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BFD Expert Voices - Health Tech Deals

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Fertility financing support startup Sunfish Technologies wants to make it easier and less costly for people with reproductive challenges to start a family.

Why it matters: The company recently closed on a $3.8 million seed round led by Walkabout Ventures with participation from Hannah Grey VC and Fiat Ventures, CEO Angela Rastegar tells Erin exclusively. 

Details: The company will use the funds to better predict the costs associated with in-vitro fertilization (IVF) and egg freezing, and to better match people with ideal lending partners.

How it works: Based in Santa Monica, California, Sunfish plans to crunch data associated with customer behavior, treatment costs, health profiles and success probability to offer support for fertility treatments.

The startup currently offers loans and lines of credit up to $100,000.

It partners with organizations including Gays with Kids, Frame Fertility, Carrot and Men Having Babies, as well as with surrogacy agencies, egg banks and IVF clinics.

Yes, but: Available data on factors contributing to infertility is narrow and can limit the accuracy of prediction tools — something Sunfish hopes to indirectly improve by boosting the accessibility of assisted reproduction technologies.

Most IVF cycle data is limited to white women in Western European countries, and good-quality data on male infertility factors, such as sperm DNA degradation, is lacking.

"That’s an industrywide gap; we don't have an immediate solution," Rastegar says, "but as we support more and more families who are more diverse financially and ethnically, we hope to help improve this industry and its outcomes overall."

By the numbers: The global fertility market was valued at $26.9 billion in 2020 and is projected to nearly double to $45.4 billion by 2027, per a recent Precedence Research report.

Meanwhile, fewer than half of U.S. states have fertility insurance coverage laws and only a quarter of U.S. employers pay for IVF treatment, per a 2020 Kaiser Family Foundation report. 

Sunfish has thus far received more than $20 million in loan requests across hundreds of applicants in 32 states and aims to have customers in all 50 in the next few years, Rastegar says.

State of play: As the fertility tech sector booms (see Oula, Turtle, Legacy, Ruth and Apryl), so too are startups that straddle fintech and health tech. Several fertility financing companies, including Spring Fertility and Shady Grove, even offer to share in the risk associated with the process. 

London-based fertility financing startup Gaia last February debuted personalized IVF insurance and raised $20 million in Series A capital.

San Francisco-based Future Family, a startup combining fertility financing and care support, in April banked $25 million in Series B funding at a valuation of $80 million.

Surrogacy-matching startup Nodal in September launched with $4.7 million in seed funding.

What they're saying: Rastegar and Sunfish's investors say fertility treatment is an opaque, confusing and expensive sector of the health care industry that can contribute to inequity.

"We believe the ability to build a family is a basic human right," Rastegar says.

"Sunfish’s approach provides forward-thinking risk assessment for lenders and the ability to expand access to capital for the borrowers — aspiring parents," says Hannah Grey founding partner Jessica Peltz-Zatulove.

What's next: Although Sunfish is currently focused on financial support for IVF and egg freezing, Rastegar aims for the company to eventually offer families support from pre-conception all the way through childhood.

"The stress of this process is not just the cost but the unknowns of what it’s going to take to get across the finish line, in terms of how many children you want, whether you're willing to work with a surrogate, all of those things," Rategar says. "Our goal is to help people identify their goals and plan for that."

🐡 One fun thing: In the wild, female sunfish produce as many as 300 million eggs at a time, more than any other known vertebrate.

1 big thing: Sunfish seeds $4M for fertility funding

Illustration of a stroller with money inside of it.

Remote health monitoring company Biofourmis is pushing beyond technology as it moves into providing care, CEO Kuldeep Singh Rajput told Erin at the J.P. Morgan Healthcare Conference.

Why it's the BFD: It's a good time to be a care provider, with plenty of market appetite for true tech-enabled assets.  

As a partner to health systems, Biofourmis combines AI-based data analytics and remote monitoring tools to track patients' medical progress, particularly after they've undergone hospital treatment. 

Details: Per public documents, the company is currently registered in seven states (Massachusetts, Pennsylvania, Florida, Maryland, North Carolina, Ohio and New Jersey).

In total, the company has "between 15 and 18 million covered lives," Singh Rajput said.

What they're saying: "We see ourselves in the future as a provider. We are building a specialty network of physicians," Singh Rajput said during last Monday's virtual health panel at the conference.

"We now have two go-to-market strategies," he told Erin after the presentation.

As a health system partner: "As an enabler, we're a turn-key solution to let health system partners deliver care in the home," he said.

As a care provider: The company is looking specifically to provide services spanning cardiology, oncology and skilled nursing at home, he added.

Driving the news: The acute hospital-at-home program — which allows treatment for common acute conditions in home settings — was recently extended beyond the COVID pandemic, a sign that Singh Rajput took to mean that care is staying in the home — at least for the foreseeable future.

Catch up quick: Biofourmis in August raised $320 million in Series D capital at a valuation of nearly $1.3 billion. General Atlantic led the original $300 million investment, and Intel Capital added an extension in the form of $20 million.

The company in February unveiled its Care at Home platform for treating heart failure, atrial fibrillation, diabetes and hypertension.

What's next: "As we become a provider we will have to build a national network and retain them. That's our biggest challenge," Singh Rajput told Erin.

