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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 youngsters and the VCs they’re making an attempt to seek out. The glory days are lengthy gone. Athenahealth and Venrock are now not having competing events (or events in any respect) and many of the ravenous startup youngsters on the lookout for free booze and meals are attempting to scrounge invitations to legislation corporations who’re nonetheless charging $1500 an hour for affiliate time earlier than their purchasers 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 General Catalyst deal funding Transcarent’s takeover of Accolade. However I’m probably not right here to speak in regards to the digital well being VC market per se.
What I do need to discuss is who’s getting VC. This was prompted (to my sluggish Small Language Mannequin) by a feminine buddy who has been a CEO and was as soon as a star at a quick rising digital well being firm. She informed 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 plenty of feminine CEOs explode in anger.
You don’t want me to repeat the numbers. Ladies & minorities discover it onerous to boost cash. First time founders get an enormous run round. Even when issues had been loopy in 2020-2022 the survey of startups I ran confirmed that it was very onerous for early stage firms 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 working towards Psychiatrist–which can be extra related!) Sofia Noori raised $14m Sequence A to expand its amazing PTSD cure program. Maven’s Kate Ryder raised another $125m late final 12 months to maintain increasing their girls’s well being program, and have to be viewing that elusive IPO eventually. And at a JPM celebration I bumped into a few of Joanna Strober’s staff, reminding me that I assumed Midi Well being had maybe raised an excessive amount of cash when it pulled down another $60m last year–however apparently it’s going gangbusters. There’s additionally Equip for consuming problems with Kristina Saffran & Erin Parks on the helm (over $95m in so far) and likely just a few 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 every 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 loads in well being care. Simply this week Innovaccer ($275m), Qventus ($105m) & Truveta ($320m) all backed up the truck, all to mix information, AI and hope it would remedy a few of well being care’s troubles.These CEOs are males. However that’s not what I’m complaining about.
You may also 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 prospects to at least the tune of $17m in unpaid bills based on Katie Jennings at Forbes, then took another $170k personally out of the bankrupt company 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 instantly to construct an AI nurse chatbot firm, and apparently well being methods 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 more) kicked in another $141m.
You may also have seen that Ali Parsa who went via over $1 billion and crucified all his public market traders too when Babylon Well being cratered can be again. His new firm – an AI assistant launched with some well-known docs together with Shafi Ahmed – is named Quadrivia AI. Funding isn’t clear however Sifted found some filings that indicate a Swedish VC is behind it.There’s additionally greater than a little bit controversy about whether or not Babylon’s demise was only a sequence of dangerous enterprise choices or Parsa was mendacity in regards to the tech. (I had Parsa on a few panels and at all times discovered him deferential and charming, however you may google Sergei Polevikov’s opinion!)
Look, in contrast to Lisa Bari at The Well being Tech Discuss Present, I really like the thought of getting AI to reply sufferers’ questions, name them with data and customarily 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) had been doing 15 years in the past. And there’s large risk in utilizing AI to truly diagnose and deal with. I’m positive Parsa’s new AI bot additionally has the potential to enhance doctor care.
However ought to or not it’s that straightforward for guys like Shah and Parsa to instantly get again within the sport 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 prospects, companions, staff and traders?
However I suppose we’ve our reply already. Adrian Aoun took an enormous swing with Ahead and closed it after losing $650m and leaving patients in the lurch with no notice and 200 individuals unemployed. He was again on a podcast days later saying his traders wished to offer him extra to begin once more. And the largest loser, chaos agent and conman of latest years, Adam Nuemann of WeWork infamy, was again very quickly after with one other $350m for yet another real estate 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 largest comeback of somebody with no morals, ethics or competence ever.
So I suppose no less than some VCs have determined, there’s no disgrace.
(When you’re questioning about this piece’s title, I’m riffing off this blues classic)
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