Hello and welcome back to Equity, TechCrunch’s venture capital-focused podcast, where we unpack the numbers behind the headlines.
First and foremost, Equity was nominated for a Webby for “Best Technology Podcast”! Drop everything and go Vote for Equity! We’d appreciate it. A lot. And even if we lose, well, we’ll keep doing our thing and making each other laugh. (Note: We are in last place, which is, well, something.)
Regardless, the Equity team got together once again this week to not only go over the news of the week, but also to do a little soul searching. You see, some news broke yesterday, so we figured that we had to talk about it in our usual style. So, here’s the rundown:
We are back Monday morning with our weekly kick-off show. Have a great weekend!
In the early 2000s, Jeff Bezos gave a seminal TED Talk titled “The Electricity Metaphor for the Web’s Future.” In it, he argued that the internet will enable innovation on the same scale that electricity did.
We are at a similar inflection point in healthcare, with the recent movement toward data transparency birthing a new generation of innovation and startups.
Those who follow the space closely may have noticed that there are twin struggles taking place: a push for more transparency on provider and payer data, including anonymous patient data, and another for strict privacy protection for personal patient data. What’s the main difference?
This sector is still somewhat nascent — we are in the first wave of innovation, with much more to come.
Anonymized data is much more freely available, while personal data is being locked even tighter (as it should be) due to regulations like GDPR, CCPA and their equivalents around the world.
The former trend is enabling a host of new vendors and services that will ultimately make healthcare better and more transparent for all of us.
These new companies could not have existed five years ago. The Affordable Care Act was the first step toward making anonymized data more available. It required healthcare institutions (such as hospitals and healthcare systems) to publish data on costs and outcomes. This included the release of detailed data on providers.
Later legislation required biotech and pharma companies to disclose monies paid to research partners. And every physician in the U.S. is now required to be in the National Practitioner Identifier (NPI), a comprehensive public database of providers.
All of this allowed the creation of new types of companies that give both patients and providers more control over their data. Here are some key examples of how.
This is a key capability of patients’ newly found access to health data. Think of how often, as a patient, providers aren’t aware of treatment or a test you’ve had elsewhere. Often you end up repeating a test because a provider doesn’t have a record of a test conducted elsewhere.
Why can we see all our bank, credit card and brokerage data on our phones instantaneously in one app, yet walk into a doctor’s office blind to our healthcare records, diagnoses and prescriptions? Our health status should be as accessible as our checking account balance.
The liberation of financial data enabled by startups like Plaid is beginning to happen with healthcare data, which will have an even more profound impact on society; it will save and extend lives. This accessibility is quickly approaching.
As early investors in Quovo and PatientPing, two pioneering companies in financial and healthcare data, respectively, it’s evident to us the winners of the healthcare data transformation will look different than they did with financial data, even as we head toward a similar end state.
For over a decade, government agencies and consumers have pushed for this liberation.
In 2009, the Health Information Technology for Economic and Clinical Health Act (HITECH) gave the first big industry push, catalyzing a wave of digitization through electronic health records (EHR). Today, over 98% of medical records are digitized. This market is dominated by multi‐billion‐dollar vendors like Epic, Cerner and Allscripts, which control 70% of patient records. However, these giant vendors have yet to make these records easily accessible.
A second wave of regulation has begun to address the problem of trapped data to make EHRs more interoperable and valuable. Agencies within the Department of Health and Human Services have mandated data sharing among payers and providers using a common standard, the Fast Healthcare Interoperability Resources (FHIR) protocol.
Image Credits: F-Prime Capital
This push for greater data liquidity coincides with demand from consumers for better information about cost and quality. Employers have been steadily shifting a greater share of healthcare expenses to consumers through high-deductible health plans – from 30% in 2012 to 51% in 2018. As consumers pay for more of the costs, they care more about the value of different health options, yet are unable to make those decisions without real-time access to cost and clinical data.
Image Credits: F-Prime Capital
Tech startups have an opportunity to ease the transmission of healthcare data and address the push of regulation and consumer demands. The lessons from fintech make it tempting to assume that a Plaid for healthcare data would be enough to address all of the challenges within healthcare, but it is not the right model. Plaid’s aggregator model benefited from a relatively high concentration of banks, a limited number of data types and low barriers to data access.
By contrast, healthcare data is scattered across tens of thousands of healthcare providers, stored in multiple data formats and systems per provider, and is rarely accessed by patients directly. Many people log into their bank apps frequently, but few log into their healthcare provider portals, if they even know one exists.
HIPPA regulations and strict patient consent requirements also meaningfully increase friction to data access and sharing. Financial data serves mostly one-to-one use cases, while healthcare data is a many-to-many problem. A single patient’s data is spread across many doctors and facilities and is needed by just as many for care coordination.
Because of this landscape, winning healthcare technology companies will need to build around four propositions:
In a joint address to Congress last night, President Biden updated the nation on vaccination efforts and outlined his administration’s ambitious goals.
Biden’s first 100 days have been characterized by sweeping legislative packages that could lift millions of Americans out of poverty and slow the clock on the climate crisis, but during his first joint address to Congress, the president highlighted another smaller plan that’s no less ambitious: to “end cancer as we know it.”
“I can think of no more worthy investment,” Biden said Wednesday night. “I know of nothing that is more bipartisan…. It’s within our power to do it.”
The comments weren’t out of the blue. Earlier this month, the White House released a budget request for $6.5 billion to launch a new government agency for breakthrough health research. The proposed health agency would be called ARPA-H and would live within the NIH. The initial focus would be on cancer, diabetes and Alzheimer’s but the agency would also pursue other “transformational innovation” that could remake health research.
