9 months ago
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Artificial intelligence has an increasing role in the world of healthcare, and startups that bring the two worlds closer are seeing significant traction with customers, and investors. In the latest development, Ambience Healthcare — has developed what it describes as an “operating system” for healthcare organizations to help clinicians complete the substantial administrative work required of them — has raised $70 million to expand its business. Today, that business is focused in the U.S. and covers clinical work related to a wide range of ambulatory specialities (outpatient medical services) such as cardiology, oncology, pediatrics, ENT.
Ambience does not disclose how many customers it has, nor how much data it’s platform been used to process. But customers it discloses include UCSF, Memorial Hermann Health System, John Muir Health, The Oncology Institute, GI Alliance, Midi Health, and Eventus WholeHealth, and the investors in this round also speak to the traction it has seen so far.
Kleiner Perkins and OpenAI’s Startup Fund are co-leading this Series B, with Andreessen Horowitz and Optum Ventures (two of its very long list of big-name previous backers) also participating. The investment has a strategic element to it, as Kleiner Perkins and OpenAI have been co-investing in other vertically-focused AI startups, such as this $80 million round in legal AI specialist Harvey.AI this past December. This round brings the total raised by the company to $100 million. It’s not disclosing valuation, but for a little context, PitchBook estimated it at $126 million post-money when it raised its Series A in 2022.
Ambience Healthcare’s story starts with its two co-founders meeting originally at MIT. Michael Ng, who is the CEO, and Nikhil Buduma, its chief scientist, say they both experienced medical traumas in their lives — respectively a broken back and heart problems. A lingering consequence of that, they say, was an acute awareness of the ups and downs, and ins and outs, of patient and clinical processes. For Ng, the injury had felt like a “wake up call,” he said, which focused his mind on working on issues urgent and important to him. “What did I want to do with the rest of my life?”
It’s been said that getting through medical trauma as a younger person can be one of the things that compels a person to want to work in that field, and this seems to have been the case here. That focus led them to co-found a previous medical startup, Remedy Health. That was also focused on using AI in clinical environments, but in a very different way: it aimed to provide tools to clinicians to help diagnose conditions, “catching hidden high-risk diagnoses, and projecting the development of patient’s health into the future.” That may have proved to be too ambitious for its time: the startup didn’t raise beyond the seed stage and eventually closed its doors in 2020.
Ambience Healthcare is tackling a different, but no less important, aspect of the life of a clinician: the vast amounts of work that they need to process as part of their interactions with patients, forms that need to be filled out, and different actions that need to be taken, in order to get a patient through administrative, operational, and accounting systems. In a country like the U.S. where healthcare is inextricably connected to how someone will pay for that healthcare, and who will help with that, plus a strong current of litigiousness when and if something goes wrong in that process, administrative work is a very big deal.
In covering dozens of different ambulatory specialties, what Ambience means is that it’s covering the many datapoints a clinician will need to record and process when seeing patients for those different conditions. Its products include “AutoScribe” doing exactly what it sounds like, generating notes of conversations both in emergency and hospital environments; AutoCDI used for analyzing past conversations “and past EMR context to ensure that ICD-10 codes, CPT codes, and documentation all appropriately support each other, as well as full audit trails for revenue cycle teams”; AutoRefer to improve handoffs to other specialists; AutoAVS for after-visit summaries; and soon-to-launch AutoPrep to help prepare clinicians for appointments.
Ambience does not disclose what tech goes into its platform, nor what language models it’s using, but the investment from OpenAI is possibly a strong sign of at least one platform partner.
For now, the product does not aim to provide diagnoses as such but that is not off the roadmap, Ng confirmed, and as you might have guessed from the pairs’ prior experience.
Ambience is working in a nascent space, but that does not mean that it’s not very crowded. CBInsights in May last year tracked that medical “co-pilot” tools had raised some $240 million in funding, but at least another $175 million can be added to that from this round and some of the company’s bigger competitors. Corti, a Danish startup that does have ambitions to provide end-to-end AI assistance, from admin to diagnosis, raised $60 million last year from big investors. Nabla out of Paris raised $24 million last month and has a valuation of $180 million and is working with some big names itself, including Kaiser Permanente in the U.S. Microsoft, OpenAI’s big partner, is also breaking a lot of ground with its own HealthBot. There have also been stumbles: Komodo, also backed by A16Z, in 2022 faced layoffs.
It’s a big enough opportunity, however, that those who are bullish on AI will continue to look for strong bets in the space to advance it. “Healthcare is one of AI’s most promising opportunities to create an outsized positive impact on the world. Ambience Healthcare has built an incredible team to focus on providing a complete ecosystem of products that seamlessly fit into the workflow of practitioners, pushing both AI and medicine forward,” said Brad Lightcap, COO of OpenAI and manager of the OpenAI Startup Fund, in a statement.