"We'll pick a couple of states and a couple of use-cases, and next year we'll scale," he added.

💭 Erin's thought bubble: Biofourmis' strategy is further validated by CVS' $8 billion acquisition of home care provider Signify Health.

 Biofourmis' new strategy resembles a specialized Signify, and CVS is counted among Biofourmis' investors. Could a merger down the road make sense? 

2. The BFD: Biofourmis pushes to become provider

Illustration of a doormat with a red cross outside a front door.

Clinical diagnoses and decisions could someday be made by machines rather than by doctors. And that creates opportunity for investors, Axios' Dan Primack writes. 

Driving the news: ChatGPT recently passed all three parts of the U.S. Medical Licensing Examination, although just barely, as part of a research experiment.

Second-year medical students often spend hundreds of hours preparing for Part 1, while Part 3 usually is taken by medical school graduates.

The big surprise was that ChatGPT performed so well without having been trained on a biomedical dataset.

One caveat is that researchers excluded a set of "indeterminate" answers, because it appears that ChatGPT was programmed to avoid providing what could be construed as medical advice.

What they're saying: "I think we're in the middle of a 20-year arc, kind of like what we already saw with finance," says Vijay Pande, a health care-focused partner with Andreessen Horowitz.

"In 2000, it was insane to think that a computer could beat a master trader on Wall Street. Today, it's insane to think that a master trader could beat a computer."

Backstory: Ansible Health, a Silicon Valley startup focused on treating COPD, had been researching various AI and machine learning tools to improve its care.

"There was so much excitement in the tech world when ChatGPT came out, so we wanted to see if it was just hype or useful," explains Jack Po, Ansible's CEO and a former Google product manager.

"As we started doing validation we were pretty amazed at the results. Not only at what it was getting right, but at how it was explaining itself."

Po and several others then decided to have ChatGPT take the USMLE, first ensuring that "none of the answers, explanations or related content were indexed on Google." They then published their results, which are undergoing peer review.

VC portfolio: Morgan Cheatham, a vice president with Bessemer Venture Partners and a current med school student at Brown University, was among the researchers.

Bessemer made its first investment in generative AI for health in 2018 when it backed an imaging startup called Subtle Medical.

It's since invested in an AI-enabled medical transcription startup and also quietly backed Ansible, which already is using ChatGPT to help explain certain concepts to patients (after review by a trained professional).

Reality check: Generative AI is still in its early innings, often getting things wrong, so for now it'll augment medical work rather than replace it.

3. The (ChatGPT) doctor will see you now

Illustration of AI elements coming out of a doctor's suit where their head should be. 

Alira Health, a Framingham, Mass.-based health care advisory, clinical research and technology company, has raised $58m from undisclosed backers. https://alirahealth.com 

ModifyHealth, an Atlanta-based nutrition company, has raised $10m in Series B funding led by RRC Capital with participation from insider Nashville Capital Network. https://axios.link/3Hffhch 

Censinet, a Boston-based provider of health care risk management tools, has raised $9m led by MemorialCare Innovation Fund, Rex Health Ventures and Ballad Ventures with participation from LRVHealth, HLM Venture Partners, Schooner Capital, Excelerate Health Ventures and Cedars Sinai. https://www.censinet.com/ 

Biohm, a Cleveland-based microbiome startup, has raised $7.5m led by VTC Ventures with participation from Felton Group, Jobs Ohio Growth Capital Fund, Aztec Capital Management, Cleveland Life Science Advisors, Valley Growth Ventures and Jump Start. https://poweredbybiohm.com/ 

Ferrum Health, a San Francisco-based developer of health care-focused quality assurance tools, has raised $6m led by Urban Innovation Fund, Cercano Management and Singtel Innov8. https://axios.link/3iOwjo7 

Cari Health, a San Diego-based developer of wearables for remote medication monitoring, has raised $2.3m in seed funding led by San Diego Angel Conference with participation from NuFund Venture Group, Cove Fund, Chemical Angel Fund, Medical Devices of Tomorrow and several individual backers. https://carihealth.com/ 

4. Deals o' the day

Trusted Health has named former Zocdoc president of health systems Kate Kline president and general manager.

Spring Health has named former Amazon Care head of B2B marketing Jordin Green senior director of demand generation.

Norwest Venture Partners has named former Summit Partners health care team growth investor Irem Rami principal on its health care investment team.

AdvaMed has named former BIO chief operating officer Shaye Mandle executive director of its Center for Digital Health.  

Council Capital has named former Circulo Health director of business operations Josh Leyenson portfolio chief of staff.

FTI Consulting has named Juan Montanez senior managing director and Cindy Ward managing director in its health solutions practice.

Salt Dental Collective has named former ATI Physical Therapy exec Dylan Bates CEO.

5. It's Personnel

📓 Claire took in poetry and prose yesterday from local writers over salted gimlets at a Logan Square bar. 

🎙️ In "Cracks in the Empire," the finale of How it Happened: Elon Musk vs. Twitter, host Erica Pandey explores whether Musk's acquisition of Twitter has made his cross-industry empire too big for one billionaire to run. Subscribe.

❤️ Thanks for reading, and extra thanks to newsletter editor George Moriarty and copy editor Brad Bonhall. Please ask your friends and colleagues to sign up.

January 18, 2023

1 big thing: Sunfish seeds $4M for fertility funding