In the post-COVID world, VCs say it’s not as easy to get excited about investing in digital health. Deal activity in healthcare IT was relatively flat in Q1 2024 at 74 total deals, valued at about $1 billion total, up only 3% from the year-ago quarter, according to PitchBook data.
Still, promising startups have grabbed investors’ attention this year. TechCrunch spoke with about a dozen healthcare VCs about the companies they think have the most promising future. While recently formed AI-driven startups that are solving staggering administrative challenges in the U.S. healthcare system dominated their recommendations, they also mentioned several slightly older, non-AI-focused businesses.
We narrowed their suggestions to the list of names that more than one VC mentioned, which came in at an even 10 companies. VCs discussed with us the companies that were both in their portfolios and not.
Cohere Health
What it does: Cohere Health expedites health insurance approval process, known as prior authorization, for medical conditions with the help of AI.
Why it’s promising: Prior authorization management could take medical and administrative staff hours as it requires gathering appropriate documentation for submission to health insurers or Medicaid. Cohere Health’s AI can reduce the time it takes to do this to minutes, saving medical and administrative staff hours on these tasks.
Investors say that Cohere is for now the leader in the space, but other startups that expedite health insurance approval for medical conditions include Anterior and Alaffia Health.
Funding: Cohere Health raised a $50 million Series B earlier this year from Deerfield Management with participation from Define Ventures, Polaris Partners, Longitude Capital and Flare Capital Partners.
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