Healthcare is proving to be one of the more profitable industries by building AI solutions that speed up clinical, research, and administrative operations. Well, here's one of the latest examples of how that's playing out in terms of venture funding. Qventus, a startup that builds AI-based tools to automate tasks across a variety of healthcare scenarios, including surgeries, hospital discharges, and inpatient/outpatient testing, has raised $105 million in Series D funding.
The funding includes $85 million in equity and $20 million in discretionary debt to create an “AI teammate” that can be used in a broader range of use cases, beyond the inpatient applications that helped make Qventus a household name. The company said it will be used for further development. Said.
“If you want to move forward with all your might, you can borrow money,” CEO and co-founder Mudit Garg said in an interview. “Frankly, we didn’t need any capital or debt, but it was an opportunity.”
KKR is leading the round, with participation from previous backer Bessemer Venture Partners. A number of prominent strategic investors also participated in this round, including Qventus clients Northwestern Medicine, HonorHealth, and Allina Health. The company's valuation has not been disclosed, but sources say it is valued at more than $400 million.
Importantly, this funding highlights the growing interest in AI healthcare among investors at this time. In recent days, the UK's Cera has raised $150 million in funding. Hippocrates received $141 million. And Innovaccer raised $275 million.
It also shows Kuventus' own progress. This latest Series D is larger than all of the startup's previous rounds combined. PitchBook says Qventus had raised about $95 million before this round. Its last valuation in 2022 was about $200 million.
Since then, Qventus' customer base has grown four times, net retention has reached 120%, and the core business has grown three times, according to Garg. Without disclosing revenue or other specific numbers, Garg said the company is “very close to breaking even.” This detail has become more important in recent years as investors seek returns, IPO windows are relatively small, and startups seek more sustainable business models.
AI scribes and other types of AI assistants are now relatively common in the healthcare market, and some AI healthcare companies are trying to distance themselves from such descriptions to differentiate themselves. You might even do it.
“We are not an AI writing company,” Garg said. “While we have the ability to listen, AI scribing is a relatively commoditized field and we are focused on areas of the business where there are significant pain points.”
Garg, who has an engineering and MBA from Stanford University, was first exposed to the potential of using automation to aid healthcare while working on hospital projects at McKinsey. Qventus itself has been around for more than 12 years, initially starting out by applying machine learning and other types of automation technology to improve the efficiency of clinicians and other healthcare professionals. Later, we expanded into development areas such as pharmacy management.
More recently, the development of generative AI has brought the company closer to building solutions that are more sensitive to what clinicians are working on in real time.
“If you think about what medical teams are doing in their ‘unlicensed work,’ machine learning has been in this space for 12 years now,” he said. I mentioned the administrative tasks that have become a part of clinical work these days. He said generative AI has helped improve the way AI tools are used to bring in more unstructured data and allow clinicians to perform more administrative tasks. [what an AI scribe can do] Reduces the burden on users. ”
The next year is likely to see even more activity in the AI healthcare space, both in terms of funding for promising companies and M&A to consolidate the sector.
“Qventus is at the intersection of themes that KKR has spent significant time evaluating across both our technology and healthcare teams,” Jake Heller, Partner and Americas Head of Technology Growth at KKR, told TechCrunch. spoke.
“The company is in a period of significant growth, especially at a time when health systems are increasingly deploying technology to increase efficiency. This significantly reduces the burden on healthcare providers and allows them to focus on providing the best care to their patients.”