Clinical pathways are the currency of health tech

As healthcare becomes more entrenched in the digital revolution, the need for an approved set of protocols for care delivery — clinical pathways — is becoming increasingly critical.

Clinical pathways, as defined by the Children’s Hospital of Philadelphia, are the “standardization of care that translates guidelines and/or evidence into localized infrastructure and processes.” These processes have significant financial implications, as they can decrease payer (insurance) denials, allow providers to enroll in performance-based reimbursement, or help resource-constrained provider systems better allocate financial resources.

These financial benefits, coupled with current macroeconomic forces — the struggle for profitability in hospital systems, the rise of team-based care (via non-physicians), the challenges of utilization management at scale for insurance companies, and strict legislation around patient communication and healthcare systems interoperability requirements — have paved the way for pathways to become the de facto operating system for healthcare.

Pathways provide a currency for patients, providers, payers, and technology companies to prove a return on investment (ROI), both clinically and financially. Ultimately, this has created a unique opportunity for emerging and legacy healthcare companies to build around pathways, leveraging new datasets, delivering novel reimbursement models, preparing for and complying with new transparency and interoperability legislation, and utilizing advanced AI to provide personalized understanding and delivery of information.

Data is the driver of pathway’s success in clinical and operational settings

In the past, national guidelines dictated decisions made all the way down to the local level. Now, local, and even personalized, evidence-based pathways are driving decisions, thanks to the ability to access, create, and analyze new datasets.

Access to data, standardization of data rights, and the utilization of HIPAA-compliant collaboration tools, such as Datavant, will continue to improve compliance and create a more democratized, fine-tuned system of analysis for personalized pathways. The Centers for Medicare & Medicaid Services (CMS), under advisement from several healthcare companies, is now implementing an approved format for hospital charges as single machine readable files (MRFs), which will be leveraged to standardize all charge information.

With the ability to access, create and analyze new datasets, personalized, evidence-based pathways are driving more healthcare decisions.

This will allow both large (national) and small (local) providers to access previously unavailable data that can then be used to enhance care coordination and delivery, promote quality improvement, advance research, and increase ROI.

We spoke with Eric Leroux and Dan Imler, emergency department MDs and the co-founders of clinical pathways startup Curbside, about the ability to utilize new data models in the transition from the national to the local level for clinical logic creation. They pointed out that while nationalized datasets have a role to play in insight generation, “the clinical and financial responsibility of point-of-care decision making is still inherently local . . . decisions must be governed there to have any real impact,” especially in value-based care constructs.

As more companies like Curbside and AvoMD work to bridge the gap between art (no guidelines) and science (NCCN guidelines) when creating pathways, we expect more investment in startups that focus on the intersection of digital health and fintech as evidenced-based pathways and localized reimbursement engines become more necessary.

Reimbursement models

Pathways have evolved as a “cornerstone of future reimbursement methodologies and quality efforts,” as described by Dr. Robin Zon in ASCO Connection. They can help providers avoid “time-consuming prior authorization and appeals with payers,” and capture “stage and molecular data for a more refined risk adjustment.” Today, clinical pathways can be used for reimbursement via a number of models, from value-based care (VBC) to legacy fee-for-service (FFS).

For example, CMS uses clinical pathways to create a benchmark for cost and quality in the Medicare Shared Savings Program (MSSP). Providers who can provide care at a lower cost than the benchmark and who can meet certain quality standards are eligible for shared savings.

VCs to recommerce startups: Let’s pop some tags

Recommerce is a concept as old as trade itself. Everyone knows thrift stores or has bought a used product before — it’s not a new concept. Yet, today it’s become one of the hottest topics for consumers, brands and investors alike with a record ~$6 billion of venture capital funding pouring into recommerce companies in 2021 and the market projected to reach $250 billion+ by 2027. That’s 5x faster growth than the overall retail market.

Why the sudden recommerce resurgence?