The $6.5 billion investment is a piece of the full $51 billion NIH budget. But some critics believe that ARPA-H should sit under the Department of Health and Human Services rather than being nested under NIH.
ARPA-H would be modeled after the Defense Advanced Research Projects Agency (DARPA), which develops moonshot-like tech for defense applications. DARPA’s goals often sound more like science fiction than science, but the agency contributed to or created a number of now ubiquitous technologies, including a predecessor to GPS and most famously ARPANET, the computer network that grew into the modern internet.
Unlike more conservative, incremental research teams, DARPA aggressively pursues major scientific advances in a way that shares more in common with Silicon Valley than it does with other governmental agencies. Biden believes that using the DARPA model on cutting edge health research would keep the U.S. from lagging behind in biotech.
“China and other countries are closing in fast,” Biden said during the address. “We have to develop and dominate the products and technologies of the future: advanced batteries, biotechnology, computer chips, and clean energy.”
The last year of pandemic living has been real-world, and sometimes harrowing, proof of how important it can be to have efficient and well-equipped emergency response services in place. They can help people remotely if need be, and when they cannot, they make sure that in-person help can be dispatched quickly in medical and other situations. Today, a company that’s building cloud-based tools to help with this process is announcing a round of funding as it continues to grow.
RapidDeploy, which provides computer-aided dispatch technology as a cloud-based service for 911 centers, has closed a round of $29 million, a Series B round of funding that will be used both to grow its business, and to continue expanding the SaaS tools that it provides to its customers. In the startup’s point of view, the cloud is essential to running emergency response in the most efficient manner.
“911 response would have been called out on a walkie talkie in the early days,” said Steve Raucher, the co-founder and CEO of RapidDeploy, in an interview. “Now the cloud has become the nexus of signals.”
Washington, DC-based RapidDeploy provides data and analytics to 911 centers — the critical link between people calling for help and connecting those calls with the nearest medical, police or fire assistance — and today it has about 700 customers using its RadiusPlus, Eclipse Analytics and Nimbus CAD products.
That works out to about 10% of all 911 centers in the US (7,000 in total), and covering 35% of the population (there are more centers in cities and other dense areas). Its footprint includes state coverage in Arizona, California, and Kansas. It also has operations in South Africa, where it was originally founded.
The funding is coming from an interesting mix of financial and strategic investors. Led by Morpheus Ventures, the round also had participation from GreatPoint Ventures, Ericsson Ventures, Samsung Next Ventures, Tao Capital Partners, Tau Ventures, among others. It looks like the company had raised about $30 million before this latest round, according to PitchBook data. Valuation is not being disclosed.
Ericsson and Samsung, as major players in the communication industry, have a big stake in seeing through what will be the next generation of communications technology and how it is used for critical services. (And indeed, one of the big leaders in legacy and current 911 communications is Motorola, a would-be competitor of both.) AT&T is also a strategic go-to-market (distribution and sales) partner of RapidDeploy’s, and it also has integrations with Apple, Google, Microsoft, and OnStar to feed data into its system.
The business of emergency response technology is a fragmented market. Raucher describes them as “mom-and-pop” businesses, with some 80% of them occupying four seats or less (a testament to the fact that a lot of the US is actually significantly less urban than its outsized cities might have you think it is), and in many cases a lot of these are operating on legacy equipment.
However, in the US in the last several years — buffered by innovations like the Jedi project and FirstNet, a next-generation public safety network — things have been shifting. RapidDeploy’s technology sits alongside (and in some areas competes with) companies like Carbyne and RapidSOS, which have been tapping into the innovations of cell phone technology both to help pinpoint people and improve how to help them.
RapidDeploy’s tech is based around its RadiusPlus mapping platform, which uses data from smart phones, vehicles, home security systems and other connected devices and channels it to its data stream, which can help a center determine not just location but potentially other aspects of the condition of the caller. Its Eclipse Analytics services, meanwhile, are meant to act as a kind of assistant to those centers to help triage situations and provide insights into how to respond. The Nimbus CAD then helps figure out who to call out and routing for response.
Longer term, the plan will be to leverage cloud architecture to bring in new data sources and ways of communicating between callers, centers and emergency care providers.
“It’s about being more of a triage service rather than a message switch,” Raucher said. “As we see it, the platform will evolve with customers’ needs. Tactical mapping ultimately is not big enough to cover this. We’re thinking about unified communications.” Indeed, that is the direction that many of these services seem to be going, which can only be a good thing for us consumers.
“The future of emergency services is in data, which creates a faster, more responsive 9-1-1 center,” said Mark Dyne, Founding Partner at Morpheus Ventures, in a statement. “We believe that the platform RapidDeploy has built provides the necessary breadth of capabilities that make the dream of Next-Gen 9-1-1 service a reality for rural and metropolitan communities across the nation and are excited to be investing in this future with Steve and his team.” Dyne has joined the RapidDeploy board with this round.
Swedish digital health startup Kry, which offers a telehealth service (and software tools) to connect clinicians with patients for remote consultations, last raised just before the pandemic hit in Western Europe, netting a €140M Series C in January 2020.
Today it’s announcing an oversubscribed sequel: The Series D raise clocks in at $312M (€262M) and will be used to keep stepping on the growth gas in the region.
Investors in this latest round for the 2015-founded startup are a mix of old and new backers: The Series D is led by CPP Investments (aka, the Canadian Pension Plan Investment Board) and Fidelity Management & Research LLC, with participation from existing investors including The Ontario Teachers’ Pension Plan, as well as European-based VC firms Index Ventures, Accel, Creandum and Project A.
The need for people to socially distance during the coronavirus pandemic has given obvious uplift to the telehealth category, accelerating the rate of adoption of digital health tools that enable remote consultations by both patients and clinicians. Kry quickly stepped in to offer a free service for doctors to conduct web-based consultations last year, saying at the time that it felt a huge responsibility to help.
