CB Insights | AI in Healthcare

#AIHealth
ARTIFICIAL INTELLIGENCE IN HEALTHCARE
Emerging trends, investments, AI in oncology

#AIHealth
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#AIHealth
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#AIHealth www.cbinsights.com 5See what other customers haveto say at http://www.cbinsights.com/customer-love
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#AIHealth
Deepashri Varadharajan
@deepashriv
dvaradharajan@cbinsights.com
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.

#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
TABLE OF CONTENTS

#AIHealth
AI In Healthcare:
STARTUP LANDSCAPE

#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.
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

#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

#AIHealth
Equity Funding Trends:
DEALS, DOLLARS, ACTIVE INVESTORS

#AIHealth
Global equity funding since 2012:
$1.5 BILLION
across
188 DEALS

#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)

#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.
$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
Q1'12-Q2'16

#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)

#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.
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

#AIHealth
90+ STARTUPS
TRANSFORMING
HEALTHCARE WITH AI
The imaging &
diagnostics space is
getting increasingly
crowded.
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.

#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.
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

#AIHealth
90+ STARTUPS
TRANSFORMING
HEALTHCARE WITH AI
The imaging &
diagnostics space is
getting increasingly
crowded.
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.

#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.
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)

#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/

#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.
AI IN HEALTHCARE
A TIMELINE OF 1ST EQUITY FUNDING

#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.
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)

#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.
ISRAELUNITED KINGDOM
CHINA
CANADA
SWEDENNETHERLANDS
INDIA
IRELAND
SPAIN
SOUTH KOREA
SINGAPORE

#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)

#AIHealth
Corporate Participation:
INVESTMENTS AND ACQUISITIONS

#AIHealth
IBM WATSON HEALTH
The tech giant has been gathering healthcare data
for its Watson Cloud through the acquisition of
private companies.

#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

#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.”

#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/

#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.
$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)
$14
$645
19

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)

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

#AIHealth
Special Focus:
FIGHTING CANCER WITH MACHINE LEARNING

#AIHealth
DRUG DISCOVERY
MONITORING
DIAGNOSTICS

#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.

#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/

#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.

#AIHealth
MONITORING
DIAGNOSTICS
DRUG DISCOVERY

#AIHealth
ATOMWISE PARTNERS WITH NOTABLE LABS
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.
Select Investors: Funders Club, Upside
Partnership, Y Combinator

#AIHealth
AI-BASED DRUG DISCOVERY PLATFORMS
InSilico Medicine applies deep learning
algorithms to drug discovery, for
applications including cancer
immunotherapy.
Select Investors: Deep Knowledge Ventures
Globavir Biosciences uses a machine-
learning platform to reduce drug
discovery times.
Select Investors: Sorrento
Therapeutics, Startx

#AIHealth
DRUG DISCOVERY
DIAGNOSTICS
MONITORING

#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/

#AIHealth
Road ahead:
RECENT DEALS & TRENDS TO WATCH

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

#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.
$97.9M $75.6M $143.8M $30.6M $3.1M

#AIHealth
21 HOSPITALS ACROSS CHINATO ADOPT WATSON
FOR ONCOLOGY TO HELP PHYSICIANS
PERSONALIZE CANCER CARE
August 11, 2016
IN THE NEWS

#AIHealth
CBINSIGHTS.COM
@ cbinsights
dvaradharajan@cbinsights.com

CB Insights | AI in Healthcare

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