It’s largely due to the changing cultural and societal value placed on sustainability. We waste a lot of … everything. Within apparel and textiles alone, billions of dollar’s worth of products are destroyed, discarded or warehoused each year because brands overproduced or the item didn’t sell. Industry analysts estimate that the global fashion industry contributes up to 10% of all greenhouse gas emissions each year.  We can do better.

To understand how, look to Gen Z’s deep, generational emphasis toward ethical consumption. Gen Z has approximately $150 billion in spending power in the U.S., forecasted to comprise 40% of global consumers by the early 2020s. As Gen Z enters the workforce, they’re starting to flex their growing purchasing power with value-aligned, sustainability-oriented brands. This is made clear in a recent IBM poll where Gen Z indicated a willingness to pay a ~49% price premium for a basic white cotton T-shirt that was sustainably sourced and made.

Recommerce enters big brand boardrooms

Historically, brands had poor visibility into the secondhand market for their goods. Without being able to measure the impact on top and bottom line, recommerce was never at the forefront of boardroom discussions. However, the proliferation of successful third-party resale marketplaces like PoshMark, The RealReal and StockX have generated hundreds of millions in revenue and billion-plus valuations.

With more visibility into resale economics, coupled with shifting consumer sentiments toward sustainability, recommerce has now become a priority. One of the more progressive consumer companies of our time, Patagonia, has publicly stated they want ~10% of revenue to come from resale in the coming years, representing >$100 million (based on an estimated >$1 billion annual revenue).

This makes sense if you think about what recommerce offers brands: the ability to sell the same item multiple times with costs only related to the repurchase and logistics of the product. Given brands can control the price they pay for a good, it provides a compelling avenue to boost both top-line growth and bottom-line margin at little labor/production cost.

3 areas drawing VC investment

There are three core areas of recommerce getting VCs fired up: (1) managed marketplaces, (2) enabling tools and software and (3) applying recommerce to new consumer-facing industries. We’ll explore each below, along with some food for thought for founders building startups in this (re)emerging space.


There are two primary forms of recommerce marketplaces: (1) branded (e.g., StockX) or (2) white label where a startup manages the process for a brand (e.g., Trove). Recommerce companies manage the majority (or entirety) of the resale experience — from product intake and authentication to merchandising and shipping. Platforms typically have a small SaaS fee, but most revenue is generated via a take rate on goods sold, ranging from 10%-25%.

The type of marketplace largely depends on vertical. For example, branded marketplaces are well positioned for consumer electronics given the high price and slowing rate of innovation in new phone models — creating less of a cultural zeitgeist around having the latest phone. It also comes with a high level of diligence and a complex logistics process for quality assurance, which is less appetizing for existing device makers who would rather invest in R&D and marketing for the next version. This is one reason we’re seeing consumer electronics recommerce marketplaces like U.S. and Singapore-based Reebelo (an investment made by our firm) and Back Market (valued at $5 billion+) take off.

It’s a different story in fashion. White-label recommerce marketplaces give brands control of secondhand supply, adding unique inventory that attracts new customers and purchases. There’s a strong psychological element as well with C2C marketplaces having long suffered from a need to commoditize trust (whereas established brands benefit from an implicit degree of consumer trust).

How to proceed:

VCs to recommerce startups: Let’s pop some tags by Walter Thompson originally published on TechCrunch

Q1 2023 market map: SaaS cost optimization and management

When engaging with our portfolio companies as well as with new investment opportunities, we’ve noticed that “profitability” and “efficiency” are two words that are often grouped with “growth” in every sentence.

Three months into 2023, investors continue to use buzz words like “responsible growth,” “business efficiency” and “quality marketing” when explaining how VC-backed companies should do business this year. That may be true, but there is no textbook for how a company can actively reduce its budget without slowing down growth in the near term.

Over the past few months, we have examined, demo’d and reviewed over 30 companies that we define as “first-degree, gross-margin-enhancing businesses.”

What does this mean? The “first-degree” part of that has to do with the now. Investors are knocking at the door to see improvements every quarter. Companies that can help you with long-term efficiencies will not help you when you next look to raise money in six, 12 or 18 months.

