Neil Parikh

The (Healthcare) Ground Beneath Our Feet… This year it is likely that over $10 billion will be invested in the digital health sector – a robust amount, no doubt, but inconsequential when compared to the amount of capital tied up in healthcare real estate assets, which is estimated to be $1.2 trillion by Jones Lang Lasalle. Of that amount, approximately $790 billion is in the hospital sector while the remaining $490 billion is in medical office assets. It is estimated that there are 48.6k facilities with 3.4 billion square feet of healthcare real estate, 42% of which are owned by REITs and another 33% held by other private investment vehicles. Much of the digital health investment is meant to make the physical healthcare infrastructure more productive: greater operating efficiencies, greater patient throughput, more relevant personalized care models with better outcomes. As the healthcare system is being pushed to be more distributed to lower cost sites of care, accelerated now by the rapid proliferation of automation and AI capabilities, the potential impact on healthcare infrastructure assets will be profound. Thoughts on what that might look like... https://lnkd.in/eTfAdUbS #digitalhealth Flare Capital Partners

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Some VC investors believe that brick and mortar - referring to a physical presence of some kind - should be avoided at all costs. Yet, the track record of clinic and hybrid care businesses in health care indicates otherwise. ==> One Medical (sold for $3.9 billion to Amazon), Oak Street (bought by CVS for $10.6 billion), Lifestance (IPO at $7.5 billion market cap), and PE-backed Premise Health (acquired by OMERS Private Equity for $1.1 billion) If a clinic is indicated as the optimal way to deliver care for that patient population, there are creative ways to build and operate them. Full article below with advice and strategies on how to build and operate hybrid clinics from my teammate Anarghya Vardhana from Maveron, Amir Dan Rubin from OneMedical Group, Steven Eidelman from Modern Animal and more!

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Hot take on a lot of early-stage digital health companies out there: You're not a tech company. Most tech-enabled care companies I've seen over the past two years are only tech-enabled in the sense that they use telehealth as their delivery mechanism for care. There are exceptions to this, of course - companies who build computer vision and applied AI tools to better the doctor-patient experience, companies who build tooling around risk scoring and stratification to enable more personalized medicine, companies who build truly novel intakes to better route patients to the appropriate care, etc. These companies have real technology chops and, if they sell it right to the market, can get credit for this from investors. But if you're truly a telehealth provider, you need to realize now that the goal post has shifted dramatically from 2021 and you're going to be valued at maturity at something like 3x EBITDA. That's profit. Not revenue. Throw a revenue multiple out the window. That's not the world we live in if you're a virtual doctor's office. Think of how that impacts venture math. If you're raising a seed round at $15M post-money (or $12M pre-money), it means you'll have to generate something like $150-200M in annual EBITDA to be a fund returner for your seed investors. Maybe even more with dilution, since telehealth businesses are not traditionally capital efficient and will likely need to raise material additional capital to reach that scale. You need to be ridiculously profitable (probably on $800M-$1B in annual revenue since you're likely going to be a 40% gross margin business). Here's the good news: you can set yourself up well (and probably be a contrarian founder relative to your peers), by talking about EBITDA growth and how you can grow into a fund-returning outcome based on realistic mature market comps. This will stand out for the investors you're pitching, even at the early stage. This is how you can beat the malaise of the tech-enabled care market. Focus on the right metrics and the right type of growth. You don't have to have all the answers (no founder does), but you need to make sure the ship is headed in the right direction. A focus on profitability for "tech-enabled care" (*ahem* telehealth) businesses is a good first step.

