10 of the most exciting digital health startups of 2024, according to VCs | TechCrunch

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 stable 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 the companies that were and were not in their portfolios.

Summarize

What it does: Use AI to automate medical records Based on the conversation 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: Established in 2019, Codametrics Uses AI to automate medical coding. The company’s technology converts 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 It speeds up 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 Cohair is currently a leader in this space, but other startups that accelerate health insurance approvals for medical conditions include of the past 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 looking to start independent practices with patients and insurers. Founded in 2020, the startup uses the 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 is growing as fast as its name suggests.

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 Equipped 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: Approximately 10% of the U.S. population will develop an eating disorder in their lifetime, but only a fraction of these receive help. According to the National Eating Disorders AssociationThe company’s offering is for people who don’t live near an eating disorder center or prefer to get 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 It also provides services to Medicaid patients.

Why it’s promising: Investors say 10-year-old Maven continues to grow even as its focus area — digital health services for women and families — has historically been underserved. V.C.’s interest in women’s health has grown In recent years, the US Supreme Court’s decision to overturn the Roe vs. Wade case 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 Virtual provides 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: Established in 2020, SmarterDX uses AI to help hospitals avoid missing out on revenue by analyzing patients’ lab results, medications and doctors’ notes to spot minor errors and omissions in patients’ diagnoses and associated medical codes. The company’s technology checks the accuracy of a patient’s chart 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 Series B The round was 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 child Summer Health Connects parents with pediatricians who respond to emergency care and behavioral concerns within minutes. The company offers its text messaging service directly to consumers and through employers who offer 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 Transcurrent 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 Teladoc acquired in 2008. $18.5 billion in 2020,

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.