That agility in a time of public health crisis has clearly paid off. Kry’s year-over-year growth in 2020 was 100% — meaning that the ~1.6M digital doctors appointments it had served up a year ago now exceed 3M. Some 6,000 clinicians are also now using its telehealth platform and software tools. (It doesn’t break out registered patient numbers).
Yet co-founder and CEO, Johannes Schildt, says that, in some ways, it’s been a rather quiet 12 months for healthcare demand.
Sure the pandemic has driven specific demand, related to COVID-19 — including around testing for the disease (a service Kry offers in some of its markets) — but he says national lockdowns and coronavirus concerns have also dampened some of the usual demand for healthcare. So he’s confident that the 100% growth rate Kry has seen amid the COVID-19 public health crisis is just a taster of what’s to come — as healthcare provision shifts toward more digital delivery.
“Obviously we have been on the right side of a global pandemic. And if you look back the mega trend was obviously there long before the pandemic but the pandemic has accelerated the trend and it has served us and the industry well in terms of anchoring what we do. It’s now very well anchored across the globe — that telemedicine and digital healthcare is a crucial part of the healthcare systems moving forward,” Schildt tells TechCrunch.
“Demand has been increasing during the year, most obviously, but if you look at the broader picture of healthcare delivery — in most European markets — you actually have healthcare usage at an all time low. Because a lot of people are not as sick anymore given that you have tight restrictions. So it’s this rather strange dynamic. If you look at healthcare usage in general it’s actually at an all time low. But telemedicine is on an upward trend and we are operating on higher volumes… than we did before. And that is great, and we have been hiring a lot of great clinicians and been shipping a lot of great tools for clinicians to make the shift to digital.”
The free version of Kry’s tools for clinicians generated “big uplift” for the business, per Schildt, but he’s more excited about the wider service delivery shifts that are happening as the pandemic has accelerated uptake of digital health tools.
“For me the biggest thing has been that [telemedicine is] now very well established, it’s well anchored… There is still a different level of maturity between different European markets. Even [at the time of Kry’s Series C round last year] telemedicine was maybe not something that was a given — for us it’s always been of course; for me it’s always been crystal clear that this is the way of the future; it’s a necessity, you need to shift a lot of the healthcare delivery to digital. We just need to get there.”
The shift to digital is a necessary one, Schildt argues, in order to widen access to (inevitably) limited healthcare resources vs ever growing demand (current pandemic lockdown dampeners excepted). This is why Kry’s focus has always been on solving inefficiencies in healthcare delivery.
It seeks to do that in a variety of ways — including by offering support tools for clinicians working in public healthcare systems (for example, more than 60% of all the GPs in the UK market, where most healthcare is delivered via the taxpayer-funded NHS, is using Kry’s tools, per Schildt); as well as (in a few markets) running a full healthcare service itself where it combines telemedicine with a network of physical clinics where users can go when they need to be examined in person by a clinician. It also has partnerships with private healthcare providers in Europe.
In short, Kry is agnostic about how it helps deliver healthcare. That philosophy extends to the tech side — meaning video consultations are just one component of its telemedicine business which offers remote consultations for a range of medical issues, including infections, skin conditions, stomach problems and psychological disorders. (Obviously not every issue can be treated remotely but at the primary care level there are plenty of doctor-patient visits that don’t need to take place in person.)
Kry’s product roadmap — which is getting an investment boost with this new funding — involves expanding its patient-facing app to offer more digitally delivered treatments, such as Internet Cognitive Based Therapy (ICBT) and mental health self-assessment tools. It also plans to invest in digital healthcare tools to support chronic healthcare conditions — whether by developing more digital treatments itself (either by digitizing existing, proven treatments or coming up with novel approaches), and/or expanding its capabilities via acquisitions and strategic partnerships, according to Schildt.
Over the past five+ years, a growing number of startups have been digitizing proven treatment programs, such as for disorders like insomnia and anxiety, or musculoskeletal and chronic conditions that might otherwise require accessing a physiotherapist in person. Options for partners for Kry to work with on expanding its platform are certainly plentiful — although it’s developed the ICBT programs in house so isn’t afraid to tackle the digital treatment side itself.
“Given that we are in the fourth round of this massive change and transition in healthcare it makes a lot of sense for us to continue to invest in great tools for clinicians to deliver high quality care at great efficiency and deepening the experience from the patient side so we can continue to help even more people,” says Schildt.
“A lot of what we do we do is through video and text but that’s just one part of it. Now we’re investing a lot in our mental health plans and doing ICBT treatment plans. We’re going deeper into chronic treatments. We have great tools for clinicians to deliver high quality care at scale. Both digitally and physically because our platform supports both of it. And we have put a lot of effort during this year to link together our digital healthcare delivery with our physical healthcare delivery that we sometimes run ourselves and we sometimes do in partnerships. So the video itself is just one piece of the puzzle. And for us it’s always been about making sure we saw this from the end consumer’s perspective, from the patient’s perspective.”
“I’m a patient myself and still a lot of what we do is driven by my own frustration on how inefficient the system is structured in some areas,” he adds. “You do have a lot of great clinicians out there but there’s truly a lack of patient focus and in a lot of European markets there’s a clear access problem. And that has always been our starting point — how can we make sure that we solve this in a better way for the patients? And then obviously that involves us both building strong tools and front ends for patients so they can easily access care and manage their health, be pro-active about their health. It also involves us building great tools for clinicians that they can operate and work within — and there we’re putting way more effort as well.
