4 Health Care Startups You Should Know

What’s New?

Health Catalyst has earned its reputation for developing cloud-based analytics software, but it recently made news for another reason. The Salt Lake City startup, with customers like Intermountain Healthcare, Texas Children’s Hospital and Allina Health, recently raised another $100 million in funding according to Forbes. That pushed the company over $1 billion in valuation, making it the latest health care “unicorn” — a term the investment community uses for companies that surpass this financial threshold.

It wasn’t long ago that health care startups with $1 billion or more in valuation were as rare as the proverbial unicorn. But as a recent New York Times report notes, the latest generation of tech startups — both inside and outside of health care — look quite different from their predecessors.

What’s Going On?

As many first-generation unicorn startups have matured and prepare to go public, the second wave of innovators is largely concentrating on software and digital solutions for such industries as farming, banking and health care. Many second-generation startups are growing fast for several reasons. First, fields like health care are ripe for software and technology innovations that can advance care delivery. Second, cloud-based solutions are making it far easier for providers, researchers, payers and others to collaborate as they jointly access and rapidly process massive amounts of data. And third, investors are hungry to finance and reap the rewards for what they believe will be the next big innovations in health care.

Venture capital has been pouring into digital health care in record amounts, giving innovative companies greater access to resources to fuel product research and development. Rock Health reports that digital health startups alone in 2018 drew $8.1 billion in investments, a whopping 42 percent increase from 2017.

4 Recent Health Care Unicorns

Including Health Catalyst, here are four recent health care startups to achieve at least $1 billion in valuation as of January 2019, according to a CB Insights report:

1. Health Catalyst ($1 billion): The newest health care unicorn, Health Catalyst is a data, analytics and decision-support company that aims to deliver massive, sustained improvements in outcomes. The company’s solutions include advanced predictive analytics for population health and value-based care. Its investors include Kaiser Permanente Venture and Sequoia Capital.
2. Calm ($1 billion): This San Francisco startup, which focuses on health and wellness, recently achieved $1 billion in valuation and is believed to be the first mental health and wellness-focused unicorn. As Crunchbase reports, the company’s meditation app has been wildly popular, with more than 40 million downloads and 1 million active subscribers.
3. Butterfly Network ($1.25 billion): This company is transforming diagnostic and therapeutic imaging with devices, deep learning and the cloud by bringing together world-class talent in computer science, physics, mechanical engineering, electrical engineering and medicine to observe and heal the human body. Its investors include the Bill and Melinda Gates Foundation and Aeris Capital.
4. Devoted Health ($1.8 billion): Among a growing number of companies trying to disrupt the Medicare Advantage market, Devoted Health uses data analysis and machine learning tools to help make better and more efficient decisions about care.