emerged, many fertility clinics closed their doors. And even as the clinics began reopening, with little certainty about where things might be in nine months, many patients understandably held off.
“It was definitely a tough year,” she says, “but I think we’re emerging in a good place.”
2021 is already looking like a different story, Claire tells me. “People had to sit on the sidelines,” she says. “People who have wanted to go forward with treatment, and now have waited 12 or more months… it’s gotten very busy.” According to their numbers, Claire expects the second half of 2021 to hit “record levels of activity.”
To help with the sudden spike in demand, the company is adding more fertility clinics to its network, including CCRM — a fertility group with locations in Minneapolis, Houston, Denver, San Francisco and a number of other major metros.
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Mental health app Wysa raises $5.5M for ’emotionally intelligent’ AI
It’s hard enough to talk about your feelings to a person; Jo Aggarwal, the founder and CEO of Wysa, is hoping you’ll find it easier to confide in a robot. Or, put more specifically, “emotionally intelligent” artificial intelligence.
Wysa is an AI-powered mental health app designed by Touchkin eServices, Aggarwal’s company that currently maintains headquarters in Bangalore, Boston and London. Wysa is something like a chatbot that can respond with words of affirmation, or guide a user through one of 150 different therapeutic techniques.
Wysa is Aggarwal’s second venture. The first was an elder care company that failed to find market fit, she says. Aggarwal found herself falling into a deep depression, from which, she says, the idea of Wysa was born in 2016.
In March, Wysa became one of 17 apps in the Google Assistant Investment Program, and in May, closed a Series A funding round of $5.5 million led by Boston’s W Health Ventures, the Google Assistant Investment Program, pi Ventures and Kae Capital.
Wysa has raised a total of $9 million in funding, says Aggarwal, and the company has 60 full-time employees and about three million users.
The ultimate goal, she says, is not to diagnose mental health conditions. Wysa is largely aimed at people who just want to vent. Most Wysa users are there to improve their sleep, anxiety or relationships, she says.
“Out of the 3 million people that use Wysa, we find that only about 10% actually need a medical diagnosis,” says Aggarwal. If a user’s conversations with Wysa equate with high scores on traditional depression questionnaires like the PHQ-9 or the anxiety disorder questionnaire GAD-7, Wysa will suggest talking to a human therapist.
Naturally, you don’t need to have a clinical mental health diagnosis to benefit from therapy.
Wysa isn’t intended to be a replacement, says Aggarwal (whether users view it as a replacement remains to be seen), but an additional tool that a user can interact with on a daily basis.
“Sixty percent of the people who come and talk to Wysa need to feel heard and validated, but if they’re given techniques of self help, they can actually work on it themselves and feel better,” Aggarwal continues.
Wysa’s approach has been refined through conversations with users and through input from therapists, says Aggarwal.
For instance, while having a conversation with a user, Wysa will first categorize their statements and then assign a type of therapy, like cognitive behavioral therapy or acceptance and commitment therapy, based on those responses. It would then select a line of questioning or therapeutic technique written ahead of time by a therapist and begin to converse with the user.
Wysa, says Aggarwal, has been gleaning its own insights from more than 100 million conversations that have unfolded this way.
“Take for instance a situation where you’re angry at somebody else. Originally our therapists would come up with a technique called the empty chair technique where you’re trying to look at it from the other person’s perspective. We found that when a person felt powerless or there were trust issues, like teens and parents, the techniques the therapists were giving weren’t actually working,” she says.
“There are 10,000 people facing trust issues who are actually refusing to do the empty chair exercise. So we have to find another way of helping them. These insights have built Wysa.”
Although Wysa has been refined in the field, research institutions have played a role in Wysa’s ongoing development. Pediatricians at the University of Cincinnati helped develop a module specifically targeted toward COVID-19 anxiety. There are also ongoing studies of Wysa’s ability to help people cope with mental health consequences from chronic pain, arthritis and diabetes at The Washington University in St. Louis and The University of New Brunswick.
Still, Wysa has had several tests in the real world. In 2020, the government of Singapore licensed Wysa, and provided the service for free to help cope with the emotional fallout of the coronavirus pandemic. Wysa is also offered through the health insurance company Aetna as a supplement to Aetna’s Employee Assistance Program.
The biggest concern about mental health apps, naturally, is that they might accidentally trigger an incident, or mistake signs of self harm. To address this, the U.K.’s National Health Service (NHS) offers specific compliance standards. Wysa is compliant with the NHS’ DCB0129 standard for clinical safety, the first AI-based mental health app to earn the distinction.
To meet those guidelines, Wysa appointed a clinical safety officer, and was required to create “escalation paths” for people who show signs of self harm.
Wysa, says Aggarwal, is also designed to flag responses to self-harm, abuse, suicidal thoughts or trauma. If a user’s responses fall into those categories Wysa will prompt the user to call a crisis line.
In the U.S., the Wysa app that anyone can download, says Aggarwal, fits the FDA’s definition of a general wellness app or a “low risk device.” That’s relevant because, during the pandemic, the FDA has created guidance to accelerate distribution of these apps.