“A lot of clinicians are using our tools to deliver digital care — not only clinicians that we run ourselves but ones we’re partnering with. So we do a lot of it in partnerships. And then also, given that we are a European provider, it involves us partnering with both public and private payers to make sure that the end consumer can actually access care.”
Another batch of startups in the digital healthcare delivery space talk a big game about ‘democratizing’ access to healthcare with the help of AI-fuelled triage or even diagnosis chatbots — with the idea that these tools can replace at least some of the work done by human doctors. The loudest on that front is probably Babylon Health.
Kry, by contrast, has avoided flashy AI hype, even though its tools do frequently incorporate machine learning technology, per Schildt. It also doesn’t offer a diagnosis chatbot. The reason for its different emphasis comes back to the choice of problem to focus on: Inefficiencies in healthcare delivery — with Schildt arguing that decision-making by doctors isn’t anywhere near the top of the list of service pain-points in the sector.
“We’re obviously using what would be considered AI or machine learning tools in all products that we’re building. I think sometimes personally I’m a bit annoyed at companies screaming and shouting about the technology itself and less about what problem you are solving with it,” he tells us. “On the decision-support [front], we don’t have the same sort of chatbot system that some other companies do, no. It’s obviously something that we could build really effortlessly. But I think — for me — it’s always about asking yourself what is the problem that you’re solving for? For the patient. And to be honest I don’t find it very useful.
“In many cases, especially in primary care, you have two categories. You have patients that already know why they need help, because you have a urinary tract infection; you had it before. You have an eye infection. You have a rash — you know that it’s a rash, you need to see someone, you need to get help. Or you’re worried about your symptoms and you’re not really sure what it is — and you need comfort. And I think we’re not there yet where a chatbot would give you that sort of comfort, if this is something severe or not. You still want to talk to a human being. So I think it’s of limited use.
“Then on the decision side of it — sort of making sure that clinicians are making better decisions — we are obviously doing decision support for our clinicians. But if it’s one thing clinicians are really good at it’s actually making decisions. And if you look into the inefficiencies in healthcare the decision-making process is not the inefficiency. The matching side is an inefficiency side.”
He gives the example of how much the Swedish healthcare system spends on translators (circa €200M) as a “huge inefficiency” that could be reduced simply — by smarter matching of multilingual clinicians to patients.
“Most of our doctors are bilingual but they’re not there at the same time as the patient. So on the matching side you have a lot of inefficiency — and that’s where we have spent time on, for example. How can we sort that, how can we make sure that a patient that is seeking help with us ends up with the right level of care? If that is someone that speaks your native language so you can actually understand each other. Is this something that could be fully treated by a nurse? Or should it be directly to a psychologist?”
“With all technology it’s always about how do we use technology to solve a real problem, it’s less about the technology itself,” he adds.
Another ‘inefficiency’ that can affect healthcare provision in Europe relates to a problematic incentive to try to shrink costs (and, if it’s private healthcare, maximize an insurer’s profits) by making it harder for patients to access primary medical care — whether through complicated claims processes or by offering a bare minimum of information and support to access services (or indeed limiting appointment availability), making patients do the legwork of tracking down a relevant professional for their particular complaint and obtaining a coveted slot to see them.
It’s a maddening dynamic in a sector that should be focused on making as many people as healthy as they possibly can be in order that they avoid as much disease as possible — obviously as that outcome is better for the patients themselves. But also given the costs involved in treating really sick people (medical and societal). A wide range of chronic conditions, from type 2 diabetes to lower back pain, can be particularly costly to treat and yet may be entirely preventable with the right interventions.
Schildt sees a key role for digital healthcare tools to drive a much needed shift toward the kind of preventative healthcare that would be better all round, for both patients and for healthcare costs.
“That annoys me a lot,” he says. “That’s sometimes how healthcare systems are structured because it’s just costly for them to deliver healthcare so they try to make it as hard as possible for people to access healthcare — which is an absurdity and also one of the reasons why you now have increasing costs in healthcare systems in general, it’s exactly that. Because you have a lack of access in the first point of contact, with primary care. And what happens is you do have a spillover effect to secondary care.
“We see that in the data in all European markets. You have people ending up in emergency rooms that should have been treated in primary care but they can’t access primary care because there’s no access — you don’t know how to get in there, it’s long waiting times, it’s just triaged to different levels without getting any help and you have people with urinary tract infections ending up in emergency rooms. It’s super costly… when you have healthcare systems trying to fend people off. That’s not the right way doing it. You have to — and I think we will be able to play a crucial role in that in the coming ten years — push the whole system into being more preventative and proactive and access is a key part of that.
“We want to make it very, very simple for the patients — that they should be able to reach out to us and we will direct you to the right level of care.”
With so much still to do tackling the challenges of healthcare delivery in Europe, Kry isn’t in a hurry to expand its services geographically. Its main markets are Sweden, Norway, France, Germany and the UK, where it operates a healthcare service itself (not necessarily nationwide), though it notes that it offers a video consultation service to 30 regional markets.
“Right now we are very European focused,” says Schildt, when asked whether it has any plans for a U.S. launch. “I would never say that we would never go outside of Europe but for here and now we are extremely focused on Europe, we know those markets very, very well. We know how to manoeuvre in the European systems.
“It’s a very different payer infrastructure in Europe vs the US and then it’s also so that focus is always king and Europe is the mega market. Healthcare is 10% of the GDP in all European markets, we don’t have to go outside of Europe to build a very big business. But for the time being I think it makes a lot of sense for us to stay focused.”
Disasters are, unfortunately, a growth business, and the frontlines that were once distant have moved much closer to home. Wildfires, hurricanes, floods, tornadoes — let alone a pandemic — has forced much of the United States and increasingly large swaths of the world to confront a new reality: few places are existentially secure.
