Category: Startups

Sword Health Lands $130M, Unveils Phoenix AI

Posted on by Jason Barry

Sword Health is officially on a hot streak, and it’s only going to keep turning up the heat with $130 million in fresh funding and a new AI care specialist named Phoenix.

At a time when many startups are taking down rounds – at lower valuations – to secure more capital, Sword just did a mic drop round. It’s valuation spiked 50% to a cool $3 billion.

  • Sword expects to be profitable before the end of the year, and said it didn’t need any financial help to get there.
  • Besides the valuation refresh, Sword also wanted to give its employees some long-awaited liquidity. That’s why $100 million of the funding was secondary (shares from employees) and the other $30 million is reportedly locked away “generating nice interest.”

Founded in 2014, Sword pairs motion tracking technology with in-house clinicians to deliver virtual physical therapy programs for muscle and joint issues. 

  • Employers and health plans have flocked to digital musculoskeletal solutions to help members manage pain from home while avoiding opioids and costly surgeries, attracting competition from both well-funded giants (Hinge, Omada) and agile startups (Kaia, Vori).

Sword’s next chapter will focus on finishing the pre-IPO puzzle, and it just locked in one of the most important pieces: Phoenix, an AI care specialist that chats with patients during sessions to assess how they’re feeling and provide real-time feedback.

  • As patients move through the exercises, Phoenix factors in medical history and verbal feedback to deliver optimal sessions within the human clinician’s pre-set parameters.
  • It then summarizes the performance data to identify trends and surface actionable insights, making it easier for clinicians to optimize patient progress.

The icing on the cake? The Peterson Health Technology Institute highlighted Sword in an impeccably timed report on the clinical advantages of virtual MSK solutions as an effective alternative to in-person care – a glowing review compared to their harsh critique of digital diabetes programs.

The Takeaway

It sends a clear signal when a company raises nine figures just to flaunt its valuation and show its employees some love. Sword is in peak form as it gears up for an initial public offering, and it sounds like we could see a move as early as 2025 if the IPO market continues to rise from the ashes.

Atropos Series B Bridges Evidence Gaps

Posted on by Jason Barry

It’s a bad day to be an evidence gap, with Atropos Health closing $33M in Series B funding to transmute real-world data into real-world evidence.

Atropos accomplishes this alchemy by quickly producing retroactive observational studies using an evidence platform of 200M+ patient records, as well as a partner network packed with big names like Mayo Clinic and Clarify.

  • These publication-grade “Prognostograms” are used by both providers (e.g. to answer clinical questions using individually tailored RWE) and life science orgs (e.g. to emulate clinical trials that otherwise would have taken a lot longer).
  • Forbes has a solid write-up of the secret sauce on the backend – plus a nice Greek mythology lesson on the three fates whose scissors can either end or extend the lives of mortals, one of which is named Atropos.

The fresh funding will fuel a trio of initiatives centered around new ways to democratize access to RWE, which naturally includes a healthy dose of generative AI.

  • Atropos plans to “further its stake” in value-based care by continuing to invest in tailored evidence to guide clinical decisions (see its recent partnership with Arcadia), notable given that “the low hanging fruit” of VBC is mostly gone and providers are now looking for more support with complicated patients to succeed in risk-based contracts.
  • The Atropos Evidence Network is pushing into oncology and specialty care through new partnerships with McKesson and Cencora (formerly AmerisourceBergen), and Atropos intends to “double down” on life sciences collaborations after finding traction with everything from R&D to commercial use cases.
  • The full launch of ChatRWD is now slated for this summer, which is an LLM-independent framework built to eliminate hallucination risk while slashing the time needed to produce reports using a chat-based interface. A pending publication will back the great branding with some actual data in the coming months.

The Takeaway

Healthcare doesn’t have any problem generating data, but it’s proven to be a massive challenge to turn these troves of data into actionable evidence. Bridging that gap isn’t exactly a small undertaking, but Atropos now has $33M to make it happen.