The “gross-margin-enhancing” part of this definition is important because simply reducing costs in lieu of growth will not work. Likewise, maximizing growth with little sensitivity around costs won’t work in 2023.

saas cost optimization

Image Credits: Ibex Investors

In this article, we’ll look at emerging companies that can efficiently and effectively support organizations in their efforts to deliver growth while optimizing and managing costs in the near and long term.

Given the market right now, investors want to see companies following forecasts more than ever.

The value proposition of the companies in this mapping is to help businesses continue their growth journey while optimizing and reducing costs in their current business structure. That said, there is no-one-size-fits-all solution. For this reason, we have defined three key categories of gross margin enhancement:

  • Cloud infrastructure cost optimization and management.
  • Vendor stack cost optimization and management.
  • Next generation FP&A tools.

Cloud infrastructure cost optimization and management

There is a constant struggle to balance stepping on the gas to improve product (i.e., raise cloud spend) and pushback from the CFO’s office when it is time to cut back.

CTOs and technical leads know how to cut cloud costs, but it can be difficult to pinpoint to what degree a certain change can negatively impact a company’s top line, not to mention the time it takes to execute reduction and optimization requests repeatedly. Companies want to continue to grow and do it rapidly, but they simply cannot allow themselves the freedom to flex their cloud spend like in past years.

Several companies are solving these problems with different focuses: Finout, Cloud Zero, Vantage and Anodot support both enterprise and middle-market end users and offer solutions to manage the cloud as well as Kubernetes. Some of these players provide solutions not only to support key cloud providers but also other cloud infrastructure vendors (such as Data Dog and Snowflake).

Other companies focus on more specific use cases. For example, Kubecost focuses on Kubernetes management. There are also companies that aim to help you cut costs: Zesty (for cloud) and Cast (for Kubernetes) fall in this space.

Q1 2023 market map: SaaS cost optimization and management by Ram Iyer originally published on TechCrunch

Edtech’s honeymoon might be over, but expect a second boom

It’s obvious that periods of enormous growth won’t continue forever, but it’s still somewhat startling when they end. Edtech hasn’t been immune to the ongoing downturn, but at least the turn came at the end of a period that saw robust investment activity. Indeed, it’s very easy to forget just how far edtech has come in the past 2.5 years.

Per Dealroom and Brighteye Ventures’ paper, “The evolution of Edtech: activity in private and public markets,” there’s still hope for the sector, and edtech remains an enormous, underinvested opportunity. However, the momentum that has been building in recent years has slowed significantly as investors tighten their belts to better understand the more robust parts of the sector.

The public market pullback can largely be explained by the overall macro environment affecting tech and high-growth companies. Assessing individual cases, there is clear variation in the extent to which market caps have evolved, and there is some correlation with subsectors. Companies that appear to have more robust caps appear to be B2B SaaS companies, while MOOC-providers like Coursera and 2U have suffered significant declines. Of course, these changes are not only associated with overall macro trends and the subsector, they are inextricably linked to performance.

That said, it’s important to remember that publicly traded value represents a fraction of the overall edtech sector. The value of private companies is still growing, although at a slower pace than previous years.

Image Credits: Brighteye Ventures, Dealroom

Market consolidation continues, and IPOs are few and far between

After last year’s IPO fever, public exits have been rare thus far in 2022. Big public exits aren’t necessarily an appealing exit strategy in this climate, but M&A activity has already surpassed 2020 levels.

Bolstered by pandemic tailwinds and significant rounds raised in good times, edtech has begun to show signs of maturity in the form of major M&A activity led by the sector’s biggest names. Notably, Byju’s, edtech’s most valuable company, has bought 11 edtech startups since 2020 in an acquisition spree.

Edtech’s honeymoon might be over, but expect a second boom by Ram Iyer originally published on TechCrunch

H1 2022 cybersecurity product-led growth market map

Product-led growth is one of the most commonly discussed topics in the startup world as the market cap of public companies utilizing the growth tactic skyrocketed in recent years.

