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CB Insights | AI in Healthcare

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The number of startups entering the healthcare AI space has increased in recent years, with over 50 companies raising their first equity rounds since January 2015. Deals to healthcare-focused AI startups went up from less than 20 in 2012 to nearly 70 in 2016.

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CB Insights | AI in Healthcare

  1. 1. #AIHealth ARTIFICIAL INTELLIGENCE IN HEALTHCARE Emerging trends, investments, AI in oncology
  2. 2. #AIHealth WEBINAR RECORDING WILL BE DISTRIBUTED IMMEDIATELY AFTER www.cbinsights.com 2 The presentationwill also be sent to you. Feel free to share with colleagues. The resolution of some slides may be suboptimal due to the webinar software. Those slides will look fine in the presentation that we send you. http://support.citrixonline.com/en_US/Webinar
  3. 3. #AIHealth @cbinsights @deepashriv #AIhealth JOIN THE CONVERSATION ON TWITTER www.cbinsights.com 3
  4. 4. #AIHealth The technology market intelligence platform. CB Insights software lets you predict, discuss and communicate emerging technology trends using data in ways that are beyond human cognition. www.cbinsights.com 4
  5. 5. #AIHealth www.cbinsights.com 5See what other customers haveto say at http://www.cbinsights.com/customer-love The most publicly reference-able customers of anyone in the industry A FEW OF OUR HAPPY CUSTOMERS Kate Barrett Director, New Enterprise Associates “With CB Insights we can quickly and reliably aggregate data across the investing landscape, from sector trends to financing activity. The intuitive user interface and robust set of features have made it a go-to resource for our team, and the customer support is second to none...”
  6. 6. #AIHealth Deepashri Varadharajan @deepashriv dvaradharajan@cbinsights.com www.cbinsights.com 6 ABOUT THE PRESENTER Tech analyst & writer, CB Insights Focuses on artificial intelligence, robotics, and cancer therapeutics. Formerly worked at Al Jazeera America as a reporting fellow and a production assistant. Has worked as a reporter in India and the United States, with healthcare as one of the focus areas. Graduate of Columbia University Journalism School.
  7. 7. #AIHealth 8 11 26 34 44 AI in healthcare startup landscape Investment trends, deals by geography, new startups in the space Corporate participation Spotlight: AI in oncology Recent deals & trends to watch www.cbinsights.com 7 TABLE OF CONTENTS
  8. 8. #AIHealth AI In Healthcare: STARTUP LANDSCAPE www.cbinsights.com 8
  9. 9. #AIHealth HEALTHCARE EMERGES AS HOTTEST AREA OF INVESTMENT Deals to AI startups in healthcare have been dominating over deals to other categories in the last 2 years. As of 9/1/2016, there were 50 equity deals to startups applying machine learning algorithms to solve healthcare-related problems. www.cbinsights.com 9 ARTIFICIAL INTELLIGENCE: CATEGORY HEATMAP 2012-2016 (as of 7/7/2016) No. of deals Min Max CATEGORY 2011 2012 2013 2014 2015 2016YTD Healthcare Advertising, Sales & Marketing Core AI Business Intelligence Security Finance IoT/Wearables Customer Relationship Management Personal Assistant/Productivity Education