Providence Spins Out Praia Health After Series A

Posted on by Jason Barry

The rockstar team over at Providence’s Digital Innovation Group officially spun out its fourth digital health startup: Praia Health.

Praia Health is making its grand debut armed with $20M in Series A funding to help hospitals avoid the commoditized care caravan by building deeper relationships with their patients.

To accomplish that, Praia enables the creation of robust consumer profiles that extend beyond the medical record, which might finally give providers a way to build the “digital flywheels” enjoyed in other consumer industries.

Here’s how it works (perfectly explained in these short videos):

  • The first step is a “lift and shift” to Praia’s Secure Patient Identity Service (SPI). Once transitioned, SPI seamlessly supports all of the system’s signed-in digital experiences (branded mobile and web apps, patient portals, etc.).
  • Praia Health’s PersonStore then enables health system’s to marry consumer identity with consumer data, securely synchronizing the EMR with outside data sources to connect-the-dots between consumer data and outcomes. 
  • Those SPI and PersonStore capabilities lay the groundwork for a new class of digital experiences that reflect the health system’s unique brand and offerings, assisted by a full suite of development tools to integrate Praia into existing solutions.
  • Once those consumer experiences are available, the flywheel is fueled by adding more solutions to Praia’s partner ecosystem. The platform delivers all of these solutions through a single scalable experience.

Although Praia has some lofty goals, Providence’s incubation model carries some massive advantages that might make them possible.

  • Praia has been in use at the 51 hospital system since January 2022, and already supports over 3.5 million user accounts.
  • Indiana-based Community Health Network is already lined up as Praia’s first post-launch implementation.
  • The aforementioned partner ecosystem is debuting with a whopping 17 startups on-board, including Omada, Wellthy, Kyruus, and Season.

The Takeaway

Although there’s no doubt that Praia’s mission is ambitious, it’s equally apparent that Providence brings plenty of advantages that other founders can only dream of. Providence has a solid track record with its incubator (see: Xealth, DexCare, Circle), and all signs are pointing to Praia keeping that streak alive.

b.well Closes $40M Series C to Unify Patient Data

Posted on by Jason Barry

Patient data unification startup b.well Connected Health cut through last week’s tradeshow noise with $40M in Series C funding to advance its mission to solve healthcare’s fragmentation problem.

b.well was founded in 2015 by a former UnitedHealthcare exec whose daughter suffered a near-fatal medical error when two EHRs weren’t connected, and has since raised just under $100M to make sure patients have one-stop mobile access to their data.

b.well’s FHIR-based platform unifies health data, solutions, and services into a single solution, enabling healthcare organizations to offer customizable experiences powered by longitudinal health records and proactive insights.

  • The white-labeled solution integrates data across healthcare providers, payors, labs, and devices, which lets its clients create personalized user flows while allowing patients to access all of their health data within a single interface.
  • b.well then provides tailored content that guides patients to specific actions, using behavioral nudges and plain language explanations to engage them.

The Series C arrives on the heels of a partnership between b.well and Samsung, which gave Galaxy smartphone users control over their longitudinal records and easy access to care from a provider network that includes Walgreens, ThedaCare, and Rise Health.

  • The partnership could also open up a huge market for b.well, considering that Samsung Health recorded 64M monthly users in 2023.
  • As a kicker, Samsung’s former Head of Digital Health joined b.well’s board of directors through the investment, after playing a key role throughout the integration.

The Takeaway

For all of the healthcare industry’s talk about meeting people where they are, it’s still rare that patients know what services are available, let alone how to access them. b.well now has $40M to help it unify health data in a way that makes these experiences possible, while also empowering organizations to stand out in a market where value is increasingly defined by choice and transparency.

DarioHealth Acquires Digital Therapeutics Startup Twill

Posted on by Jason Barry

The flash flood of ViVE news is officially here, and one of the biggest stories from the first wave was DarioHealth’s acquisition of mental health digital therapeutics startup Twill for $10M plus another $20M in stock.

