The 10 most exciting digital health startups of 2024, according to VCs

Date:

In a post-Covid world, VCs say it’s not as easy to get excited about investing in digital health. Deal activity in healthcare IT remained relatively steady in the first quarter of 2024, with a total of 74 deals valued at nearly $1 billion, up only 3% from the year-ago quarter, according to PitchBook data.

Still, a number of promising startups have caught investors’ attention this year. TechCrunch spoke to nearly a dozen healthcare VCs about the companies they think have the most promising future. While recently formed AI-powered startups that are solving staggering administrative challenges in the U.S. healthcare system were at the top of their recommendations, they also mentioned a number of older, non-AI-focused businesses.

We narrowed down their suggestions to a list of names that were mentioned by more than one VC, which came down to a total of 10 companies. The VCs discussed with us companies that were in their portfolios and those that were not.

Summarize

What it does: Uses AI to automate medical records based on interactions between doctors and patients.

Founded in 2018 by Shiva Rao, a practicing cardiologist, Abridge is an early entrant in the medical note taking space and has achieved integration with the all-powerful Epic Systems health record software.

Why it’s promising: This Pittsburgh-based startup is generating excitement among investors and hospital systems eager to free up physicians’ time spent taking notes. Abridge is the health tech startup mentioned most often among the investors we spoke to.

Some investors said Abridge is a leader in its category. Other companies vying to dominate the AI-powered medical note-taking market include Ambiance, Nabla, Microsoft-owned Nuance and Suki.

Financing: In February, Abridge had raised Series C funding of $150 million led by Lightspeed Ventures at a valuation of $850 million, while the virtual medical scribe startup had raised Series B funding of $30 million from Spark Capital, Bessemer Venture Partners, CVS Health Ventures, and others.

Codametrics

What it does: Founded in 2019, Codametrics uses AI to automate medical coding. The company’s technology transforms medical notes stored in electronic health records into diagnostic codes, helping to reduce errors and administrative burdens.

Why it’s promising: Medical coding is tedious and error-prone. Entering the wrong code for a condition or treatment can lead to denial of insurance claims and other administrative problems. Furthermore, the burden of entering codes falls on already busy physicians and nurses, leading to increased stress and burnout.

The company has several competitors, including Fathom Health, but investors say Codametrics has one of the largest annotated coding datasets.

Financing and Valuation: In March, Codametrics raised a $40 million Series B from Transformation Capital, with participation from investors such as SignalFire and Cressy Ventures. The deal valued the Boston-based company at $220 million, according to PitchBook.

Coher Health

What it does: Coher Health accelerates the health insurance approval process, known as prior authorization, for medical conditions with the help of AI.

Why it’s promising: Prior authorization management can take hours for medical and administrative staff because it requires gathering the proper documentation to submit to health insurers or Medicaid. Coher Health’s AI can reduce the time spent on this task to minutes, saving medical and administrative staff hours on these tasks.

Investors say Coher is currently the leader in this space, but other startups that accelerate health insurance approval for medical conditions include Anterior and Alaffia Health.

Financing: Coher Health raised $50 million in a Series B round from Deerfield Management earlier this year, with participation from Define Ventures, Polaris Partners, Longitude Capital, and Flare Capital Partners.

Grow Therapy

What it does: Grow Therapy connects therapists who want to start independent practices with patients and insurers. Founded in 2020, the startup uses a so-called business-in-a-box model as it gives mental health professionals the tools to file claims, receive payments, and match patients with patients.

Why it’s promising: The company claims its business model gives physicians more flexibility than offering their services through marketplaces like Headway or Lyra. While it’s unclear if that’s actually the case, investors say Grow, true to its name, is growing quickly.

Financing and Valuation: In April, Groww raised an $88 million Series C capital led by Sequoia at a valuation of $1.4 billion, according to PitchBook data.

Equipped

What it does: Four-year-old Equip offers online treatment for children, teens, and adults in all 50 states and accepts most health insurance. Equip providers are also trained to address co-occurring conditions such as anxiety, depression, and obsessive-compulsive disorder (OCD).