How we respond to crises can radically adjust the ledger of mortality for the people slammed by these catastrophes. Good information, fast response, and strong execution can mean the difference between life and death. Yet, frontline workers often can’t get the tools and training they need, particularly new innovations that may not wind their way easily through the government supply chain. Perhaps most importantly, they often need post-traumatic care far after a disaster his dissipated.
Risk & Return is a unique venture fund and philanthropic hybrid that has set its mission to seek and finance the next-generation of technologies to help first responders not only on the frontlines, but even after as they confront the strains both physical and mental from missions they undertake.
The family of organizations sees a spectrum from emergency workers in the United States to U.S. military veterans, all of whom share similar challenges and need solutions today — solutions that can often be hard to finance for traditional VCs who aren’t aware of the unique needs of this community.
The group was founded by Robert Nelsen, who made his name as a co-founder and managing director of biotech VC leader ARCH Venture Partners, which last year announced a $1.5 billion pair of funds. He’s joined by board chairman Bob Kerrey, the former co-chair of the 9/11 Commission as well as former governor and senator of Nebraska, and managing director Jeff Eggers, a Navy SEAL who served as senior director of Afghanistan and Pakistan on President Barack Obama’s National Security Council.
Nelsen had been thinking through the idea when he met Kerrey, who recalled the conversation happening during a fundraising event for Navy SEALs. “There has been a lot of suffering for those who have been on the frontlines,” Kerrey said. “Bob had this idea, and I thought it was a really smart idea, to try to take a different approach to philanthropic efforts.” They linked up with Eggers and the trio brought Risk & Return to fruition.
The venture fund is $25 million, with about 35% of it already deployed. The fund has had a big emphasis on mental health for first responders, with 75% of the companies funded broadly in that category.
The fund’s first investment was into Alto Neuroscience, which is developing precision medicine tools to treat post-traumatic stress. The fund has also invested in behavioral management startup NeuroFlow; alternative well-being assessment tool Qntfy; Spear Human Performance, which is a brand-new spinout focused on connecting commercial and health data sources to optimize human performance; and Xtremity, which is designing better connection sockets for prosthetics. The fund has invested in another six startups including Perimeter, which I profiled a few weeks ago.
This isn’t your typical venture portfolio, and that’s exactly what Risk & Return wants to focus on. Eggers said that “We love that type of technology since it has that dual purpose: going to serve the first responder on the ground, but the community is also going to benefit.”
While many of the startups the firm has invested in obviously have a focus on first responders, the technologies they develop don’t have to be limited to just that market. Kerrey noted that “Every veteran is a civilian, [and] these aren’t businesses targeting the military market.” Given the last year, “it’s hard to find a human being in this pandemic that hasn’t suffered at least some PTSD,” referencing post-traumatic stress disorder. Sales to governments can be incredibly challenging, and the ultimate market for the kinds of specialized mental health services that frontline workers need may not be as commercially viable as one would hope.
While the government does research and innovation in this category, Kerrey sees a huge opportunity for the private sector to get more involved. “One thing that you could do in the private sector that is difficult in the public sector is look for alternative therapies for PTSD,” he said, noting that areas like psychedelics have intrigued the private sector even while the government would mostly not touch the category today. Risk & Return has not made an investment in that space at this time though.
Half of the returns from the fund will stream into Risk & Return’s philanthropic arm, which writes grants to charities along the same thesis of aiding frontline workers both on the job and after it. The organizations hope that by approaching the complicated response space with a multi-pronged approach, they can match potential needs with different sources of capital that are most appropriate.
We’ve increasingly seen this hybrid for-profit/non-profit venture model in other areas. Norrsken is a Swedish foundation and venture fund that is investing in areas like mental health, climate change, and other categories from the UN Sustainable Development Goals. MIT Solve is another program that is working on hybrid approaches to startup innovation, such as in pandemics and health security. While disasters are always looming, it’s great to see more innovation in financing this critical category of technology, such as in pandemics and health security.
Faculty, a VC-backed artificial intelligence startup, has won a tender to work with the NHS to make better predictions about its future requirements for patients, based on data drawn from how it handled the COVID-19 pandemic.
In December 2019, Faculty raised a $10.5M Series A funding round from UK-based VCs Local Globe, GMG Ventures, and, Jaan Tallinn, one of Skype’s founding engineers, giving it a valuation of around $100 million.
Faculty will work with NHS England and NHS Improvement to build upon the Early Warning System (EWS) it developed for the service, during the pandemic. Based on Bayesian hierarchical modeling, Faculty says the EWS uses aggregate data (for example, COVID-19 positive case numbers, 111 calls, and mobility data) to warn hospitals about potential spikes in cases so they can divert staff, beds, and equipment needed. This learning will now be applied across the whole of the service, for issues other than the pure pandemic response, such as improving service delivery and patient care and predicting A&E demand and winter pressures.
Faculty also worked with NHSX as a partner for the NHS AI Lab, which developed the National COVID-19 Chest Imaging Database (NCCID).
Faculty has also reportedly worked with the UK Home Office to apply AI to its database of terrorists, as well as the BBC and easyJet.
I asked Richard Sargeant, COO of Faculty, if he thought Faculty was the ‘Palantir for the UK’ (Palantir has also worked with the NHS during the pandemic: “We are, I believe, a really effective and scalable AI company, not just for the UK but we’re working in the US and in Europe, Asia. I think we will continue to scale. We’re growing, and we’re going to grow because I believe that AI can make things better for the citizens, for customers. Palantir doesn’t really do AI, they do data engineering in a big way. And we’ve seen them be effective in the NHS. I think Faculty kind of stands on its own.”
