How Abridge became one of the most talked-about healthcare AI startups

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Ask any healthcare-focused VC to name one of the top AI startups and one name comes up over and over again: a Pittsburgh-based company called Abridge. And it’s a startup that launched before OpenAI became a household name and before LLM entered the common Valley lexicon.

In 2019, Shiva Rao, a practicing cardiologist, pitched a startup idea to Andy Weissman, general partner at Union Square Ventures. Rao called it SoundCloud plus RapGenius for Medicine.

Although Weissman thought it was a bit comical to compare a new AI-powered medical note-taking app to music hosting and lyric transcription, the concept connected with him.

Rao explained that doctors spend up to two hours a day – usually outside of regular work hours – typing notes that summarize what was discussed with their patients that day. Such administrative tasks have been causing burnout in physicians for years, leading some to leave the profession altogether. Rao assured Weissman that the latest innovations in AI could dramatically reduce the time doctors spend on the ever-growing paperwork load.

It was several years ago when generative AI took the world by storm and captured the imagination of V.C.

“It was a very strange idea. Nobody had done it before,” Weisman said.

But Weissman and the other USV partners liked that Rao was not only a physician at the University of Pittsburgh Medical Center but also spent half his time as a corporate venture capitalist for that health system, investing in health tech startups. Rao’s staff and advisors were also graduates and professors at Carnegie Mellon, one of the country’s top institutions for engineering and AI research.

“(Shiv) had a rare combination of talents: an entrepreneur with a very ambitious vision, and also a very interesting team,” Weissman said.

Abridge also had a basic transcription product that doctors could download for free onto their smartphones and begin using during conversations with patients. Their use formed the basis of Abridge’s LLM.

Nearly five years after USV led a $5 million seed round in Rao’s startup Abridge, the company has become one of the most talked-about and fast-growing AI-powered healthcare businesses.

Although most corporations are still very cautious about adopting AI tools, large medical systems are eager to sign contracts with Abridge.

“The sales cycle for (health systems) can be 18 to 24 months,” Rao said. “When we started the company, we knew what we were getting into.” But with a four-year lead on a virtual scribe product trained on thousands of doctor-patient conversations, and now that AI is booming, hospitals are suddenly buying Abridge at a rapid pace, a stark contrast to their typically long-standing buying behavior. The company has announced a new health system customer almost every week since the start of 2024.

“We had built up so much potential energy that became kinetic almost overnight in January,” Rao said. “University of Chicago, Sutter, Yale, Lee Health, Christus, Emory, and the list is long.”

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Major hospitals are not only purchasing multi-thousand seat licenses of Abridge but, in many cases, are publishing rave reviews about how the health tech software is changing physicians’ lives. Hospital executives and doctors are describing Abridge as “life-changing,” “magical,” and “one of the most important paradigm shifts in our careers.”

One of the biggest criticisms of generative AI is that it still has few concrete commercial applications. But virtual medical note taking appears to be a valuable application of this new technology.

being drowned in paperwork

“I have professional PTSD and war stories that involve seeing patients and then spending hours at night writing notes and doing all this clerical work, which really takes away from what matters most, which is your patient, but it also takes away from your personal life,” Rao said.

With Abridge recording in the background, the physician can focus entirely on the patient during the visit without having to worry about filling out specific fields in the medical record.

The benefits of A.I.-powered medical scribes are very easy to measure, says Dr. Lee Schwamm, chief digital health officer at Yale New Haven Medical System, which is an Abridge customer. That’s why so many health systems are flocking to use them, particularly Abridge. “It’s one of the most popular products in the A.I. space right now,” he told TechCrunch.

Like many administrative things in health tech, when it comes to selecting a vendor, the most important considerations are price and integration with Epic, an EHR used by most large health systems in the U.S., Schwamm said. Abridge, which supports 14 foreign languages, including Haitian Creole, Brazilian Portuguese and Punjabi, is often the winner when health systems compare it head-to-head with other AI-powered medical scribes, Schwamm said.

Earlier this year, Abridge got the rights to be integrated inside Epic. After Abridge records a session and the doctor stops the recording, “there’s a note sitting inside Epic in English that they can quickly verify, edit and adjust,” Rao said.

While Abridge appears to be ahead of its competitors, which include Ambience, Nabla and Suki in addition to Microsoft-owned Nuance, Schwam is not sure it will be able to maintain its lead for long.

“The big question is: do you need a dedicated medical LLM to succeed in this field?” he asked. “Or will the giant foundation models, GPT-4O, Google and Meta, get so good that they can swallow whole collections of medical notes and start delivering the same kind of performance?”

This line of inquiry shows that these are still early days not just for virtual medical note taking but for most generative AI companies. The pace of innovation is fast and furious, and today’s winners could easily lose their edge.

“Abridge is a length ahead, but it’s still early in the race,” said Schwamm, “the horse could hurt his knee and falter, or he could keep going.”

For now, most investors who spoke to TechCrunch agree that Abridge is leading the AI-powered medical scribe competition. That’s why money is pouring into the company.

In February, Abridge raised $150 million in a Series C round led by Lightspeed Ventures, valuing it at $850 million.

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