It’s no different in the cybersecurity space. Why? To find out, I analyzed more than 800 products from over 600 vendors using information from open sources, including Google, Gartner, CB Insights and startup/vendor lists from different sources.

The focus was on security products, not service providers, except companies that have “productized” their services, i.e., offered them as a product package, transparently priced per user, with the ability to sign up online, etc.

Of the 824 products reviewed, 151 can be described as product led.

The below map summarizes the state of product-led growth in the cybersecurity industry.

Image Credits: Ross Haleiuk

The categories are intentionally broad; the explanation of what was included in each category is provided below. Some companies have product offerings that fall under multiple categories; I have attempted to reflect these on the map as well.

Companies featured here are at the various levels of PLG maturity: While some have pursued the product-led growth strategy since inception, others have pivoted or are still in the process of making a pivot from being sales-led into PLG.

Companies that do not embrace ideas of openness and transparency will be pushed away from the market.

Trends defining PLG adoption

What’s pushing cybersecurity companies to adopt product-led growth? I observed several PLG-related trends in the cybersecurity space while preparing this market map.

Traditional sales channels have become inaccessible for startups

Chief information security officers (CISOs), leadership teams and midlevel managers have been bombarded with marketing and sales pitches by security vendors. Selling to the highest echelons of security leadership requires a large network, introductions and a large budget for invite-only events, dinners and other entertainment.

These top-down product pitches are not just expensive – they’re ineffective. Hundreds and thousands of vendors attempting to showcase security tools and solutions to security leaders can lead to “vendor overload.”

Security startups have constrained resources and cannot afford to “wine and dine” CISOs, and they don’t have the brand recognition to cut through the noise of vendor overload. With that, entrepreneurs are forced to look for new ways to acquire customers that would allow them to build businesses with reasonable unit economics and the ability to grow. PLG enables companies to lower the customer acquisition cost, bringing the total cost of revenue as close to zero as possible, enabling a hockey stick growth.

Value is a factor defining whether a certain segment can be product-led

Not all product categories in cybersecurity have an equal chance to benefit from the unit economics and growth potential PLG enables.

The factors that ultimately define whether a certain segment can be product-led are how tangible the product value is and how long it takes for a user to fully realize the value a product in question brings (“time to value”).

First, the product value needs to be well defined and easy to understand. In other words, a person using the product should be able to easily see the difference between “before” and “after.”

Developer-focused products and tools for technical security professionals have a clear edge here as they solve very specific problems their users’ experience, unlike segments like endpoint detection and response (EDR) that sell “security” in a broad sense. Being able to see the product value is not enough; the speed matters just as much. For example, if it takes months to see that the product has prevented ransomware, it’s unlikely people will upgrade to the paid version after 30 days.

One way to communicate the value of the product is to visualize the metrics describing it best. For example, an antivirus could send a daily notification about the number of viruses removed, while a compliance management tool can offer a dashboard with the number of compliance violations detected during the week.

Developer-focused and consumer collaboration tools are leading the PLG wave

Will quantum computing remain the domain of the specialist VC?

Market trends are the best indicators we have to judge the maturity of the quantum industry. While they don’t perfectly reflect technological progress, they showcase investors’ willingness to write checks for the industry.

In the next three to five years, quantum computers manufacturers are expected to generate revenue of $5 billion to $10 billion, according to Boston Consulting Group. McKinsey expects the chemical and pharma industries to be the first potential users of quantum computing, enabling the accurate simulation of larger numbers of atoms and molecules, which is not possible today using classical supercomputers.

Although many VCs seem to be new to quantum technologies, some investors foresaw this movement several years ago and are now making their first quantum exits.

Take IonQ, a U.S.-based manufacturer of ion-trapped quantum computers, for instance. The company was founded in 2015, and it went public in 2021 through a SPAC at a $2 billion valuation. Berkeley-based Rigetti will also go public through a SPAC this year, raising $458 million at a $1.5 billion valuation. The company is developing a superconducting quantum computer, which already could scale up to 80 qubits.

