By MATTHEW HOLT
It’s JPM week. Which means a ton of startup bros wandering round San Francisco questioning who all of the biotech guys and funding banker greyhairs are and why they’re nonetheless sporting fits.
Unlikely to be sporting fits are the digital well being children and the VCs they’re attempting to seek out. The glory days are lengthy gone. Athenahealth and Venrock are not having competing events (or events in any respect) and a lot of the ravenous startup children on the lookout for free booze and meals try to scrounge invitations to regulation companies who’re nonetheless charging $1500 an hour for affiliate time earlier than their shoppers discover that ChatGPT will do the identical for $20 a month.
However enterprise in digital well being continues on, even when a lot of it’s subtexting cramdown M&A, equivalent to final week’s Common Catalyst deal funding Transcarent’s takeover of Accolade. However I’m not likely right here to speak concerning the digital well being VC market per se.
What I do wish to speak about is who’s getting VC. This was prompted (to my gradual Small Language Mannequin) by a feminine pal who has been a CEO and was as soon as a star at a quick rising digital well being firm. She instructed me that being feminine was now an energetic hindrance to elevating cash. Each time some tech bro on LinkedIn says how they raised $XXm in 12 minutes with no pitch deck, you’ll see a number of feminine CEOs explode in anger.
You don’t want me to repeat the numbers. Ladies & minorities discover it exhausting to boost cash. First time founders get a large run round. Even when issues have been loopy in 2020-2022 the survey of startups I ran confirmed that it was very exhausting for early stage corporations to boost cash. Now it’s the apocalypse.
That’s to not say some feminine CEOs aren’t elevating. Simply final week Nema Well being run by former Well being 2.0 star intern (and now practising Psychiatrist–which can be extra related!) Sofia Noori raised $14m Collection A to broaden its wonderful PTSD treatment program. Maven’s Kate Ryder raised one other $125m late final yr to maintain increasing their girls’s well being program, and have to be viewing that elusive IPO eventually. And at a JPM social gathering I bumped into a few of Joanna Strober’s staff, reminding me that I believed Midi Well being had maybe raised an excessive amount of cash when it pulled down one other $60m final yr–however apparently it’s going gangbusters. There’s additionally Equip for consuming problems with Kristina Saffran & Erin Parks on the helm (over $95m in to date) and likely a couple of extra I’m forgetting. However usually they’re the exceptions.
What’s not the exception is the tech bros elevating for AI. Clearly the massive gamers listed below are OpenAI, Anthropic et al knocking down billions to construct their AI infrastructure. Anybody with a 401K might be hoping that each one works out given how a lot of the worth of Nvidia, Tesla, Google, Meta, Microsoft & Apple appears to be primarily based on a maybe legendary AI plentiful future. However there’s a lot in well being care. Simply this week Innovaccer ($275m), Qventus ($105m) & Truveta ($320m) all backed up the truck, all to mix knowledge, AI and hope it’ll clear up a few of well being care’s troubles.These CEOs are males. However that’s not what I’m complaining about.
You too can be a person and get away with much more. Hippocratic AI’s CEO Manjul Shah ran his final firm HealthIQ into the bottom. He screwed over suppliers, staff and clients to no less than the tune of $17m in unpaid payments based on Katie Jennings at Forbes, then took one other $170k personally out of the bankrupt firm after he’d left. Was he a pariah to the traders who’s misplaced over $200m? Not within the least. The identical traders A16Z and Common Catalyst gave him one other $50m straight away to construct an AI nurse chatbot firm, and apparently well being programs are lining as much as purchase it based on a podcast he was on with Julie Yoo of A16Z final week. This week Kleiner Perkins (and extra) kicked in one other $141m.
You may additionally have seen that Ali Parsa who went by way of over $1 billion and crucified all his public market traders too when Babylon Well being cratered can also be again. His new firm – an AI assistant launched with some well-known docs together with Shafi Ahmed – is known as Quadrivia AI. Funding isn’t clear however Sifted discovered some filings that point out a Swedish VC is behind it.There’s additionally greater than slightly controversy about whether or not Babylon’s demise was only a sequence of dangerous enterprise choices or Parsa was mendacity concerning the tech. (I had Parsa on a few panels and all the time discovered him deferential and charming, however you’ll be able to google Sergei Polevikov’s opinion!)
Look, in contrast to Lisa Bari at The Well being Tech Speak Present, I really like the thought of getting AI to reply sufferers’ questions, name them with info and usually use bots so as to add “abundance” to the well being care workforce. I imply it’s simply an extension of what Alex Drane and Eliza (and Silverlink & others) have been doing 15 years in the past. And there may be big chance in utilizing AI to really diagnose and deal with. I’m certain Parsa’s new AI bot additionally has the potential to enhance doctor care.
However ought to it’s that simple for guys like Shah and Parsa to instantly get again within the recreation given the chaos they left of their wake? Shouldn’t VCs have some qualms about anointing as saviours the very individuals who simply screwed over their earlier clients, companions, staff and traders?
However I suppose we’ve got our reply already. Adrian Aoun took an enormous swing with Ahead and closed it after dropping $650m and leaving sufferers within the lurch with no discover and 200 folks unemployed. He was again on a podcast days later saying his traders needed to provide him extra to start out once more. And the most important loser, chaos agent and conman of current years, Adam Nuemann of WeWork infamy, was again very quickly after with one other $350m for one more actual property startup.
Neumann’s benefactor within the newest spherical was A16Z’s Mark Andreesen. Andreesen additionally famously helped fund Trump’s election in 2024. That’s the most important comeback of somebody with no morals, ethics or competence ever.
So I suppose no less than some VCs have determined, there’s no disgrace.
(If you happen to’re questioning about this piece’s title, I’m riffing off this blues traditional)