He said that Faculty has a different role to Palantir: “Palantir has helped with the data pipelines, and they’re using their software to pull a lot of data together, but really they’re not a machine learning organization, their specialism is in gathering data together. Data across the NHS is rather an archipelago. It’s in hundreds of different places, and being able to gather together makes it much easier to do machine learning, both centrally and at a local level. One of the things that sets the early warning system apart is not just the use of machine learning, but the use of explainability to give clinicians and managers, some understanding of why the models are forecasting the results that they are, which is relatively cutting edge stuff, and that’s the stuff that Faculty specializes in that Palantir doesn’t.”
I asked him why Faculty had attracted VC when, typically, VCs invest in startups that have scalable products: “It’s a good question and it’s something that we often get asked. I see Faculty as a little bit different from your classic software as a service business, and from a consultancy. AI isn’t a ‘once and done’ product, and neither is it something that people create from scratch every time. But there are core components of what we do, that we can use again and again, but also the models themselves are always bespoke… it’s a combination of the bespoke, and the common, or generic together, that makeup Faculty, and that’s a bit different.”
Faculty is not a stranger to controversy over its government contracts. Last year it was revealed that a a U.K. cabinet minister owned £90,000 of shares in Faculty, when it was awarded a £2.3 million contract from NHSX to help run the NHS COVID-19 Data Store.
A biotech company, that has spent 11 years researching supplements to increase human longevity, plans to launch its supplements later this year. Longevica says it has attracted a total of $13 million from investors including, Alexander Chikunov, a longevity investor, who is also president of the company.
Longevica says it created a biotechnology platform for longevity after researching the life-span of laboratory mice. It now aims to produce medicines, dietary supplements, and food products.
The longevity space is a growing sector for tech startups. Google backed the launch of Calico in the space. Late last year Humanity Inc. raised $2.5 million in a round led by Boston fund One Way Ventures for its longevity company that will leverage AI to maximize people’s healthspan.
Longevica’s CEO Aynar Abdrakhmanov, backing up his company’s aim to tap the desire for people to live longer, said: “According to the WHO, by 2050, 2 billion people will be 60+ years old. By 2026, the sales of services and products for this audience will be around $27 trillion… By comparison, it was only $17 trillion in 2019.”
According to CB Insights, life-extension startups raised a record total of $800 million in 2018 alone. And there are some high-profile investors in the space.
PayPal co-founder Peter Thiel invested in Unity Biotechnology, which is developing drugs to treat diseases that accompany aging, has also raised significant funding. And Ethereum founder Vitalik Buterin invested $2.4 million worth of Ether into the nonprofit SENS Research foundation, where famed longevity research Aubrey de Grey is chief science officer, to develop rejuvenation biotechnologies.
Longevica is basing its platform on the work of scientist Alexey Ryazanov, who holds 10 US patents in the space, and a long-time researcher into the regulation of protein biosynthesis cells.
Chikunov said: “I gathered scientists known in this field to discuss their approaches to the problem. Then Alexey Ryazanov proposed the innovative idea of large-scale screening of all known pharmacological substances on long-lived mice in order to find those that prolong life.”
Under the leadership of Ryazanov, Longevica says it used 20,000 long-lived female mice and 1,033 drugs representing compounds from 62 pharmacological classes, to find five substances that statistically significantly increased longevity by 16-22%: Inulin, Pentetic Acid, Clofibrate, Proscillaridin A, D-Valine.
From this work, they formed a view about the elimination of certain heavy metals from the body and improve the body’s ability to remove toxins.
Electronic health records (EHR) have long held promise as a means of unlocking new superpowers for caregiving and patients in the medical industry, but while they’ve been a thing for a long time, actually accessing and using them hasn’t been as quick to become a reality. That’s where Medchart comes in, providing access to health information between businesses, complete with informed patient consent, for using said data at scale. The startup just raised $17 million across Series A and seed rounds, led by Crosslink Capital and Golden Ventures, and including funding from Stanford Law School, rapper Nas and others.
Medchart originally started out as more of a DTC play for healthcare data, providing access and portability to digital health information directly to patients. It sprung from the personal experience of co-founders James Bateman and Derrick Chow, who both faced personal challenges accessing and transferring health record information for relatives and loved ones during crucial healthcare crisis moments. Bateman, Medchart’s CEO, explained that their experience early on revealed that what was actually needed for the model to scale and work effectively was more of a B2B approach, with informed patient consent as the crucial component.
“We’re really focused on that patient consent and authorization component of letting you allow your data to be used and shared for various purposes,” Bateman said in an interview. “And then building that platform that lets you take that data and then put it to use for those businesses and services, that we’re classifying as ‘beyond care.’ Whether those are our core areas, which would be with your, your lawyer, or with an insurance provider, or clinical researcher — or beyond that, looking at a future vision of this really being a platform to power innovation, and all sorts of different apps and services that you could imagine that are typically outside that realm of direct care and treatment.”
Bateman explained that one of the main challenges in making patient health data actually work for these businesses that surround, but aren’t necessarily a core part of a care paradigm, is delivering data in a way that it’s actually useful to the receiving party. Traditionally, this has required a lot of painstaking manual work, like paralegals poring over paper documents to find information that isn’t necessarily consistently formatted or located.
“One of the things that we’ve been really focused on is understanding those business processes,” Bateman said. “That way, when we work with these businesses that are using this data — all permissioned by the patient — that we’re delivering what we call ‘the information,’ and not just the data. So what are the business decision points that you’re trying to make with this data?”
To accomplish this, Medchart makes use of AI and machine learning to create a deeper understanding of the data set in order to be able to intelligently answer the specific questions that data requesters have of the information. Therein lies their longterm value, since once that understanding is established, they can query the data much more easily to answer different questions depending on different business needs, without needing to re-parse the data every single time.
