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Healthcare is proving to be one of the most lucrative industries when it comes to building AI solutions to speed up how work is done in clinical, research and administrative operations. Today comes one of the latest examples of how it is playing out in terms of venture funding. Qventusa startup that builds AI-based tools to automate work in a variety of healthcare scenarios — including surgeries, hospital discharges and inpatient/outpatient checkups — has raised a $105 million Series D round.
The funding — which includes $85 million in equity and $20 million in optional debt — will be used to develop more “AI teammates” for use in a broader set of use cases beyond the in-patient applications that helped Qventus to make his name, the company. he said.
“Debt is available as we move forward if we want to put the pedal to the metal,” CEO and co-founder Mudit Garg said in an interview. “To be honest we didn’t need equity or debt, but it was an opportunity.”
KKR is leading the financing, with previous backer Bessemer Venture Partners also participating. The round includes a number of prominent strategic investors who are also Qventus clients: Northwestern Medicine, HonorHealth and Allina Health. The valuation of the company is not disclosed, but we understand from sources that it is more than $400 million.
Significantly, the fundraising highlights the interest that AI health is currently attracting among investors. Just in the last few days, There was in the United Kingdom announced $150 million in funding; Hippocratic raised $141 million; and Innovate raised $275 million.
It also indicates the actual progress of Qventus. This latest Series D is larger than all previous rounds of startups combined, with PitchBook noting that Qventus had raised about $95 million before this round. His last valuation, in 2022, was about $200 million.
Garg said that Qventus has grown its number of customers four times since then, working towards a net retention of 120%; and its core business has seen triple growth. He did not disclose revenue figures or any other specific numbers, but added that it is “very close to breaking even.” This is a detail that has become more important in recent years, as startups are looking for more sustainable business models, since the IPO window remains relatively small, but investors are still looking for returns.
AI scribes and other types of AI assistants have become relatively common products in the healthcare market, so much so that some AI healthcare companies may even work to move away from that description to differentiate themselves.
“We are not an AI writing company,” Garg said. “We have the ability to listen, but AI scribe is a relatively commoditized space and we are focusing on an area of operations where there is a huge pain point.”
Garg himself has an engineering background and an MBA, both from Stanford, and first came into contact with the potential of using automation to help in healthcare while working on a hospital project at McKinsey. Qventus itself has been around for over 12 years, having originally started from apply machine learning and other types of automation technology to make clinicians and other medical professionals more effective and then expand into more development areas such as pharmacy operations.
More recently, developments in generative AI have pushed it closer to building solutions that are more responsive to what clinicians are working on in real time.
“If you think about where care teams are doing in ‘tasks under license,'” he said, referring to the admin work that is part of clinical work these days, “machine learning is already in this space for twelve years.” Generative AI, he said, has helped bring more unstructured data into the mix to improve how AI tools can be used to help clinicians do more of that administrative work, “sending email and fax far beyond (what an AI scribe can do) to take. the burden of the user.”
We are likely to see more activity in the AI health space in the coming year, both in terms of fundraising for the most promising companies, and in M&A to consolidate the field.
“Qventus is at the intersection of topics that KKR has spent a lot of time evaluating across our Technology and Healthcare teams,” Jake Heller, a partner and head of technology growth, Americas, at KKR, told TechCrunch .
“The company is at a key moment of growth, especially at this time where health systems are increasingly adopting technology to drive efficiency. The company’s technology significantly alleviates care orchestration and administrative burdens for physicians and medical staff, allowing providers to focus on providing the best care to patients.”