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Excited to announce Frist Cressey Ventures' investment in Qualified Health and privileged to partner w/ SignalFire, Healthier Capital, Town Hall Ventures and others!   Healthcare costs are increasing at a faster rate than ever before, with the US spending nearly twice as other wealthy countries and still ranking bottom in outcomes. It's a story you've all heard - - US healthcare is known for astronomical inefficiencies, waste, workforce supply constraints, fragmented access, appalling patient experiences, and driving patients and businesses into debt.   Yes these problems present opportunities. But opportunities are limited to the system's appetite for change, desire and incentive to try something new and the innovation available. At FCV we believe we've hit the trifecta with Generative AI. Generative AI has given us truly transformational tools in the toolkit and the healthcare ecosystem is demanding to absorb its benefits. This perfect collision of supply and demand means healthcare is poised for big change.   Generative AI is everywhere, it's buzzy, it dangles hope and opportunity. But many things need to be true for the Gen AI transformation in healthcare to take hold, such as but not limited to:   💡 Patient lives and data need to remain safe: We believe in a highly regulated and human life-touching sector such as healthcare we must ensure Gen AI can drive to unrivalled savings and improvements in the quality of care WHILE not putting patient lives or data at risk.   💡 Systems need to own their utilization of Gen AI: We believe systems will use some hybrid of external partners and homegrown solutions but importantly will want full control of data provisioning and utilization as well as the ability to solve an unlimited number of nuanced issues and not cookie cutter algorithms.   💡 Costs need to be looked at on an enterprise level: We believe the speed of innovation in Gen AI means costs will continue decreasing dramatically but at an enterprise level this will still not be a small detail. Systems will want the ability to understand costs and delegate as needed for the outcomes desired at the organizational level.   Enter Qualified.   We knew when we met Justin Norden, MD, MBA, MPhil and team we were standing in front of changemakers. These individuals have lived and breathed the true application and implementation of Generative AI far before we were asking ChatGPT to write our emails. In fact, if you’ve ever driven in a Waymo you’ve benefited from past products this team has built.   Qualified Health is on a mission to enforce governance in Gen AI, allow systems to rapidly build for their needs, monitor and make decisions for all GenAI (homegrown and external) and accelerate the value the sector can glean from these new technologies.   Huge shout out to William T., Tommaso Auerbach and Jamie Kuntz for their hard work!

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One of my proudest moments as an investor occurred today as Alaffia Health announced its series A because it shows how the Aperture® Venture Capital vision of multi-level, multi-generational #impactinvesting is succeeding in the marketplace. Here’s the model in its most basic form : ✅As diverse fund managers with meaningful capital to allocate, we are changing the VC landscape every day just by doing our day jobs. ✅As Black/Brown investors with ~40 years experience collectively, Aperture GPs have access to talent /excellence that others do not, so our portfolio *organically* is more inclusive by race, gender and geography even while optimizing for financial outcomes (all about the alpha). ✅Our most successful portco’s are using financial #innovation to solve market problems that impact underrepresented demographics and underserved communities. Alaffia Health is a shining example of the impact portion of our overall fund thesis, and we couldn’t be prouder of TJ Ademiluyi and Adun Akanni, MPH, PMP - the dynamic brother-sister founder duo whose vision we have steadfastly supported on their journey. Congratulations to TJ and Adun from William Crowder and myself, as well as the whole Aperture team- Marjorie King Philip McKenzie Yves Louis-Jacques Tanvi Lal Michelle Dhansinghani Lisha Bell Katie Kelly Amy Chung Cindy Chong, CFA Brian Fernandes-Halloran Monroe France Jayden Pantel Darren Herman Evan Wladis Neal Triplett Thomas Scriven Peter Ammon Irina Bit-Babik Tim Milanich Rob Rahbari

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Today was a big win for consumer health, with Flo Health Inc.'s valuation at $1 billion. We're hearing talk about the market becoming frothy again, but I’d argue—without seeing the detailed financials—that this valuation could be entirely warranted. Flo has built an impressive business, with 5 million paid subscribers and 70 million monthly active users. At $60 per year for users to access the product, this business has hundreds of millions in revenue and plenty of room to grow. It's increasingly clear to me that innovators focused on healthcare have been wildly underestimating consumer business models for years, believing that patients would only opt for solutions covered by their health plans and prescribed or recommended by their doctors. That thesis needs updating, particularly given high deductible plans and soaring co-pays. Innovators building solutions that users genuinely love will win - even in healthcare. These businesses also have the potential to move into B2B channels, which is far easier to do when you have an engaged, loyal user base. I expect we’ll see many more consumer health businesses “pop” in the years to come, further proving that consumers are ready and willing to pay for such solutions. We're watching closely at Cherish Kudos to the team at Flo for this impressive milestone. Lainie Muller Charlotte Yeh Aashima Gupta Avanlee Christine Esther Dyson Alexandra Drane Jessica Kamada Vin Gupta, MD MPA Asheesh Saksena Paul Crnkovich Josh Kampel Steve Chazin Lee Wagner #agingwithattitude #independentliving #consumerdrivencare