Dario got its start in 2011 with a direct-to-consumer diabetes app before expanding to cardiometabolic, musculoskeletal, and behavioral conditions. Although Dario still operates its D2C business, it’s since shifted its primary market to employers and health plans to reach larger patient populations.

  • Dario hasn’t shied away from fueling its expansion through M&A, most recently acquiring a trio of companies in 2021 that included wayForward (behavioral health), Upright (MSK), and Physimax Technologies (also MSK).
  • Despite the momentum, Dario hasn’t notched a profitable year since going public in 2016, and it’s looking to Twill to help expedite that journey.

Twill provides configurable Sequences that combine its digital therapeutics with partner solutions to address specific clinical needs such as mental health (Happify) and pregnancy (Elevance).

  • These Sequences are used by three of the five largest US health plans, over half of the top 20 global pharmaceutical companies, and reportedly cover 18 million lives.
  • Twill raised $153M through 2021, so while some quick napkin math probably suggests this wasn’t exactly a glowing exit for investors, the stock-based transaction at least means that there’s some upside if the combined company succeeds.

Outside of the immediate scale achieved through Twill’s customer-base, Dario is banking on its newly consolidated offering striking a chord with employers that are grappling with point solution fatigue and workers in need of mental health support.

  • During Dario’s last investor call, it said that it expects to reach breakeven at ~$80M in revenue (about 4x what it currently generates in a year), but Twill should help in this department.
  • Since Twill and Dario share minimal customer overlap, joining forces should allow them to cross promote their services, and Dario expects the acquisition to double its revenue this year as a result.

The Takeaway

At a time when the market is demanding more value from fewer vendors, Dario’s acquisition of Twill is promising to deliver just that. All eyes will be on the integration of Twill’s platform to see if the expected revenue gains will be realized, but Dario has a track record of successfully folding in acquired companies, so this could end up being one of the first dominoes to fall in a long-awaited chain of consolidation.

Oula Lands $28M for Modern Maternity Care

Posted on by Jason Barry

Topping off a week packed with women’s health stories was maternity care startup Oula’s close of $28M in Series B funding.

Oula’s modern maternity centers combine obstetrics with midwifery to ensure expectant mothers receive comprehensive support throughout their reproductive journeys. 

The philosophy behind Oula is that most pregnancy care takes place between visits, so offering in-home support, better education, and virtual access to providers should create a virtuous cycle for improving outcomes.

  • Oula also places a heavy emphasis on inclusive care by working with most major payors and Medicaid, as well as its dedicated support for BIPOC parents and families.  
  • By finding a middle ground between hypermedicalized and non-medical care, Oula’s pair of New York Clinics have delivered a 26% better C-section rate, a 61% lower preterm birth rate, and a 50% better low birth weight rate compared to the city’s benchmarks. 

The funding arrives as maternal deaths continue to climb in the US, which leads all other high income countries with 23.8 deaths per 100k births (and an abysmal 55.3 deaths per 100k births for Black women).

  • A large part of these discrepancies appears to be due to a lack of access to midwives, certified medical practitioners with expertise in low-risk pregnancies, which also see far worse reimbursement than physicians.
  • Oula makes the case that the US’ lack of proper reimbursement mechanisms for midwives is a key driver of its poor outcomes, and tackling that issue is a core component of its mission.

The Series B will help Oula round out its platform with services like preconception coaching and enhanced miscarriage support, while also allowing it to scale to more markets to rival established players such as Maven Clinic and Progeny Health.

The Takeaway

Oula is looking to modernize maternity care not only by wrapping a tech-enabled bubble around traditional obstetrics, but also by catering to the specific needs of the mothers and health plans that it serves. It’ll have its work cut out for it scaling from a few New York clinics to a nationwide platform, but it’s hard to ask for better timing or a greater need.

