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BFD Expert Voices - Health Tech Deals

BFD Expert Voices

AvoMD, an AI-enabled technology company seeking to automate admin, raised $5 million in seed funding, co-founder Yair Saperstein tells Aaron exclusively.

Why it matters: Physician burnout continues to loom over the health care industry, which is already rankled by a labor shortage and wage inflation.

Details: The round of funding was led by AlleyCorp.

Other investors in the round included Las Olas, Epsilon Health and MedMountain Ventures.

Additional investors include angel investor Dr. Kavita Patel, a venture partner at New Enterprise Associates, as well as Mirae, Dunamu, Columbia University, Mount Sinai Innovation Partners, StartUp Health, and 500 Global.

How it works: AvoMD digitizes clinical evidence and best practices to provide physicians with interactive clinical guidelines, medical calculators, billing support and documentation automation.

Avo has developed standardized integrations with the largest electronic health record systems in the US.

It also supports AI model integration, which enables doctors to incorporate clinical predictions based on AI at the point of care.

"We want to help automate tasks and humanize the patient experience," Saperstein says.

What's next: Fresh funds will be used to expand sales and marketing, build out EHR integration, R&D efforts, and upgrades to the AI platform.

"This funding will have us set well into next year," Saperstein says, noting AvoMD could raise capital again in late 2024.

AvoMD, which is "closing in on $1 million annual recurring revenue," sees a path to profitability "in the next couple years," he adds.

State of play: Investors have been shelling out cash for companies that can automate repetitive and administrative tasks — freeing front-line workers to spend more time providing care.

Laudio this month snagged $13M Series B for automation for tasks such as employee rounding, checking with new hires, checking in on patients, assessing overtime and quality audits.

Primary care company Carbon Health is using AI to write notes during patient appointments, one of the most time-intensive tasks for physicians, as tech continues to chip away at pain points for health care providers.

Clinical automation company Memora Health collected $30 million in undesignated funds in April to automate patient communication.

One (not exactly fun) thing: Two of the three cofounders — Saperstein and Joongheum Park — are also physicians in New York City and had firsthand experience with burnout.

"Clinicians can build the best clinical tools because we know what we need best," Saperstein says.

1 big thing: AvoMD raises $5M seed to combat doctor burnout

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Senior benefits navigation startup Duos raised $10 million, CEO Karl Ulfers tells Erin exclusively.

Why it's the BFD: Many older adults in the U.S. lack fundamental social services like access to healthy food and transportation — benefits that often go overlooked within health plans.

Details: Primetime Partners, SJF Ventures and the Aging Innovation Fund led the undesignated funding round, which follows Duos' $15 million Series A last April.

"We’re looking at this as an extension to our Series A rather than a Series B because we’ve established good traction and this capital is focused on building out the platform and investing on the marketing and growth side," Ulfers says.

Ulfers declined to say when he foresees Duos raising a Series B but said the company is "at least a couple years out."

How it works: The New York-based company helps direct seniors and caregivers to existing, unused benefits with an AI-powered navigation engine that helps prioritize such benefits based on need.

The company contracts with Medicare Advantage (MA) plans and assigns each member a dedicated personal assistant, or “duo," that coordinates the services. It also offers its services on a SaaS-based model.

Many of the services Duos facilities include so-called social determinants of health (SDoH), such as transportation, food delivery or home cleaning.

Duos is "basically a database plus a recommendation engine that allows for immediate gratification that there’s an answer to your question," says Duos investor and Primetime Partners managing partner Abby Levy. "And they do it without all the health care speak."

What they’re saying: "We talk a lot about how 'it takes a village' but I think we forget that our health plan, on our behalf, has been amassing pieces of that village for us," says Levy.

Duos is "pushing out from the health care portal everything you should know about. They basically bring the village to you."

Be smart: Regulatory changes enacted by CMS in 2020 enabled MA plans to offer an expanded range of services under the category of Special Supplemental Benefits for the Chronically Ill (SSBCI). Those benefits include many of the kinds of services Duos offers.

By the numbers: A recent Kaiser Family Foundation analysis concluded that every year, 57% of Medicare enrollees don’t assess their coverage options, in part due to comprehension difficulties.

That percentage is higher among those aged 85+, those with lower incomes, people with lower education levels, and people in fair or poor health, the report found.

