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Solera Raise, Innovaccer Acquisition, and Digital Health’s David vs Goliath Year
January 23, 2025
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Together with
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“‘The last 5% now matters because the rest is now a commodity’… Plenty of ‘AI agents’ will show up, but most will slap a GPT wrapper on and call it done… The real edge comes from the last 5%. The teams that build for healthcare first and tackle the messy, real-world problems will pull ahead.”
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Sword Health Product Lead Rik Renard
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If last year’s digital health market felt like David vs. Goliath, Rock Health’s full-year funding recap has you covered with the reason why.
Here’s 2024 by the numbers:
- U.S. digital health funding totaled $10.1B across 497 rounds
- Continued downtrend in investment (2023 was $10.8B total, 503 rounds)
- Shift to early-stage companies drove the dropoff
There’s a tale of two trends unfolding between the early-stage startups and late-stage incumbents battling for market share, and neither side is helping out the funding total.
- Investors began focusing on early-stage startups throughout 2024, and a whopping 86% of labeled rounds went to Seed, Series A, and Series B startups.
- Larger companies also started to see smaller checks, with the median Series C and D raise clocking in at $50M and $55M, respectively (down ~10% from 2023).
The shift to earlier-stage investments was driven by an appetite for startups that can show traction with small/medium sized organizations, especially among increasingly influential mega-VCs like General Catalyst and Andreessen Horowitz.
- These smaller orgs want gen AI capabilities, aren’t a top target for massive IT players, and can be a goldmine for the startups that can fill that gap.
- The mega-VC influence in digital health follows a broader trend, with PitchBook data showing that 50% of all venture capital raised in the U.S. last year went to just nine firms… out of 391 total VCs. GC and a16z happened to rank #1 and #2.
Since it wouldn’t be a 2024 recap without the magic two letters: AI investment reached a fever pitch, and AI-first startups took home 37% of the overall funding.
- Goliaths in this space include incumbents like Epic, the healthcare divisions of Big Tech players like Microsoft, and younger startups with the warchest to compete like Commure.
- Rock Health sees a future where the AI Davids can continue thriving by addressing specialized use cases or smaller customer segments, as long as they keep an eye on the roadmaps of their bigger competition to avoid getting stepped on.
The Takeaway
If the healthcare industry wants to keep innovating, it needs companies of all shapes and sizes to make it happen. Rock Health’s 2024 recap is a good reminder that not every startup needs to be a Goliath, and that the Davids are still finding success by right-sizing their operation to the customers they serve.
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UChicago Medicine’s Breakthrough With Abridge
Better medical conversations have a direct impact on clinician satisfaction and patient experience, which is why the University of Chicago Medicine trusts Abridge to make them great. Discover how Abridge’s AI platform helped UChicago Medicine transform clinical documentation and see a breakthrough improvement in Press Ganey scores in just six weeks.
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Top Systems Scale Primary Care With K Health
Leading health systems are turning to K Health’s AI-driven primary care solution to give their patients access to high-quality care with wait times measured in hours, not months. Find out why K Health is the only clinical AI company partnering with top systems to scale fully integrated primary care experiences.
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- Innovaccer Acquires Humbi AI: Innovaccer is already putting its $275M Series E to work with the acquisition of Humbi AI, a specialized actuarial intelligence company set to lay the foundation for Actuarial Copilots and add some quick momentum to its AI roadmap. Humbi AI’s expertise in Medicare and Medicaid data spans over 200M lives, which should only improve Innovaccer’s ability to help its customers design smarter value-based contracts, optimize drug commercialization, and manage performance.
- Physician Input on Administrative Decisions: An AMA survey of 2,144 physicians linked perceived control over administrative decisions to burnout and career changes. A majority of physicians reported adequate control over scheduling (75%), patient load (61%), and their workload (61%). Most respondents (58%) also felt appropriate autonomy during their routine tasks and workflows. Each of those areas was independently associated with burnout if physicians felt a lack of control, while patient load and workload were the only two associated with intent to retire.
- Solera Series E: Solera Health landed $40M of Series E financing to bolster its HALO platform that connects individuals to benefits based on their unique care needs, while also allowing payors and employers to manage their point solutions within a single interface for easier comparisons of each program’s effectiveness. The funding will go toward the buildout of HALO Cloud, which will unify Solera’s on-benefit solution network to simplify the addition of 100+ applications and accelerate integrations.