Still, Wysa may not perfectly categorize each person’s response. A 2018 BBC investigation, for instance, noted that the app didn’t appear to appreciate the severity of a proposed underage sexual encounter. Wysa responded by updating the app to handle more instances of coercive sex.
Aggarwal also notes that Wysa contains a manual list of sentences, often containing slang, that they know the AI won’t catch or accurately categorize as harmful on its own. Those are manually updated to ensure that Wysa responds appropriately. “Our rule is that [the response] can be 80%, appropriate, but 0% triggering,” she says.
In the immediate future, Aggarwal says the goal is to become a full-stack service. Rather than having to refer patients who do receive a diagnosis to Employee Assistant Programs (as the Aetna partnership might) or outside therapists, Wysa aims to build out its own network of mental health suppliers.
On the tech side they’re planning expansion into Spanish, and will start investigating a voice-based system based on guidance from the Google Assistant Investment Fund.
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Telemedicine startups are positioning themselves for a post-pandemic world
Telemedicine, in its original form of the phone call, has been around for decades. For people in remote or rural areas without easy access to in-person care, consulting a doctor over the phone has often been the go-to approach. But for a large swath of the world used to taking half a day off work just for a 15-30 minute doctor’s appointment, it may seem like telemedicine was invented only last year. That’s mostly because it wasn’t until 2020 that telemedicine, in its myriad forms, debuted into the mainstream consciousness.
It’s impossible to predict how healthcare institutions will operate post-pandemic, but with so many people now accustomed to telemedicine, startups that provide services around virtual care continue to be poised for success.
Telemedicine has faced an uphill battle to become more relevant in the U.S., with challenges such as meeting HIPPA compliance requirements and insurance companies unwilling to pay for virtual visits. But when COVID-19 began raging across the globe and people had to stay home, both the insurance and healthcare industries were forced to adapt.
“It’s been said that there are decades where nothing happens, and then there are weeks when decades happen,” said StartUp Health co-founders Steven Krein and Unity Stoakes in the company’s 2020 year-end report. That statement couldn’t be truer for telemedicine: Around $3.1 billion in funding flowed into the sector in 2020 — about three times what we saw in 2019, according to the report. A health tech fund and insights company, StartUp Health counts Alphabet, Sequoia and Andreessen Horowitz as some of its co-investors.
Now that people see the benefits and conveniences of “dialing a doc” from the kitchen table, healthcare has changed forever. It’s impossible to predict how healthcare institutions will operate post-pandemic, but with so many people now accustomed to telemedicine, startups that provide services around virtual care continue to be poised for success.
The state of telemedicine
Major players in the field now look at the state of healthcare as, “before COVID and after COVID,” Stoakes told Extra Crunch. “In the post-pandemic world, there’s a significant transformation that’s occurred,” he said. “It’s all accelerated; the customers have shown up. There’s more capital than ever and consumers and physicians have adapted quickly,” he added.
In the U.S., healthcare is first and foremost a business, so while there are treatment approaches that have long been proven to improve patient outcomes, if they didn’t make sense financially, they weren’t instituted at scale. Telemedicine is a great example of this.
A 2017 study by the American Journal of Accountable Care showed that telemedicine can be quite useful for managing healthcare. “The use of telemedicine has been shown to allow for better long-term care management and patient satisfaction; it also offers a new means to locate health information and communicate with practitioners (e.g., via e-mail and interactive chats or video conferences), thereby increasing convenience for the patient and reducing the amount of potential travel required for both physician and patient,” the study reads.
But as we’ve seen, it took a global healthcare emergency to drive widespread adoption of virtual healthcare in the U.S. Now that investors recognize the potential, they are increasingly pouring money into startups that promise to take telemedicine to the next level. Some of the investors backing these newer companies include StartUp Health, Andreessen Horowitz, Sequoia, Alphabet, Kaiser Permanente Ventures, U.S. Venture Partners, Maveron, First Round Capital, DreamIt Ventures, Human Ventures and Tusk Venture Partners.
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Artificial raises $21M led by Microsoft’s M12 for a lab automation platform aimed at life sciences R&D
Automation is extending into every aspect of how organizations get work done, and today comes news of a startup that is building tools for one industry in particular: life sciences. Artificial, which has built a software platform for laboratories to assist with, or in some cases fully automate, research and development work, has raised $21.5 million.
It plans to use the funding to continue building out its software and its capabilities, to hire more people, and for business development, according to Artificial’s CEO and co-founder David Fuller. The company already has a number of customers including Thermo Fisher and Beam Therapeutics using its software directly and in partnership for their own customers. Sold as aLab Suite, Artificial’s technology can both orchestrate and manage robotic machines that labs might be using to handle some work; and help assist scientists when they are carrying out the work themselves.
“The basic premise of what we’re trying to do is accelerate the rate of discovery in labs,” Fuller said in an interview. He believes the process of bringing in more AI into labs to improve how they work is long overdue. “We need to have a digital revolution to change the way that labs have been operating for the last 20 years.”