  10. 10. #AIHealth 90+ STARTUPS TRANSFORMING HEALTHCARE WITH AI Khosla Ventures is the most active VC investor, having backed 5 unique companies on the map: Lumiata, Ginger.io, Zebra Medical Vision, Bay Labs, and Atomwise. Imaging & diagnostics is the most crowded category. 6 out of 9 startups using AI in drug discovery have VC backing. www.cbinsights.com 10source: https://www.cbinsights.com/blog/artificial-intelligence-startups-healthcare/ VIRTUAL ASSISTANTS DRUG DISCOVERY WEARABLES EMERGENCY ROOM & HOSPITAL MANAGEMENT MEDICAL IMAGING & DIAGNOSTICSINSIGHTS & RISK MANAGEMENT LIFESTYLE MANAGEMENT & MONITORING HEALTHCARE RESEARCH MENTAL HEALTH NUTRITION MISCELLANEOUS istock.com/hilch
  11. 11. #AIHealth Equity Funding Trends: DEALS, DOLLARS, ACTIVE INVESTORS www.cbinsights.com 11
  12. 12. #AIHealth Global equity funding since 2012: $1.5 BILLION across 188 DEALS www.cbinsights.com 12
  13. 13. #AIHealth DEALS ON TRACK TO REACH RECORD-HIGH LEVELS IN 2016 Deals were up by nearly 60% in 2015, and deals are projected to reach record-high levels by the end of 2016. The funding peak in 2014 was driven by 2 mega-rounds raised by Flatiron Health and Butterfly Networks. www.cbinsights.com 13source: https://www.cbinsights.com/blog/ai-healthcare-deals/ $30 $71 $480 $268 $597 $892M (Full- Year Projection) 19 21 38 60 50 71 (Full-Year Projection) 2012 2013 2014 2015 2016 AI IN HEALTHCARE:YEARLY FINANCING HISTORY Disclosed Funding ($M) Deals 2012 - 2016 YTD (9/1/2016)
  14. 14. #AIHealth A NEW UNICORN EMERGES IN Q2’16 China-based biotech startup, Tencent-backed iCarbonX, joined the unicorn club in Q2’16. It raised a $154M Series A mega-round. Deals and dollars peaked in Q1’16. Funding was driven by another mega- round raised by Flatiron: a $175M Series C round. www.cbinsights.com 14source: https://www.cbinsights.com/blog/ai-healthcare-deals/ $2 $5 $13 $11 $11 $22 $12 $25 $52 $157 $32 $238 $40 $55 $54 $120 $298 $234 3 3 7 6 3 2 7 9 7 7 12 12 13 14 14 19 22 20 2012 2013 2014 2015 2016 AI IN HEALTHCARE:QUARTERLY FINANCING HISTORY Disclosed Funding ($M) Deals Q1'12-Q2'16
  15. 15. #AIHealth www.cbinsights.com 15 COMPANY AMOUNT/ROUND QUARTER ROUND INEVSTORS $175M/Series C Q1'16 Casdin Capital, Roche Venture Fund, Baillie Gifford & Co., Allen & Company $154M/Series A Q2'16 Tencent, Vcanbio $130M/Series B Q2'14 First Round Capital, LabCorp, Google Ventures $100M/Series C Q4'14 Aeris Capital, Stanford University AI IN HEALTHCARE: TOP DEALS 2012-2016YTD (as of 9/1/2016)
  16. 16. #AIHealth DIAGNOSTICS AND RISK ANALYTICS DRAW MOST DEALS IN 2016 Imaging & diagnostics dominated 2015, and is at par with insights & risk analytics so far this year. Deals to lifestyle management & monitoring picked up in 2015. Virtual assistants, and AI startups in mental health still have room for further investment activity. www.cbinsights.com 16 AI IN HEALTHCARE: CATEGORY HEATMAP 2012-2016 (as of 8/30/2016) No. of deals Min Max CATEGORY 2012 2013 2014 2015 2016YTD Insights & Risk Analytics Lifestyle Management & Monitoring Imaging & Diagnostics Drug Discovery Emergengy Room & Hospital Management Wearables Virtual Assistants Mental Health Research Nutrition Miscellaneous
  17. 17. #AIHealth 90+ STARTUPS TRANSFORMING HEALTHCARE WITH AI The imaging & diagnostics space is getting increasingly crowded. Khosla Ventures is the most active VC investor. It backed 5 unique companies on the map. Healthcare-focused startups are also competing with general- purpose AI companies like Ayasdi and H2O.ai. www.cbinsights.com 17source: https://www.cbinsights.com/blog/artificial-intelligence-startups-healthcare/