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Someone broke down the estimated costs of a $15 Sweetgreen salad. We need these cost graphics for digital health to help future founders. Especially for tech enabled cos, the greatest cost is labor. Much of the "value created" is in curation and matching, which means the gross margins are reliant on labor arbitrage. Pay someone $X, but get paid $X+Y% per visit. The challenge with healthcare is that you often have to pick one of two business models: 1. specialized, low volume, high cost, low gross margin % 2. generalized, high volume, low cost, high gross margin % I'd argue founders should focus on gross dollars over the lifetime of the customer (like Jeff Bezos said) instead of gross margin %'s, but we'll leave that for another time. The challenge is that many tech enabled digital health cos have high cost of goods sold (labor) and moderately high product, design, and engineering budgets. We must build differentiated solutions for patients, clinicians, and clients to be out incumbents, however, we're realizing that companies are ultimately valued on the discounted value of future cash flows. And the high SG&A costs at most organizations might be inbalanced to the unit economics of the business. I'm not sure the math pencils out for everyone unfortunately. But I'm just a guy on the internet, would love to hear the thoughts from those smarter than I (you!). Comment below. --- p.s. I have no idea the accuracy of the graphic and not an investor in Sweetgreen. Cheers. Credit: David Crowther

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Two of healthcare’s most-funded startups raised well over half a billion dollars—then shut down this year. So, does raising big bucks really lead to success? 🤑 SignalFire‎ teamed up with FierceHealthcare‎ to take a closer look at the 20 most-funded #HealthTech startups and the 20 largest recent HealthTech funding rounds. The top 20 #HealthTech startups raised $16.8B+ collectively. Where’s the money going? We unpacked: 📈 How #AI is driving a surge in funding for improving efficiency and outcomes. 💣 Lessons learned from flameouts like Olive and Forward Health. 🚀 From telehealth to value-based care, see how these startups are transforming healthcare—and what it takes to thrive. Check out the article from Heather Landi at Fierce Healthcare‎, who covers insights from YY at SignalFire's Health & PharmaTech practice below, and Danielle Z. on our data science team👇 Congrats to my former team at Devoted Health, who is at the top of this list, and our portfolio companies Ro, Grow Therapy, Color, PayZen on raising successful rounds!💸🎉 #Healthech #VentureCapital #Startups #AI #PharmaTech #Healthcare

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Looking beyond #VC funding for your #startup? Aakash Shah of Wyndly (YC W21) reveals how he built a multi-million dollar #healthtech company using creative capital strategies. Learn how he leveraged Y Combinator's network and alternative funding methods to revolutionize allergy treatment. In case you missed it, you can watch the #FundraisingDemystified #podcast here: https://lnkd.in/eZT63YS4

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What's been happening in mental health? ⏺ Vitalic Health raised a $4M seed round for its geriatric behavioural health care platform. ⏺ Kooth Digital Health landed a $1.45 million pilot contract to provide their Soluna platform to over 50,000 students across New Jersey. ⏺ Peer support startup Fello , led by former Uber Eats executive Alyssa Pollack, raised $10.4M for virtual, app-based peer support designed to combat the loneliness epidemic. ⏺ Oceans Healthcare acquired Haven Behavioral Healthcare , expanding to 5 new U.S. states and adding 7 new locations. ⏺ Mabel raised a €600K pre-seed round to help improve women's mental health through microdosing programs and mushroom-based supplements ⏺ Wysa published a paper on the impact of their early stage digital mental health interventions for Singaporeans. ⏺ Applications for the KHP Ventures Mental Health immersion programme close tomorrow (Jan 7th) (All links below) __ If you liked this and want insights on the mental health industry in your inbox every week, subscribe to The Hemingway Report newsletter and follow me Steve Duke 📩 #MentalHealth #BehavioralHealth

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It was wonderful to be in conversation with Madison Mills of Yahoo Finance at their annual Invest conference earlier this week. We covered everything from the venture outlook for 2025, impact of elections on women's health investing and innovation, and more. Full clip and summary below 👇 https://lnkd.in/gS67sc2Y

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Couple of weeks ago had the pleasure of sharing my story to Alexander Benkendorf about starting CastPrint and later moving on to join Verge HealthTech Fund and the learning along the way. Some topics we discussed: 💡What does it take to bring innvation in healthcare 💡How did my startup background help me better prepare for VC work 💡How founders can better engage with VCs and what are the tips and tricks from the "other side" Thanks Alexander for having me!