The Series A is being led by Microsoft’s venture fund M12 — a financial and strategic investor — with Playground Global and AME Cloud Ventures also participating. Playground Global, the VC firm co-founded by ex-Google exec and Android co-creator Andy Rubin (who is no longer with the firm), has been focusing on robotics and life sciences and it led Artificial’s first and only other round. Artificial is not disclosing its valuation with this round.
Fuller hails from a background in robotics, specifically industrial robots and automation. Before founding Artificial in 2019, he was at Kuka, the German robotics maker, for a number of years, culminating in the role of CTO; prior to that, Fuller spent 20 years at National Instruments, the instrumentation, test equipment and industrial software giant. Meanwhile, Artificial’s co-founder, Nikhita Singh, has insight into how to bring the advances of robotics into environments that are quite analogue in culture. She previously worked on human-robot interaction research at the MIT Media Lab, and before that spent years at Palantir and working on robotics at Berkeley.
As Fuller describes it, he saw an interesting gap (and opportunity) in the market to apply automation, which he had seen help advance work in industrial settings, to the world of life sciences, both to help scientists track what they are doing better, and help them carry out some of the more repetitive work that they have to do day in, day out.
This gap is perhaps more in the spotlight today than ever before, given the fact that we are in the middle of a global health pandemic. This has hindered a lot of labs from being able to operate full in-person teams, and increased the reliance on systems that can crunch numbers and carry out work without as many people present. And, of course, the need for that work (whether it’s related directly to Covid-19 or not) has perhaps never appeared as urgent as it does right now.
There have been a lot of advances in robotics — specifically around hardware like robotic arms — to manage some of the precision needed to carry out some work, but up to now no real efforts made at building platforms to bring all of the work done by that hardware together (or in the words of automation specialists, “orchestrate” that work and data); nor link up the data from those robot-led efforts, with the work that human scientists still carry out. Artificial estimates that some $10 billion is spent annually on lab informatics and automation software, yet data models to unify that work, and platforms to reach across it all, remain absent. That has, in effect, served as a barrier to labs modernising as much as they could.
A lab, as he describes it, is essentially composed of high-end instrumentation for analytics, alongside then robotic systems for liquid handling. “You can really think of a lab, frankly, as a kitchen,” he said, “and the primary operation in that lab is mixing liquids.”
But it is also not unlike a factory, too. As those liquids are mixed, a robotic system typically moves around pipettes, liquids, in and out of plates and mixes. “There’s a key aspect of material flow through the lab, and the material flow part of it is much more like classic robotics,” he said. In other words, there is, as he says, “a combination of bespoke scientific equipment that includes automation, and then classic material flow, which is much more standard robotics,” and is what makes the lab ripe as an applied environment for automation software.
To note: the idea is not to remove humans altogether, but to provide assistance so that they can do their jobs better. He points out that even the automotive industry, which has been automated for 50 years, still has about 6% of all work done by humans. If that is a watermark, it sounds like there is a lot of movement left in labs: Fuller estimates that some 60% of all work in the lab is done by humans. And part of the reason for that is simply because it’s just too complex to replace scientists — who he described as “artists” — altogether (for now at least).
“Our solution augments the human activity and automates the standard activity,” he said. “We view that as a central thesis that differentiates us from classic automation.”
There have been a number of other startups emerging that are applying some of the learnings of artificial intelligence and big data analytics for enterprises to the world of science. They include the likes of Turing, which is applying this to helping automate lab work for CPG companies; and Paige, which is focusing on AI to help better understand cancer and other pathology.
The Microsoft connection is one that could well play out in how Artificial’s platform develops going forward, not just in how data is perhaps handled in the cloud, but also on the ground, specifically with augmented reality.
“We see massive technical synergy,” Fuller said. “When you are in a lab you already have to wear glasses… and we think this has the earmarks of a long-term use case.”
Fuller mentioned that one area it’s looking at would involve equipping scientists and other technicians with Microsoft’s HoloLens to help direct them around the labs, and to make sure people are carrying out work consistently by comparing what is happening in the physical world to a “digital twin” of a lab containing data about supplies, where they are located, and what needs to happen next.
It’s this and all of the other areas that have yet to be brought into our very AI-led enterprise future that interested Microsoft.
“Biology labs today are light- to semi-automated—the same state they were in when I started my academic research and biopharmaceutical career over 20 years ago. Most labs operate more like test kitchens rather than factories,” said Dr. Kouki Harasaki, an investor at M12, in a statement. “Artificial’s aLab Suite is especially exciting to us because it is uniquely positioned to automate the masses: it’s accessible, low code, easy to use, highly configurable, and interoperable with common lab hardware and software. Most importantly, it enables Biopharma and SynBio labs to achieve the crowning glory of workflow automation: flexibility at scale.”
Harasaki is joining Peter Barratt, a founder and general partner at Playground Global, on Artificial’s board with this round.
“It’s become even more clear as we continue to battle the pandemic that we need to take a scalable, reproducible approach to running our labs, rather than the artisanal, error-prone methods we employ today,” Barrett said in a statement. “The aLab Suite that Artificial has pioneered will allow us to accelerate the breakthrough treatments of tomorrow and ensure our best and brightest scientists are working on challenging problems, not manual labor.”
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