  18. 18. #AIHealth DIAGNOSTICS AND RISK ANALYTICS DRAW MOST DEALS IN 2016 Imaging & diagnostics dominated 2015, and is at par with insights & risk analytics so far this year. Lifestyle management & monitoring startups have also seen an increase in investment activity. Areas with potential for increased investment activity are virtual assistants, and AI in mental health. www.cbinsights.com 18 AI IN HEALTHCARE: CATEGORY HEATMAP 2012-2016 (as of 8/30/2016) No. of deals Min Max CATEGORY 2012 2013 2014 2015 2016YTD Insights & Risk Analytics Lifestyle Management & Monitoring Imaging & Diagnostics Drug Discovery Emergengy Room & Hospital Management Wearables Virtual Assistants Mental Health Research Nutrition Miscellaneous
  19. 19. #AIHealth 90+ STARTUPS TRANSFORMING HEALTHCARE WITH AI The imaging & diagnostics space is getting increasingly crowded. Khosla Ventures is the most active VC investor. It backed 5 unique companies on the map. Healthcare-focused startups are also competing with general- purpose AI companies like Ayasdi and H2O.ai. www.cbinsights.com 19source: https://www.cbinsights.com/blog/artificial-intelligence-startups-healthcare/
  20. 20. #AIHealth EARLY-STAGE DEALS DOMINATE Seed and Series A deals accounted for over 50% of the deal share from 2012-2014, and over 60% of the share from 2015 onwards. www.cbinsights.com 20 37% 48% 32% 50% 48% 42% 14% 26% 18% 14% 11% 19% 13% 2% 14% 13% 3% 4% 5% 3% 3% 2% 2% 5% 19% 13% 23% 16% 2012 2013 2014 2015 2016 AI IN HEALTHCARE:DEAL SHARE BY STAGE Seed/Angel Series A Series B Series C Series D Series E+ Other 2012 - 2016 YTD (as of 9/1/2016)
  21. 21. #AIHealth NEW STARTUPS VENTURE INTO THE SPACE Around 50 startups have raised their 1st equity rounds since January 2015. One-third of them are in imaging & diagnostics. www.cbinsights.com 21source: https://www.cbinsights.com/blog/artificial-intelligence-healthcare-new-startups/
  22. 22. #AIHealth NEW STARTUPS VENTURING INTO THE SPACE (CONTD.) Some of the most recent startups to join the club are India-based diagnostics company Advenio TecnoSys, cloud platform Proscia, and medical records startup Medal. The pace slowed down in Q2’16, after 2 record- setting quarters. www.cbinsights.com 22source: https://www.cbinsights.com/blog/artificial-intelligence-healthcare-new-startups/ AI IN HEALTHCARE A TIMELINE OF 1ST EQUITY FUNDING
  23. 23. #AIHealth MAJORITY OF DEALS WERE RAISED BY US STARTUPS 77% of the deals went to startups in the United States, but there were notable investmentsin countries including Israel, Canada, China, and India. www.cbinsights.com 23source: https://www.cbinsights.com/blog/ai-healthcare-deals/ 77% 9% 5% 2%2% 6% AI IN HEALTHCARE:DEAL SHARE BY COUNTRY United States United Kingdom Israel India Canada Other 2012 - 2016 YTD (as of 9/1/2016)
  24. 24. #AIHealth A FEW RECENT DEALS OUTSIDE THE UNITED STATES In Q1’16, Kinnevik and Google DeepMind backed UK-based Babylon Health in a $25M Series A round. Bloomberg Beta backed Canada’s DeepGenomics in a seed round in Q4’15. Khosla Ventures and Marc Benioff participated in a $12M Series B round raised by Israel-based Zebra Medical Vision. www.cbinsights.com 24source: https://www.cbinsights.com/blog/ai-healthcare-deals/ ISRAELUNITED KINGDOM CHINA CANADA SWEDENNETHERLANDS INDIA IRELAND SPAIN SOUTH KOREA SINGAPORE
  25. 25. #AIHealth www.cbinsights.com 25source: https://www.cbinsights.com/blog/ai-healthcare-deals/ INVESTOR SELECT INVESTMENTS Zebra Medical Vision, Atomwise, Bay Labs, Lumiata, Ginger.io Zephyr Health, Flatiron, Predilytics Notable Labs, CloudMedX, AnalyticsMD Freenome, Atomwise, Enlitic Predilytics, Welltok, Explorys AI IN HEALTHCARE: MOST ACTIVE VCs 2012-2016YTD (as of 9/1/2016)