State of play: Developers of insurance- and benefits-navigation platforms are attracting fresh venture interest as markets such as Medicaid and Medicare Advantage become increasingly competitive. For example:

Medicare benefits navigation startup Spark Advisors in January collected $15 million in Series A funds.

Fair Square Medicare last summer garnered $15 million in Series A funding to help older adults navigate Medicare.

Benefits-matching startup Soda Health last fall collected $25 million in Series A funds.

The bottom line: Duos aligns with payers' acknowledgment that non-clinical social services are crucial to managing chronic conditions and keeping aging adults out of costly care environments.

2. The BFD: Duos raises $10M to help seniors use health benefits

Illustration of a nurse walking with an elderly man.

• NVision Imaging, a German developer of MRI technology, raised $30m in Series A funding led by Playground Global with participation from insiders B-to-V and new participation from Pathena Investments, Entree Capital, Lauder Family, ES Kapital and Sparkassenkapital Ulm. https://axios.link/3NmzQp1

• Heard, a Seattle-based provider of administrative tools for behavioral health providers, raised $15m in undesignated funds led by Headline with participation from GGV Capital, Footwork, Founders’ Co-Op, Act One and Heron Rock, bringing total funding to $26.3m. https://axios.link/3r1bgSO 

• SOS, a Boston-based wellness company, raised $7.6m from two strategic partnerships: a $2.6m investment round supported by Wasserman Ventures and a $5m round led by Urban Us Capital. https://www.worldofsos.com/

• Oliva, a London-based telemental health startup, raised €5m ($5.5m) in seed funds led by Molten Ventures with support from insiders Stride VC, new backers Alumni Ventures, and individual backers including Zapier CMO Kieran Flanagan, bringing total funding to €13m ($14m). https://axios.link/3NIIaRa

• Nyra Health, an Austrian developer of digital therapy tools for neurological patients, raised €4.5m in seed funding co-led by MassMutual Ventures and Wellington Partners. https://axios.link/3Xnn4Ln

• Kelso & Co. acquired Valenz Health, a Phoenix-based medical cost-containment firm, from Great Point Partners. www.valenzhealth.com 

• Sverica Capital Management made a strategic growth investment in First Stop Health, a Chicago-based provider of digital health services. www.fshealth.com

• Nomi Health, an Orem, Utah-based health benefits startup, acquired I am Wellness, a Phoenix-based primary care clinic operator. https://axios.link/3Xrg1Bl

• Springbank, an NYC-based early-stage investment firm, closed a $35m fund focused on women and working families. www.springbank.vc

3. Deals o' the day

• Andrew Slutsky, president of consumer at GoodRx, joined SteadyMD's board.

• Iyah Romm, the founding CEO of Cityblock Health, joined Real's board of directors.

• Thayer Lavielle, EVP of The Collective, joined SOS' board of directors.

• Cate Stanton became director of market operations at Accompany Health.

4. It's Personnel

🏥 Doctors and patient families say HCA hospitals push hospice care — NBC

🏳️‍🌈 The LGBTQ population is growing, but medical schools haven't caught up — NBC

5. Your daily dose

Illustration of a weekly pill dispenser box with a newspaper called "daily dose" in each compartment.

Here's your recap of what we've covered this week:

June 20 — Meet the new (old) Leerink Partners; Caraway raises $17m for tele-abortion, inclusive care. Read the whole newsletter.

June 21 — Research tech startups get $6m seeds; Aledade raises $260m; THL's Megan Preiner talks outsourced pharma services. Read the whole newsletter.

June 22 —  Deep dive on how Roe reversal is impacting women's health tech market. Read the whole newsletter.

6. 🗞️ Catch up quick

👩🏻 Situational awareness: Tomorrow is the one-year anniversary of the Dobbs decision, which halted federal abortion protections. Read our special edition dedicated to the milestone.

🎣 Aaron is excited to go back to Bad Roman tonight for dinner and is going deep-sea fishing out in Jersey on Saturday (weather permitting). 

💙 Thanks for reading, and extra thanks to newsletter editor Claire Rychlewski and copy editor Mickey Meece. Please ask your colleagues, friends and family to sign up.

June 23, 2023

1 big thing: AvoMD raises $5M seed to combat doctor burnout