IonQ and Rigetti’s IPOs set the valuation benchmarks for the whole industry, which impact the valuations of all quantum deals. More importantly, these IPOs show venture capitalists could make money from the quantum industry without significant commercialization of the technology.

Today, a quantum processor is a complicated device requiring a lab environment. This makes cloud access to quantum processors preferable, which was not possible during the emergence of classical computers. As a result, quantum hardware manufacturers develop their own cloud-based operating systems. Right now, it is hard to imagine someone would build a large quantum OS company as Microsoft did in the 1980s.

“Although technology maturity will still take many years, the future winners in the quantum computing market will be determined in the next two years. We are expecting a first consolidation phase led by the 10 leading full-stack quantum hardware players,” said Benno Broer, CEO at Qu&Co. This is a path the quantum industry may follow, collecting pieces of the stack via acquisitions.

Quantum startups map, as of October 2021. Image Credits: Runa Capital

Back to the suture: The future of healthcare is in the home

The pandemic has highlighted some of the brightest spots — and greatest areas of need — in America’s healthcare system. On one hand, we’ve witnessed the vibrancy of America’s innovation engine, with notable contributions by U.S.-based scientists and companies for vaccines and treatments.

On the other hand, the pandemic has highlighted both the distribution challenges and cost inefficiencies of the healthcare system, which now accounts for nearly a fifth of our GDP — far more than any other country — yet lags many other developed nations in clinical outcomes.

Many of these challenges stem from a lack of alignment between payment and incentive models, as well as an overreliance on hospitals as centers for care delivery. A third of healthcare costs are incurred at hospitals, though at-home models can be more effective and affordable. Furthermore, most providers rely on fee for service instead of preventive care arrangements.

These factors combine to make care in this country reactive, transactional and inefficient. We can improve both outcomes and costs by moving care from the hospital back to the place it started — at home.

Right now in-home care accounts for only 3% of the healthcare market. We predict that it will grow to 10% or more within the next decade.

In-home care is nothing new. In the 1930s, over 40% of physician-patient encounters took place in the home, but by the 1980s, that figure dropped to under 1%, driven by changes in health economics and technologies that led to today’s hospital-dominant model of care.

That 50-year shift consolidated costs, centralized access to specialized diagnostics and treatments, and created centers of excellence. It also created a transition from proactive to reactive care, eliminating the longitudinal relationship between patient and provider. In today’s system, patients are often diagnosed by and receive treatment from individual doctors who do not consult one another. These highly siloed treatments often take place only after the patient needs emergency care. This creates higher costs — and worse outcomes.

That’s where in-home care can help. Right now in-home care accounts for only 3% of the healthcare market. We predict that it will grow to 10% or more within the next decade. This growth will improve the patient experience, achieve better clinical outcomes and reduce healthcare costs.

To make these improvements, in-home healthcare strategies will need to leverage next-generation technology and value-based care strategies. Fortunately, the window of opportunity for change is open right now.

Five factors driving the opportunity for change

Over the last few years, five significant innovations have created new incentives to drive dramatic changes in the way care is delivered.

  1. Technologies like remote patient monitoring (RPM) and telemedicine have matured to a point that can be deployed at scale. These technologies enable providers to remotely manage patients in a proactive, long-term relationship from the comfort of their homes and at a reduced cost.

Taking consumer subscription software to the great outdoors

The pandemic has been extremely painful for many. But as lockdowns lifted and people began resuming their outdoor hobbies, mobile-first businesses have seen growth accelerate as consumers turned to digital tools to improve their time outdoors.

The Dyrt, for example, is the top camping app on the Apple and Google Play App Stores. The app sits at the confluence of two trends: An increased interest in outdoor recreation and travel, and an explosion in consumer subscription software (CSS).

The Dyrt launched its premium offering in 2019, The Dyrt PRO, in time to take advantage of the rising number of Americans making the great outdoors part of their lifestyle. A year later, it had a new subscriber every two minutes paying for features like offline maps and detailed camping information.