  26. 26. #AIHealth Corporate Participation: INVESTMENTS AND ACQUISITIONS www.cbinsights.com 26
  27. 27. #AIHealth IBM WATSON HEALTH The tech giant has been gathering healthcare data for its Watson Cloud through the acquisition of private companies. www.cbinsights.com 27
  28. 28. #AIHealth IBM TAPS HEALTH DATA WITH PRIVATE ACQUISITIONS In 2015, IBM acquired Ohio-based Explorys, — which gave it access to medical records and over 300 billion longitudinal data points1 — Texas-based population analytics startup Phytel, and made a public-to-private acquisition of Merge Healthcare. In early 2016, IBM acquired Michigan-based Truven Health Analytics. www.cbinsights.com 281 https://www-03.ibm.com/press/us/en/pressrelease/46585.wss
  29. 29. #AIHealth Anil Jain VP, IBM Watson Health www.cbinsights.com 29source: https://www.ibm.com/blogs/think/2016/03/02/a-data-revolution-coming-for-healthcare/ “You can see what’s going on here. IBM has collected an unparalleled body of diverse health-related data, including 300 million records spanning clinical, claims, and operational data.”
  30. 30. #AIHealth GOOGLE DEEPMIND DeepMind entered into an agreement with UK’s National Health Service to access patient records to train its algorithms. It announced another collaboration with NHS’s Moorfields Eye Hospital. www.cbinsights.com 30source: https://deepmind.com/blog/
  31. 31. #AIHealth CORPORATE PARTICIPATION UP 3X SINCE 2013 There have been 13 corporate-backed deals so far in 2016. Intel Capital backed Lumiata in $10M Series B round; GE Ventures backed Arterys in a $5M Series A round; Horizon Healthcare Services backed GNS Healthcare in an undisclosed Series C round. www.cbinsights.com 31 $6 $32 $244 $132 $443 1 5 11 16 13 2012 2013 2014 2015 2016 YTD QUANTUMCOMPUTING ANNUALGLOBAL FINANCING HISTORY 2012 - 2016 YTD (9/7/16) Disclosed Funding ($M) Deals $14 (Full-Year Projection) $645 (Full-Year Projection) 19
  32. 32. #AIHealth www.cbinsights.com 32 COMPANY CORPORATE INVESTORS COMPANY CORPORATE INVESTORS Hearst Ventures, IBM Watson Group, Qualcomm Ventures, TriZetto Corporation Tencent, Vcanbio Horizon Healthcare Services, Celgene, Mitsui & Co. (U.S.A.), Heritage Provider Network Intel Capital, BlueCross BlueShield Venture Partners Roche Venture Fund, LabCorp, Google Ventures DeepMind Technologies, Innocent Drinks Illumina, Execute Technologies REV, TELUS Ventures BlueCross BlueShield Venture Partners, MassMutual Ventures AXA Strategic Ventures, Cantora Records Qualcomm Ventures, Google Ventures A FEW COMPANIES WITH CORPORATE BACKING 2012-2016YTD (as of 9/7/2016)
  33. 33. #AIHealth www.cbinsights.com 33 INVESTOR SELECT INVESTMENTS Zephyr Health, Flatiron, Predilytics Welltok, Predilytics iCarbonX, CloudMedX Arterys, Medaware AI IN HEALTHCARE: MOST ACTIVE CORPORATE INVESTORS 2012-2016YTD (as of 9/7/2016) Lumiata, Picwell Welltok, Pathway Genomics
  34. 34. #AIHealth Special Focus: FIGHTING CANCER WITH MACHINE LEARNING www.cbinsights.com 34
  35. 35. #AIHealth DRUG DISCOVERY MONITORING www.cbinsights.com 35 DIAGNOSTICS
  36. 36. #AIHealth IBM WATSON-BACKED STARTUP RAISES $40M SERIES E ROUND Pathway Genomics is a deep learning-based precision medicine startup focused on conditions including cancer and cardiac health. It raised a $40M Series E round from the IBM Watson Group in Q1’16. The company has a CB Insights mosaic score of 820/1000. www.cbinsights.com 36