Fabric Acquires Conversational AI Startup Gyant

Posted on by Jason Barry

It was another action-packed week in what’s shaping up to be a busy 2024, with healthcare operations enabler Fabric acquiring conversational AI assistant Gyant.

If the name Fabric doesn’t ring a bell, that’s because the acquisition announcement was also the grand debut of Florence’s rebranding to the new moniker.

Florence – now Fabric – launched last March with $20M in seed funding to address what it views as the most significant constraint in care delivery: clinical capacity.

  • The first stop for Fabric, as with a growing number of patients, was the ED. Using Fabric’s mobile platform, patients in the ED can complete intake forms, update clinical information, initiate self-discharge, and schedule follow-ups.
  • The idea is that patients get real-time updates, providers get better ED throughput, and everyone goes home happy.

Fabric then went on to pick up Zipnosis off of Bright Health less than two months after closing its seed round, broadening its product suite with asynchronous telehealth and accelerating its roadmap to new sites of care – particularly the home.

  • The cherry on top of the acquisition was that Zipnosis also brought along 50+ health system customers, giving Fabric a foot in the door to start offering its other services.

Enter Gyant, which fits right into Fabric’s clinical capacity strategy by providing a conversational AI assistant that “empowers patients to self-navigate, connecting to them wherever they prefer to engage.”

  • Fabric had an existing integration with Gyant that allowed patients using the symptom checker within Gyant’s assistant to initiate telehealth visits powered by Fabric (courtesy of Zipnosis). 
  • Just to call a DFD a DFD, Gyant basically helps serve as Fabric’s digital front door.

Fabric’s “optimize capacity, streamline admin” value proposition is reaching provider ears at the right time. Since kicking off operations not too long ago, Fabric’s added 70 health systems to its client roster, and has apparently climbed from zero to eight-figures in ARR.

The Takeaway

Through its acquisition of Zipnosis last year, the company then known as Florence made it clear that it was looking to become an end-to-end healthcare operations enablement platform through any path necessary, including M&A. Now with the addition of Gyant, Fabric is walking the talk.

Turquoise Takes $30M Step Along Path To Transparency

Posted on by Jason Barry

Healthcare pricing looks like it’s on its way to becoming more transparent, with Turquoise Health landing $30M in Series B funding to shine an AI-powered light through the fog of medical costs.

Since launching in 2020 prior to hospital and payor transparency regulations, Turquoise has built a comprehensive database of negotiated prices for healthcare services, allowing patients to understand costs beforehand… similar to pretty much every other industry.

  • While that information is publically available through Turquoise’s website, payors and providers use the Turquoise platform to ensure they’re well-armed at the negotiating table and compliant with current regulations.
  • Turquoise also recently expanded its platform to include Clear Contracts, a tool that leverages AI to streamline the direct contracting process and uncover relevant insights from its dataset.

Over 160 partners already work with Turquoise, ranging from payors and providers to employers and device manufacturers looking to understand their markets. The latest funding will help onboard these recently-added clients into Turquoise’s growing product suite.

  • The funding will also accelerate the introduction of new AI features aimed at making Turquoise’s data as intuitive to use as possible, such as by allowing hospitals to upload their contract documents before asking the AI how certain terms compare.
  • Although transparency compliance has been heading in the right direction, Turquoise is also gearing up to help more organizations meet new reporting requirements that are just around the corner (which it did a great job outlining here).

Now that Turquoise seems to have cracked the code on compiling negotiated rates, it’s setting its sights on moving past data toward an integrated platform centered on administrative efficiency. New AI tools are almost purpose-built to wade through the PDFs where pricing policies hide, and Turquoise won’t be wasting any time incorporating those tools into its platform.

The Takeaway

Price transparency data has come a long way since 2021, and it’s safe to say that AI has come just as far. With transparency requirements only set to become more stringent, demand for platforms using AI to transmute that data into operational gold will only continue to grow, and Turquoise now has $30M to help ensure it’s healthcare’s alchemist of choice.