Why it’s promising: According to the National Eating Disorders Association, about 10% of the U.S. population will experience an eating disorder in their lifetime, but only a small number of these people receive help. The company’s offering provides care to people who don’t live near an eating disorder center or prefer to receive treatment online.

Financing and Valuation: Equip’s last valuation was $505 million, and it has raised a total of $135 million in funding from investors including Optum Ventures and General Catalyst, according to data from PitchBook.

Maven

What it does: The New York-based health clinic and benefits platform offers services for fertility, adoption, parenting, pediatrics and menopause through employers including Microsoft and AT&T. Maven also serves Medicaid patients.

Why it’s promising: Investors say 10-year-old Maven continues to grow, as its focus area — digital health services for women and families — has historically been underserved. While VC interest in women’s health has grown in recent years, the U.S. Supreme Court’s decision to overturn Roe v. Wade in 2022 has shed even more light on the need for technologies that serve the female population.

Financing and Valuation: Since its inception, Maven has raised approximately $300 million in funding and its last valuation was $1.35 billion in a Series E round led by General Catalyst in late 2022, with participation from VCs including Lux Capital, Oak HC/FT, and Sequoia.

Memora Health

What it does: Memora Health offers virtual AI-based care coordination, reducing the administrative burden for medical staff. The company’s technology uses text messages to communicate with patients, automating tasks such as appointment reminders, answering common patient questions and collecting data about symptoms and post-procedure recovery.

Why it’s promising: Like many other AI-based healthcare startups, Memora also saves medical staff time. The company also helps patients feel more supported in their health journey.

Financing: The company spun off from the Harvard Innovation Lab and advanced through Y Combinator in 2018. Since then, it has raised about $80 million and had a valuation of $430 million in April 2023, according to PitchBook data. Memora’s investors include General Catalyst and Andreessen Horowitz.

SmarterDX

What it does: Founded in 2020, SmarterDx uses AI to help hospitals avoid missing out on revenue by analyzing patients’ lab results, medications, and doctors’ notes to detect minor errors and omissions in patient diagnoses and associated medical codes. The company’s technology reviews patient charts for accuracy before a claim is sent to health insurance or Medicare.

Why it’s promising: Investors say that because SmarterDx helps health systems drive more revenue, the value of the company’s technology is easy to measure.

Financing: In May, SmarterDX raised $50 million in a Series B round led by Transformation Capital, with participation from Bessemer Venture Partners, Flare Capital Partners, and Floodgate Fund. The latest capital infusion brings the company’s total funding to $71 million.

Summer Health

What it does: Two-year-old Summer Health connects parents with pediatricians who address emergency care and behavioral concerns in just minutes. The company offers its text messaging service directly to consumers and through employers that provide access to Summer Health as a benefit.

Why it’s promising: Busy and worried parents want answers to their children’s health problems immediately and 24 hours a day. Summer Health eases parents’ worries as they can get quick answers to their questions through an app.

Financing: In April, Summer Health raised $12 million in a Series A round led by 7wireVentures and existing investors such as Sequoia, Lux Capital, and Chelsea Clinton’s Metrodora Ventures.

Transcurrent

What it does: Four-year-old Transcarent helps large companies save money on providing health insurance to employees. The startup gives employees access to discounted medications, telehealth services, and personalized AI-generated answers about their health coverage.

Why it’s promising: The company’s rapid growth can be attributed to its founder Glenn Tullman, who previously started Livongo, a chronic condition management company that was acquired by Teladoc in 2020 for $18.5 billion.

The company also recently introduced an AI platform that answers members’ questions about coverage, provides clinical information and connects them with medical staff as needed.

Financing and Valuation: In May, the company raised $450 million in a Series D round led by General Catalyst and 7Wire Ventures at a valuation of $2.2 billion.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Share post:

Subscribe

spot_imgspot_img

Popular

More like this
Related

Here are all the devices compatible with iOS 18

Apple's WWDC 2024 was full of announcements about iOS...

Will Smith broke Twitch’s biggest streaming record, the real reason why

Every summer, Spanish Twitch streamer Ibai Llanos hosts a...