CSS businesses at the forefront of outdoor activities have closed major deals in recent years such as hunting app OnX (Summit Partners), hiking app Alltrails (Spectrum Equity), Surfline (The Chernin Group) and mountain bike leader Pinkbike (Outside Media). Companies like Netflix and Spotify have trained consumers to pay monthly or annual fees for software that enhances their lives, creating a business model investors view as reliable and poised for growth.

I think of different outdoor activities almost like individual genres on Netflix. Dominating camping or surfing might be like capturing the streaming market for comedy or horror.

Fitness and the outdoor passion space is one of the most exciting CSS categories in a growing landscape that includes everything from family planning/management services to entertainment and education. I believe CSS is still in the early stages of its growth — perhaps where B2B SaaS was a decade ago.

So what sets apart the great CSS businesses from the good ones?

Passion equals profits on the CSS flywheel

The beauty of the CSS model is the complete alignment between the business and its customers. CSS companies don’t have to please advertisers, and they can design purely for their users.

This dynamic is particularly powerful for CSS companies in the outdoors space, which make your favorite outdoor activity better with performance analytics and enhanced information such as maps, reviews, air quality reports and fire warnings. Consumers are happy to spend money on the activities and hobbies they enjoy, and CSS companies are able to make pleasing those consumers their top priority.

The result is what I call the CSS flywheel, in which a quality CSS product attracts and retains loyal users. Those users contribute their data through posts, photos and reviews, which creates a better product that further attracts new users, and so on.

The CSS flywheel shows the cycle that results when a quality CSS product attracts and retains loyal users.

The CSS flywheel shows the cycle that results when a quality CSS product attracts and retains loyal users. Image Credits: GP Bullhound

When companies get this flywheel right, it’s incredibly appealing to investors, because of the advantages of scale in CSS. Each niche will probably be dominated by one or two players, and a given niche can have tens of millions of consumers.

Startups and investors are turning to micromobility subscriptions

Amid the chaos of the COVID-19 pandemic and the murky path to profitability for shared electric micromobility, an increasing number of companies have turned to subscriptions. It’s a business model that some founders and investors argue hits the profit center sweet spot — an approach that appeals to customers who are wary of sharing as well as paying upfront to own a scooter or e-bike, all while minimizing overhead costs and depreciation of assets.

Many investors think the subscription model will broaden the micromobility market, positioning it essentially as a software-as-a-service business, which achieves a higher multiple.

Across the United States, Europe, some of Canada and at least one Middle Eastern city, existing mobility companies are adding a subscription business line to their repertoire, and entirely new companies are being formed on the basis of the hardware-as-a-service model. But will this new playbook push the unit economics of micromobility in a positive direction? And what will determine which companies win at the subscription game?

In general, subscriptions for everything from groceries and streaming video to exercise equipment and clothing are on an upward slope. Subscription businesses are expected to grow at a rate of 30% this year, according to a 2021 study by digital services monetization company Telecoming.

Micromobility vendors keen to follow other industries into this model are focused on several factors, according to experts following the industry: the ease of scaling, return on investment and cost-per-mile to operate.

“Subscription services for a single vehicle are far more interesting and scalable than the subscription model that was trialed by the shared mobility services,” Oliver Bruce, angel investor and co-host of the Micromobility Podcast with Horace Dediu, told TechCrunch. “The cost per kilometer is just an order of magnitude smaller, and it’s not constrained by citywide caps.”

Shawn Carolan, managing director at Menlo Ventures, is also bullish on the micromobility subscription model because it makes more sense for the consumer, as most people will prefer to pay a low monthly fee rather than a higher upfront fee.

“The best customers are repeat customers, commuters or local neighborhood trips,” Carolan said. “Repeatedly paying per ride is both expensive and cognitively taxing. People want low friction in transportation. Getting from here to there shouldn’t require a lot of thought.”

