Healthcare is proving to be one of the most lucrative industries for building artificial intelligence solutions to accelerate clinical, research and administrative operations. Now, we have one of the most recent examples of how this is happening in venture funding. Qventusa startup that builds AI-based tools to automate work in a range of healthcare scenarios — such as surgeries, hospital discharges and inpatient/outpatient exams — 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 “artificial intelligence colleagues” that will be used in a broader set of use cases beyond the inpatient applications that helped Qventus to make its name, the company. he said.
“Debt is available going 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 round, with previous backer Bessemer Venture Partners also participating. The round also has a number of prominent strategic investors who are also Qventus customers: Northwestern Medicine, HonorHealth and Allina Health. The company’s valuation has not been disclosed, but we understand from sources that it is over $400 million.
Importantly, the fundraising highlights the interest AI healthcare is currently attracting among investors. In the past few days, UK-based Cera has raised $150 million in funding. Hippocrates took $141 million. and Innovaccer earned $275 million.
It also points to the progress of Qventus itself. This latest Series D is bigger than all of the startup’s previous rounds combined — PitchBook notes that Qventus had raised about $95 million prior to this round. His latest valuation, in 2022, was around $200 million.
Garg said Qventus has quadrupled its customer base since then, trying to keep 120% clean, and its core business has tripled. He didn’t disclose revenue or other specific numbers, but Garg noted that the company is “very close to breaking even.” This detail has become more important in recent years as startups seek more sustainable business models, given that the IPO window remains relatively small while investors seek returns.
AI scribes and other types of AI assistants have now become relatively commonplace in the healthcare market, so much so that some healthcare AI companies may even work to distance themselves from this description to differentiate themselves.
“We are not an AI writing company,” Garg said. “We have the ability to listen, but AI script is a relatively commoditized space and we’re focusing on an area of operations where there’s a huge pain point.”
Garg has a background in engineering and an MBA, both from Stanford, and was first exposed to the potential of using automation to help healthcare while working on a hospital project at McKinsey. Qventus itself has been around for more than 12 years, originally starting with applying machine learning and other kinds of automation technologies to make clinicians and other medical professionals more efficient. It later expanded into more growth areas such as pharmacy operations.
More recently, advances in genetic artificial intelligence have pushed the company 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 ‘under-licensing duties,'” he said, referring to the admin work that is an integral part of clinical work these days, “machine learning has already been in that space for 12 years.” . Generative AI, he said, has helped introduce more unstructured data into the mix to improve how AI tools can be used to help clinicians perform more of these admin tasks, “sending emails and faxing a lot beyond [what an AI scribe can do] to take the burden off the user.”
We’re likely to see more activity in the healthcare AI space next year, both in terms of fundraising for promising companies and mergers and acquisitions to consolidate the field.
“Qventus is at the intersection of issues that KKR has spent a lot of time evaluating in both our Technology and Healthcare teams,” Jake Heller, partner and head of technology development, Americas, at KKR, told TechCrunch.
“The company is at a key moment of growth, especially during this time where health systems are increasingly adopting technology to increase efficiency. The company’s technology substantially reduces care orchestration and administrative burdens for physicians and medical staff, which allows providers to focus on providing the best care to patients.”