Artisight Closes $42M to Put Eyes on Operational Inefficiency

Posted on by Jason Barry

Major inefficiencies are often caused by pixel-sized pain points that are hard to see one at a time, so Artisight just closed $42M in Series B funding to help hospitals combine those pixels into high resolution images of their operations.

To unlock new efficiency gains, Artisight is turning to new methods. Its Smart Hospital Platform consists of ambient IoT sensors coupled with two-way audio and video, improving the coordination of people and processes so that clinicians can focus on caring for patients.

  • In patient rooms, that looks like using cameras and microphones to support tasks such as fall prevention and pressure ulcer prevention, as well as more robust use cases like virtual nursing (popular among current partners like WellSpan).
  • In the OR, the same platform is used to automate documentation, enhance communication, and provide data for real-time decision making.
  • All of that data then feeds into Artisight’s platform to glean insights into process improvement and train its task-specific algorithms.

Although patients probably don’t jump at the idea of having a camera pointed at them during some of the most vulnerable situations of their lives, it’s also safe to say that many of them would prefer a camera over having their health deteriorate due to a preventable cause.

  • The same goes for providers, where the tension of having an observer is offset by the fact that the same observer is helping monitor patients, coordinate supplies, and reduce administrative burden.

The Series B is going toward scaling the Smart Hospital Platform across more organizations, as well as deeper into the 11 systems where it’s already deployed. 

  • Artisight is also looking to expand the number of workflows that can be improved or automated using its algorithms, and $42M should go a long way toward making that happen through new health system partnerships.
  • The partnership component is key, given that Artisight trains its algorithms locally to address specific issues at each site – an approach that seems to be resonating with the partner health systems that participated in the round.

The Takeaway

While Artisight’s quest to redefine hospital efficiency involves the unenviable task of introducing cameras into delicate situations, it believes that improving the outcomes of those situations is worth the effort, and it has a roster of strategic investors who seem to share that belief.

2023 Digital Health Startup Benchmarks

Posted on by Jason Barry

Rock Health’s industry analysis is a frequent feature in our top stories, but it’s tough to stay away with reports as consistently solid as last week’s 2023 Digital Health Startup Benchmarking Survey.

The survey broke down responses from 87 early-stage digital health startups to provide performance benchmarks for customer acquisition cost, lifetime value, expenses, and more [Chart: Company Breakdown by Stage / Segment].

Series B is a tipping point for growth, but not (yet) margins.

  • [Chart: Revenue by Funding Stage] While Series A startups are generally building an MVP and testing product-market fit, no Series B respondents were still pre-revenue (vs. 25% of Series A). That revenue is going straight to growth, with just 12% of Series B startups reporting positive margins (a small increase from 9% of Series A).

CAC and LTV calculations are challenging for early-stage startups.

  • [Chart: CAC by Customer Segment][Chart: LTV by Customer Segment] Both CAC and LTV vary widely by customer type, but both charts illustrate that “you get out what you put in.” It cost respondents an average of $58k to sign a payor, but the average lifetime value was $5.1M. That compares to a CAC of $170 and an LTV of $1.7k for consumers.

Engagement metrics are the first step to robust outcomes.

  • On average, each company reported tracking two engagement outcome metrics, two clinical outcome metrics, and one economic outcome metric. “For startups balancing speed-to-outcomes and quality-of-outcomes, an ‘engagement first, clinical/economic later’ approach might help to toe the line.”

Navigating product versus marketing costs is a balancing act.

  • [Chart: Company Product vs. Marketing Costs] The amount of revenue the startups devote to product versus business development and marketing evolves alongside scale. Pre-seed respondents allocated 75% of revenue to product and 11% to marketing, while Series B respondents allocated 36% of revenue to product and 22% to marketing.

The Takeaway

We’re lucky to be in a golden age of startup transparency, and between this Rock Health survey and the latest State of CareOps report, there’s no shortage of great information out there for founders to use as guideposts in their pursuit of scale.

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