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Hot off the pre-print server – an important publication authored by the Atropos Health team exploring the performance of LLMs in answering real-world clinical questions. LLMs excel at summarizing and contextualizing existing literature, but cannot generate de novo medical evidence today. The results of the study highlight performance gains attributable to injecting novel, relevant, and up-to-date medical evidence into LLM-powered clinical decision support systems. Brigham Hyde Nigam Shah Saurabh Gombar Read the study here: https://lnkd.in/ecuU25Pq

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As part of Forum Ventures’ investment thesis in healthcare, Naomi Goez and I spent a lot of time looking at the healthtech landscape to find the fastest-growing early-stage (Pre-Seed to Series A) startups building in three categories:    1. Healthcare staff management  2. Evolution of digital health 3. Operational productivity in healthcare systems Our objective is to gain a deep understanding of the market dynamics: who is building what, what companies are having success and why, where the gaps and opportunities are, and determining the optimal investment areas for achieving maximum impact and returns. We built a market map based on this research and shared it a few months ago. We’ve since had a number of startups request to be added – too many to add to our static visual. So the team built a new online version that can house hundreds of companies easily and continually be updated live as more companies are discovered. Our new market map is easy to view, sort, and filter, and links to each company website. In a nutshell, same startups, same value, but a way better experience. Check it out https://lnkd.in/ePR8vHiV Forward to a VC or founder who would find this valuable! #healthcare #startups #healthtech #marketmap #VC #B2BSaaS #B2B

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Incredibly excited to share our updated Healthcare AI thesis. This is not a market map – in 4,000 words, we dive deeply into the research, products, business models, and market entry points that are reimagining healthcare with AI. More specifically, we cover: • Translating AI research into real-world products • Mapping modalities (software, copilots, agents, services, diagnostics, therapeutics) to problems in healthcare • Designing AI business models that unlock billion-dollar markets • Closing current gaps in healthcare AI infrastructure • Distinguishing AI platforms from point solutions Let us know what you think ⤵️

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As I wrote earlier, Venture Builder is an attractive new tool for early-stage investment in deeptech startups. Investments in the Venture Company Initiate, which specializes in healthcare, attracted $45 million, a vivid example. If you are considering investing in healthcare startups and would like to learn more about investing in Venture Builder, please email me.

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Awesome report from Rock Health (in the comments) about H124 digital health funding. 📈 Despite broader economic challenges, the digital health sector, including mental health, has shown resilience, raising $5.7B across 266 deals. There is a strong Series A pipeline, tapering off of unlabeled funding rounds and 3 public exits in Q2 2024 indicating a revival in the exit market and a return to more sustainable funding patterns​. Key insights about the mental health market: 🧠 Mental health continues to be the leading clinical indication in digital health funding, securing $682 million in H1 2024. This consistent top ranking highlights the ongoing investor interest and the market's recognition of the critical need for mental health solutions. 🤖 The focus on mental health is driven by a combination of increased awareness, the rising demand for accessible mental health services, and the integration of tech solutions...🙄 In fact, AI has become a significant factor in digital health investments, with 34% of the total sector funding going to AI-startups. This trend is also reflected in mental health, where AI is being utilised to enhance diagnosis, personalise treatment plans, and provide scalable, efficient care solutions. Let's go!

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Wow, great stuff on this first episode. I got the run down from Ataes Aggarwal and Arya Satish, and I see that critically important business and life topics will be covered in this podcast series. Follow, tune in, and spread the word. PSA: Some super thoughtful and practical content to be had here with this podcast. 🙌

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