- Digital Tools Among Older Adults: A new analysis of the 2021 National Poll on Healthy Aging survey delivered an updated look at the use of digital health technologies among older adults. Data from 2,110 adults (avg. 64 years old) showed that 65% used a patient portal, 49% used telehealth, and 44% used mobile health apps. The rest of the findings were in line with previous data indicating greater likelihood of using digital tools among females (OR: 1.53), younger ages of 50-59 (2.41), and higher education levels (2.49).
- It’s Time to Build Infrastructure: a16z put out a stellar blog post on healthcare’s notoriously dated tech infrastructure, which was equal parts a call to action for builders and a useful overview of the opportunities in the space. The article breaks down the areas of existing infrastructure that are long overdue for an upgrade and increasingly vulnerable to outages, as well as the emerging business models and care delivery innovations that are begging for de novo infrastructure to get built.
- Qventus Grabs $105M: Qventus closed a $105M Series D funding round to ramp up its AI-first care operations automation for both inpatient and outpatient settings. The fresh funds will accelerate Qventus’ expansion into more care settings, building on existing offerings like Surgical Growth and Inpatient Capacity. Always a good sign when the strategic investors include names like Northwestern Medicine, Allina Health, and HonorHealth.
- Denver Health + Nabla: Safety net hospitals are looking to new tech to improve care for vulnerable populations, and Denver Health is the latest system to roll out Nabla’s ambient AI assistant after a successful eight week pilot. Denver Health is Colorado’s primary safety net health system serving a quarter of Denver’s population annually, and Nabla is now available to its entire clinic staff following a 40% decrease in note-typing during visits and a 13% reduction in Pajama Time during the pilot.
- Arcadia Allies With Atropos: Arcadia teamed up with Atropos Health to unveil a precision medicine solution that identifies patients with undiagnosed or misdiagnosed conditions. The new solution leverages an initial model from Atropos Health to accelerate clinical decision-making and allow providers to efficiently connect at-risk patients with the latest evidence-based treatments. More models and upgrades are already on the way later this year.
- Trump Axes AI Safety Rules: In what could be a bellwether for wholesale changes in the U.S. government’s approach to regulating AI, the Trump Administration rescinded the Biden Administration’s executive order on AI safety adopted in October 2023. The Biden order was designed to reduce the risks of AI development, and included provisions on AI safety in healthcare. President Trump added another big move by unveiling Project Stargate, a $500B investment to build AI infrastructure including “colossal data centers” across the U.S.
- WellSky Extract for Home Health: WellSky debuted an AI solution that cuts down on manual data entry by directly uploading patient medication information to the EHR after extracting it from sources like referral documents or photographs of medication bottles. Home care patients at the early adopters of WellSky Extract for Home Health reportedly took an average of 13 medications that required 20 minutes to manually record, but now takes only 8 minutes leveraging the new tool.
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The First 30 Days: What to Expect With AI
Implementing AI documentation tools promises significant benefits, but how do you ensure a smooth transition? Playback Health has you covered with this comprehensive 30-day roadmap outlining what to expect, industry best practices, and its own proven implementation approach.
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Simplify RPM & Maximize Patient Engagement
Engaging patients at critical moments is essential for success. With Withings Health Nudges feature, care teams can send tailored messages to the screen of the blood pressure monitor— offering personalized support when they need it most.
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- Bridging Care Gaps for Underserved Populations: Is your health system, rural health clinic, or federally qualified health center struggling to reach patients with obstacles to receiving in-person care? This Clear Arch Health whitepaper explores how combining RPM with VBC can help facilitate proactive interventions, address social determinants of health, and get the most out of new CMS reimbursement pathways.
- Join the Nabla Team! Nabla is scaling up, and it’s looking for a Head of Marketing to lead its next phase of growth. This role will help broaden Nabla’s footprint and showcase the proven impact of ambient AI with a company dedicated to bringing joy back to the practice of medicine. Learn more and apply here.
- Healthcare’s Financial Future, VC and PE in Focus: Medallion sat down with General Atlantic, Transformation Capital, and Flare Capital Partners to unpack how inefficiencies in provider operations could be quietly draining your revenue – and fast. Tune in to the Elevate session for their secret sauce to address the issue: targeted fixes instead of a total overhaul.
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