Promising Startups in the Post-COVID World of Digital Health
In the post-COVID world, investing in digital health has become a bit more challenging. While deal activity in healthcare IT remained relatively flat in Q1 2024, there are still promising startups that have caught the attention of investors. TechCrunch spoke with several healthcare VCs to uncover the companies they believe have a bright future. Among the recommendations, AI-driven startups that are tackling administrative challenges in the healthcare system stood out, along with a few non-AI-focused businesses.
Abridge, founded in 2018 by Shiv Rao, is an early entrant into the medical note-taking space. Using AI, Abridge automates medical records based on conversations between doctors and patients. The Pittsburgh-based startup has generated excitement among investors and hospital systems, as it aims to free up physicians’ time spent on note-taking. Abridge was mentioned the most among investors, indicating its leadership in its category. Competitors in the AI-powered medical note-taking market include Ambience, Nabla, Microsoft-owned Nuance, and Suki. Abridge has raised significant funding, including a $150 million Series C and a $30 million Series B.
CodaMetrix, founded in 2019, uses AI to automate medical coding. The company’s technology translates medical notes into diagnostic codes, reducing errors and administrative burdens. Medical coding is a tedious and error-prone task that can lead to insurance rejections and other problems if done incorrectly. CodaMetrix has one of the largest annotated coding datasets, giving it an edge over competitors like Fathom Health. The company recently raised $40 million in a Series B round.
Cohere Health expedites the health insurance approval process using AI. Prior authorization management can be time-consuming for medical and administrative staff, but Cohere Health’s AI can reduce the time it takes from hours to minutes. While Cohere is currently the leader in this space, other startups like Anterior and Alaffia Health are also working on expediting health insurance approvals. Cohere Health raised $50 million in a Series B round earlier this year.
Grow Therapy, founded in 2020, connects therapists who want to start independent practices with patients and insurers. The startup offers mental health professionals tools for filing claims, receiving payments, and being matched with patients. Grow Therapy’s business-in-a-box model provides therapists with more flexibility compared to other marketplaces. The company recently closed an $88 million Series C round.
Equip provides online treatment for eating disorders, addressing the underserved population in this area. About 10% of the U.S. population develops an eating disorder, but only a fraction receive help. Equip’s offering brings care to those who don’t have access to an eating disorder facility or prefer online treatment. The company has secured $135 million in funding and was last valued at $505 million.
Maven is a New York-based health clinic and benefits platform that offers services for fertility, adoption, parenting, pediatrics, and menopause. The company serves women and families, a historically underserved area in digital health services. Maven has raised nearly $300 million in funding and was last valued at $1.35 billion.
Memora Health offers virtual AI-based care coordination, reducing administrative burdens for medical staff. The company’s technology uses text messages to communicate with patients, automating tasks like appointment reminders and collecting data about symptoms and recovery. Memora Health has raised nearly $80 million and was valued at $430 million.
SmarterDx uses AI to help hospitals maximize revenues by analyzing patients’ lab results and doctors’ notes for errors and omissions in diagnoses and medical codes. The company’s technology reviews patient charts for accuracy before submitting claims to health insurance or Medicare. SmarterDx recently raised $50 million in a Series B round.
Summer Health connects parents to pediatricians through a text messaging service, providing fast responses to urgent care and behavioral concerns. The startup reduces parents’ concerns by offering immediate access to healthcare professionals. Summer Health raised $12 million in a Series A round.
Transcarent helps large companies save money on providing health insurance to employees. The startup offers discounted medications, telehealth services, and personalized AI-generated answers about health coverage. With the founder’s previous success in Livongo, Transcarent has gained traction in the market. The company recently raised $450 million in a Series D round.
Despite the challenges of investing in digital health post-COVID, these promising startups are making significant strides in improving healthcare delivery, reducing administrative burdens, and addressing underserved areas. With the support of investors, these companies have the potential to shape the future of healthcare.