The key players: E-bikes

Bird and Lime might dominate the shared micromobility space, but they’re not leading the subscription market, largely because their bikes and scooters are built to be heavier and more robust in order to handle city usage. Their operating systems are also designed to manage fleets and keep the vehicles in specific territories within a city. Bird and Spin have announced intentions to offer subscriptions, but so far there’s only been a chance to sign up for a waitlist.

Meanwhile, subscription services tend to offer lighter-weight vehicles that can be carried up flights of stairs or even folded down.

Swapfiets, the bike-sharing company with the distinctive blue front wheel, is one of the pioneers in the world of bike-sharing. In 2015, Richard Burger, Martijn Obers and Dirk de Bruijn started the Dutch company as university students in Delft when they realized that owning a bike could be somewhat of a hassle. The Netherlands is renowned for having more bicycles than people, but that doesn’t make it any easier to buy, sell and maintain them, especially with such high fees at bike shops.

“We asked how we could shift this and get only benefits from using a bike to go from A to B and not have all this hassle,” Burger told TechCrunch. “And for us, the subscription model was really the realization that would fix that.”

Telemedicine startups are positioning themselves for a post-pandemic world

Telemedicine, in its original form of the phone call, has been around for decades. For people in remote or rural areas without easy access to in-person care, consulting a doctor over the phone has often been the go-to approach. But for a large swath of the world used to taking half a day off work just for a 15-30 minute doctor’s appointment, it may seem like telemedicine was invented only last year. That’s mostly because it wasn’t until 2020 that telemedicine, in its myriad forms, debuted into the mainstream consciousness.

It’s impossible to predict how healthcare institutions will operate post-pandemic, but with so many people now accustomed to telemedicine, startups that provide services around virtual care continue to be poised for success.

Telemedicine has faced an uphill battle to become more relevant in the U.S., with challenges such as meeting HIPPA compliance requirements and insurance companies unwilling to pay for virtual visits. But when COVID-19 began raging across the globe and people had to stay home, both the insurance and healthcare industries were forced to adapt.

“It’s been said that there are decades where nothing happens, and then there are weeks when decades happen,” said StartUp Health co-founders Steven Krein and Unity Stoakes in the company’s 2020 year-end report. That statement couldn’t be truer for telemedicine: Around $3.1 billion in funding flowed into the sector in 2020 — about three times what we saw in 2019, according to the report. A health tech fund and insights company, StartUp Health counts Alphabet, Sequoia and Andreessen Horowitz as some of its co-investors.

Now that people see the benefits and conveniences of “dialing a doc” from the kitchen table, healthcare has changed forever. It’s impossible to predict how healthcare institutions will operate post-pandemic, but with so many people now accustomed to telemedicine, startups that provide services around virtual care continue to be poised for success.

The state of telemedicine

Major players in the field now look at the state of healthcare as, “before COVID and after COVID,” Stoakes told Extra Crunch. “In the post-pandemic world, there’s a significant transformation that’s occurred,” he said. “It’s all accelerated; the customers have shown up. There’s more capital than ever and consumers and physicians have adapted quickly,” he added.

In the U.S., healthcare is first and foremost a business, so while there are treatment approaches that have long been proven to improve patient outcomes, if they didn’t make sense financially, they weren’t instituted at scale. Telemedicine is a great example of this.

A 2017 study by the American Journal of Accountable Care showed that telemedicine can be quite useful for managing healthcare. “The use of telemedicine has been shown to allow for better long-term care management and patient satisfaction; it also offers a new means to locate health information and communicate with practitioners (e.g., via e-mail and interactive chats or video conferences), thereby increasing convenience for the patient and reducing the amount of potential travel required for both physician and patient,” the study reads.

But as we’ve seen, it took a global healthcare emergency to drive widespread adoption of virtual healthcare in the U.S. Now that investors recognize the potential, they are increasingly pouring money into startups that promise to take telemedicine to the next level. Some of the investors backing these newer companies include StartUp Health, Andreessen Horowitz, Sequoia, Alphabet, Kaiser Permanente Ventures, U.S. Venture Partners, Maveron, First Round Capital, DreamIt Ventures, Human Ventures and Tusk Venture Partners.