By MATTHEW HOLT
It’s JPM week. Meaning 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 search 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 children searching for free booze and meals try 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, similar to final week’s Basic 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 need to speak about 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. Girls & minorities discover it laborious 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 laborious 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 develop 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 in the end. And at a JPM occasion I bumped into a few of Joanna Strober’s workforce, reminding me that I assumed 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 up to now) and likely a number of extra I’m forgetting. However on the whole they’re the exceptions.
What’s not the exception is the tech bros elevating for AI. Clearly the large gamers listed here 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 based mostly on a maybe legendary AI ample 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’s going to clear up 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 the least the tune of $17m in unpaid payments in keeping with 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 buyers who’s misplaced over $200m? Not within the least. The identical buyers A16Z and Basic Catalyst gave him one other $50m straight away to construct an AI nurse chatbot firm, and apparently well being techniques are lining as much as purchase it in keeping with 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 observed that Ali Parsa who went by over $1 billion and crucified all his public market buyers too when Babylon Well being cratered can also be again. His new firm – an AI assistant launched with some well-known medical doctors 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 a bit of controversy about whether or not Babylon’s demise was only a collection 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 possibly can google Sergei Polevikov’s opinion!)
Look, not like Lisa Bari at The Well being Tech Discuss Present, I like the concept of getting AI to reply sufferers’ questions, name them with data 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) had been doing 15 years in the past. And there’s big chance in utilizing AI to really diagnose and deal with. I’m positive 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 right away 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 buyers?
However I suppose we’ve got our reply already. Adrian Aoun took a giant swing with Ahead and closed it after shedding $650m and leaving sufferers within the lurch with no discover and 200 folks unemployed. He was again on a podcast days later saying his buyers wished to provide him extra to start out once more. And the most important loser, chaos agent and conman of latest years, Adam Nuemann of WeWork infamy, was again very quickly after with one other $350m for yet 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 at the least some VCs have determined, there’s no disgrace.
(For those who’re questioning about this piece’s title, I’m riffing off this blues traditional)