“Where we’re building these systems of intelligence on top of aggregate data, they are fully transferable to making decisions around policies for, for example, life insurance underwriting, or with pharmaceutical companies on real world evidence for their phase three, phase four clinical trials, and helping those teams to understand, you know, the the overall indicators and the preexisting conditions and what the outcomes are of the drugs under development or whatever they’re measuring in their study,” Bateman said.”
According to Ameet Shah, Partner at co-lead investor for the Series A Golden Ventures, this is the key ingredient in what Medchart is offering that makes the company’s offering so attractive in terms of long-term potential.
“What you want is you both depth and breadth, and you need predictability — you need to know that you’re actually getting like the full data set back,” Shah said in an interview. “There’s all these point solutions, depending on the type of clinic you’re looking at, and the type of record you’re accessing, and that’s not helpful to the requester. Right now, you’re putting the burden on them, and when we looked at it, we were just like ‘Oh, this is just a whole bunch of undifferentiated heavy lifting that the entire health tech ecosystem is trying to like solve for. So if [Medchart] can just commoditize that and drive the cost down as low as possible, you can unlock all these other new use cases that never could have been done before.”
One recent development that positions Medchart to facilitate even more novel use cases of patient data is the 21st Century Cures Act, which just went into effect on April 5, provides patients with immediate access, without charge, to all the health information in their electronic medical records. That sets up a huge potential opportunity in terms of portability, with informed consent, of patient data, and Bateman suggests it will greatly speed up innovation built upon the type of information access Medchart enables.
“I think there’s just going to be an absolute explosion in this space over the next two to three years,” Bateman said. “And at Medchart, we’ve already built all the infrastructure with connections to these large information systems. We’re already plugged in and providing the data and the value to the end users and the customers, and I think now you’re going to see this acceleration and adoption and growth in this area that we’re super well-positioned to be able to deliver on.”
Johannesburg-based investment company Founders Factory Africa (FFA) today announced a partnership with Small Foundation that will see it select 18 agritech startups for an acceleration and incubation program.
Small Foundation is a Dublin-based philanthropic organization that focuses on the rural and agriculture sector in sub-Saharan Africa. With this partnership, Small Foundation is making an undisclosed investment in FFA to build and scale agritech startups on the continent.
“The partnership stands to make a significant impact across the continent by supporting agritech startups who can innovate and improve the delivery of a range of services to smallholder farmers and micro, small and medium-sized enterprises in the agricultural sector,” an excerpt in a statement read.
According to the South African-based venture development and investment company founded by Roo Rogers and Alina Truhina, early-stage founders will need to apply to join the Founders Factory Africa Venture Scale or Venture Build portfolios. These startups will have access to funding between $100,000 to $250,000 and hands-on technical support.
This is a change from when the company launched in 2018. FFA is an extension of the Founders Factory organisation that has invested in more than 130 companies globally. In 2018, FFA launched its first vertical in fintech when it partnered with the continent’s largest bank, Standard Bank, to invest in fintech startups. Some of the startups include Bwala, LipaLater, MVXchange and OkHi.
The following year, it took on a second investor in South African healthcare company Netcare Group and, via the partnership, invested in health-tech startups like RxAll, Redbird and Wellahealth.
Last year when we reported this partnership, startups in FFA’s Venture Scale accelerator program received a £30,000 cash investment and £220,000 in support services. Those in the Venture Build program received £60,000 cash and £100,000 toward support.
For this third partnership, Truhina says FFA will be investing a total of $300,000 in cash and hands-on support for companies in its Venture Scale program. However, startups in Venture Build will be receiving up to $250,000 in funding.
The Venture Scale program involves providing support for existing startups operating in seed to pre-Series A stages. On the other hand, the Venture Build program is for founders wanting to launch a startup in Africa, who may or may not have a concept or an idea.
Currently, there are 23 companies across FFA’s Scale and Build portfolios. These startups, mainly from Ghana, Kenya, Nigeria and South Africa, have collectively raised more than $7 million during and after the program. Truhina says FFA plans to increase this number to nearly 90 startups in total by 2024.
“We will build, scale and invest in 88 startups with current FFA investors (Standard Bank, Netcare and Small Foundation) until 2024. We plan to continue to take on new investors and continue to work on the continent indefinitely,” she said.
While FFA is dedicating a fund for agritech startups, it has invested in other startups with agritech solutions for instance Nigeria’s Foodlocker. The company forecasts foodstuff demand through machine learning and helps buyers procure goods from smallholder farmers. But despite this proposition, FFA classifies the startup as a fintech investment.
“Foodlocker was a company we selected and invested in under our Fintech portfolio, as the startup has a financial component. With Small Foundation, we are setting up a new dedicated agritech sector,” said Truhina. Small Foundation joins Standard Bank and Netcare in the peculiarity of assistance offered to FFA portfolio startups. From sector expertise and footprint across the continent to access to clients, POCs and pilots, these investors are trying to fill in the gap in sectors ripe for exponential growth.
But though fintech has caught on well with both local and international investors, the same cannot be said for health tech and agritech. According to Briter Bridges, fintech accounted for 31% of the total $1.3 billion raised by African startups. Health-tech startups accounted for 9%, while agritech startups represented just 7%.
Small Foundation wants to improve this number in its own little way, and concurrently has a plan to “end extreme poverty in sub-Saharan Africa by 2030.” Conor Brosnan, the CEO and chair of the foundation, holds that tackling the sector’s biggest issues with the FFA will bring the company toward achieving this objective.
“This is a pivotal time to invest in the growing area of agritech in Africa, which has transformative potential for local livelihoods. We are excited to see FFA’s highly skilled teamwork with immensely talented African entrepreneurs to deliver scaled solutions to some of the biggest challenges faced by the sector,” he said.
