Startups Disrupting Healthcare with AI and Machine Learning

CB Insights:

We identified over 90 companies that are applying machine learning algorithms and predictive analytics to reduce drug discovery times, provide virtual assistance to patients, and diagnose ailments by processing medical images, among other things.

A few investment highlights:

• Increasingly crowded imaging & diagnostics: 17 out of the 22 companies under imagining & diagnostics raised their first equity funding round since January 2015 (this includes 1^st Seed or Series A rounds, as well as a first round raised by stealth startup Imagen Technologies). In 2014, Butterfly Networks raised a $100M Series C, backed by Aeris Capital and Stanford University. This was the third-largest equity round to AI in healthcare companies, after China-based iCarbonX’s $154M mega-round and two $100M+ raises by oncology-focused Flatiron Health.
• VCs invest in drug discovery: Startups are using machine learning algorithms to reduce drug discovery times, and VCs have backed 6 out of the 8 startups on the map. Andreessen Horowitz recently seed-funded twoXAR, developer of the DUMA drug discovery platform; Khosla Ventures and Data Collective backed Atomwise, which published its first findings of Ebola treatment drugs last year, and has also partnered with MERCK; Lightspeed Venture Partners invested in Numedii in 2013; Foundation Capital participated in 3 equity funding rounds to Numerate.
• Khosla Ventures backs 5 companies: Khosla Ventures has been the most active VC investor in the space, having backed 5 unique companies: California-based Ginger.io, which focuses on patients with depression and anxiety; healthcare analytics platform Lumiata; Israel’s Zebra Medical Vision and California-based Bay Labs, which apply AI to medical imaging; as well as drug discovery startup Atomwise.
• AI in oncology: IBM Watson Group-backed Pathway Genomics has recently started a research study for its new blood test kit, CancerIntercept Detect. The company will collect blood samples from high-risk individuals who have never been diagnosed with the disease to determine if early detection is possible. Other oncology-focused startups include Flatiron Health, Cyrcadia (wearable device), CureMetrix, SkinVision, Entopsis, and Smart Healthcare.
• Remote patient monitoring: New York-based AiCure raised $12.3M in Series A funding from investors including Biomatics Capital Partners, New Leaf Venture Partners, Pritzker Group Venture Capital, and Tribeca Venture Partners, for the use of artificial intelligence to ensure patients are taking their medications. California-based Sense.ly has developed a virtual nursing assistant, Molly, to follow up with patients post-discharge. The company claims Molly gives clinicians “20% of their day back.” Sentrian, backed by investors including frost Data Capital, analyzes biosensor data and sends patient-specific alerts to clinicians.
• Core AI companies bring their algorithms to healthcare: Core AI startup Ayasdi, which has developed a machine intelligence platform based on topological data analysis, is bringing its solutions to healthcare providers for applications including patient risk scoring and readmission reduction. Other core AI startups looking at healthcare include H2O.ai and Digital Reasoning Systems.