  37. 37. #AIHealth NEW BLOOD TEST KIT FOR EARLY-STAGE CANCER DETECTION The company is conducting a research study for its kit, CencerIntercept Detect. The study analyzes gene mutations in high-risk individuals who have never been diagnosed with cancer. www.cbinsights.com 37https://www.pathway.com/healthy1000/
  38. 38. #AIHealth OTHER DIAGNOSTICS STARTUPS FOCUSING ON CANCER Philadelphia startup Freenome received $5.55M in seed money in Q2’16 from VCs including Andreessen Horowitz, Data Collective, and Founders Fund. Australia-based diagnostic imaging services company, Capitol Health, led a $10M Series B raised by Enlitic this year. www.cbinsights.com 38
  39. 39. #AIHealth MONITORING DIAGNOSTICS www.cbinsights.com 39 DRUG DISCOVERY
  40. 40. #AIHealth ATOMWISE PARTNERS WITH NOTABLE LABS www.cbinsights.com 40 Atomwise uses advanced machine learning algorithms for drug discovery and development. Disclosed funding: $6.12M Select Investors: Khosla Ventures, Data Collective, AEM Cloud Ventures, Draper Fisher Jurvetson, Y Combinator Notable Labs provides FDA-approved treatment recommendationsbased on the type of tumor. Disclosed funding: $4.61M Select Investors: Funders Club, Upside Partnership, Y Combinator
  41. 41. #AIHealth AI-BASED DRUG DISCOVERY PLATFORMS www.cbinsights.com 41 InSilico Medicine applies deep learning algorithms to drug discovery, for applications including cancer immunotherapy. Disclosed funding: $0.8M Select Investors: Deep Knowledge Ventures Globavir Biosciences uses a machine- learning platform to reduce drug discovery times. Disclosed funding: $0.15M Select Investors: Sorrento Therapeutics, Startx
  42. 42. #AIHealth DRUG DISCOVERY DIAGNOSTICS www.cbinsights.com 42 MONITORING
  43. 43. #AIHealth The Netherlands-based skin cancer app, SkinVision, uses computer vision to analyze skin lesions. It received a $3.5M corporate minority round in 2015 from dermatology company LEO Pharma. USING MACHINE VISION TO SCREEN FOR SKIN CANCER www.cbinsights.com 43source: https://www.cbinsights.com/blog/ai-startups-fighting-cancer/
  44. 44. #AIHealth Road ahead: RECENT DEALS & TRENDS TO WATCH www.cbinsights.com 44
  45. 45. #AIHealth www.cbinsights.com 45 COMPANY AMOUNT/ROUND ROUND INVESTORS $45M/Series A- II China Bridge Capital $8.5M/Series A Norwest Venture Partners, Point B Capital $4.3M/Seed VC Cota Capital, Rising Tide Fund, Liquid 2 Ventures, Storm Ventures $0.12M/Seed - II Techstars $0.1M/Seed Kstart $3.3M/Seed - II AI IN HEALTHCARE: RECENT DEALS Q3'16 Roman Abramovich TCP Venture Capital, A- Level Capital, Robin Hood Ventures, Emerald Development Managers $1M/Seed VC
  46. 46. #AIHealth COMPETING WITH CORE AI COMPANIES While healthcare-focused AI startups have seen significant investment over the past year and a half, they also face stiff competition from general-purpose AI companies that tailor their solutions to multiple industries and have made healthcare a focus. www.cbinsights.com 46source: https://www.cbinsights.com/blog/artificial-intelligence-healthcare-new-startups/ $97.9M $75.6M $143.8M $30.6M $3.1M
  47. 47. #AIHealth 21 HOSPITALS ACROSS CHINATO ADOPT WATSON FOR ONCOLOGY TO HELP PHYSICIANS PERSONALIZE CANCER CARE August 11, 2016 IN THE NEWS www.cbinsights.com 47
  48. 48. #AIHealth CBINSIGHTS.COM @ cbinsights dvaradharajan@cbinsights.com

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