In three years, Founders Factory Africa has managed to enlist the services and finances of three influential partners. Yet, it has 55 more startups to invest in before 2024, so we should expect an increased investment activity and more partnerships to fund startups in other sectors.
The firm also has fresh capital in the works for its portfolio companies as it advances, though. It’s in the process of raising a $35 million “Africa Seed Fund” which will exist alongside FFA and execute follow-on capital in some portfolio companies.
Being an expectant mom can be frightening, as can mothering an infant or toddler. The answers don’t come automatically, and while there’s no shortage of books and websites (and advice from grandparents) about how to parent at every stage, finding satisfying information often proves a lot harder than imagined.
There are online social groups that deliver some of the social and emotional support that new parents need, no matter where they live. There are many dozens of mom communities on Facebook, for example. However, it’s because there’s room for improvement on this theme — big groups can feel isolating, bad information abounds —that Oath Care, a young, four-person San Francisco-based startup, just raised $2 million in seed funding from XYZ Ventures, General Catalyst, and Eros Resmini, former CMO of Discord and managing partner of the Mini Fund.
What is it building? Founder Camilla Hermann describes it as a subscription-based mobile app that’s focused on improving the lives of new mothers by combining parents who have lots in common with healthcare specialists and moderators who can guide them in group chats, as well as one-on-one video calls.
More specifically, she says, for $20 per month, Oath matches pregnant and postpartum moms in circles of up to 10 based on factors like stage of pregnancy, age of child, location, and career so they can ask questions of each other, with the help of a trained moderator (who is sometimes a mother with older children).
Oath also pushes curriculum that Oath’s team is developing in-house to members based on each group’s specific needs. Not last, every group is given collective access to medical specialists who can answer general questions as part of the members’ subscription and who are also available for consultations when individualized help is needed.
Hermann says the pricing of these 15-minute-long consultations is still being developed, but that the medical experts with whom it’s already working see the app as a form of lead generation.
It’s an interesting concept, one that could be taken in a host of directions, acknowledges Hermann who says she was inspired to cofound the company based on earlier work developing a contact tracing technology created to track outbreaks like Ebola in real time.
As she said yesterday during a Zoom call with TechCrunch and her cofounder, Michelle Stephens, a pediatric clinician and research scientist: “We’ve fundamentally misunderstand something really important about health in the West; we think that [changes] happen to one person at a time or one part of the body at a time, but it always happens in interconnected systems both inside and outside the body, which fundamentally means that it is always happening in community.”
For her part, Stephens — who was introduced to Hermann at a dinner years ago — says her motivation in cofounding Oath was born out of research into childhood stress, and that by “better equipping parents to be those positive consistent caregivers in their child’s life,” Oath aims to help enable stronger, more intimate child-parent bonds.
It might sound grand for a mobile app, but it also sounds like a smart starting point. Though the idea is to match mothers in similar situations at the outset to help bolster theirs and their children’s health, it’s easy to imagine the platform evolving in a way that brings together parents in numerous groups based on interests, from preschool applications to autism to same-sex parenting. It’s easy to see the platform helping to sell products that parents need. It’s easy to imagine the company amassing a lot of valuable information.
Indeed, says Hermann, the longer-term vision for Oath is to create rich datasets that it hopes can be used to improve health outcomes, including by identifying health issues earlier. Relatedly, it also hopes to build relationships with health systems and payers in order to increase access to its products.
For now, Oath is mostly just trying to keep up with demand. Hermann says the “small and scrappy” company found its first 50 users through Facebook ads, and that this base quickly tripled organically before Oath was forced to create a growing waitlist for what has been a closed beta until now. (Oath is “anticipating a full launch in late summer,” says Stephens.)
That’s not to say the company isn’t thinking at all about next steps.
While right now it is “laser focused on building out the most exceptional experience for this specific cohort of users in this specific period of time of their lives,” says Hermann, once it builds out many more communities of small trusted groups with “high engagement and high trust,” there is “a lot you can layer on top of that. It’s virtually limitless.”
Third-party hardware integration can be a tricky thing. Peloton this week raised some eyebrows by dropping Apple GymKit compatibility for its Bike Bootcamp program. Users were, naturally, quick to react. The situation left some wondering whether the move was a direct response to Apple’s recent entry into the home exercise market with Fitness+.
A Peloton spokesperson offered the following statement to TechCrunch, “Apple GymKit is designed to work with equipment-based cardio workouts. However, Peloton recently implemented GymKit with Bike Bootcamp, a multi-disciplinary class type that combines strength and cardio, which the feature does not support. Members can still use GymKit to sync their cycling-only workouts to their Apple Watch from the Bike+.”
The comment appears to reflect one of the bigger issues with its initial GymKit implementation. Designed with the gym in mind, Apple’s program engages with specific exercise equipment. In other words, use the integration on the treadmill and the Watch specifically goes to work tracking run metrics. Use it with a bike and it tracks cycling.
A program like Bike Bootcamp complicates things, adding to the mix things like weightlifting. Likely that didn’t quite mesh with the third-party guidelines around GymKit implementation. The bigger issue for Peloton owners is that GymKit was a primary distinguisher between the standard Peloton bike and the Bike+ — two products with a $500 gulf between them.
Truth is, for now at least, working together is still a net positive for both parties. Apple may have its own fitness platform, but Peloton has a huge footprint — one that likely has significant overlap with Apple Watch users. GymKit may have been developed with gyms in mind, but people haven’t visited the gym much in the past year, and there’s a reasonable expectation that the industry might never entirely bounce back.
For Peloton’s part, it’s probably good to play nice with the company that utterly dominates the smartwatch category.