Can Data Fix Healthcare? - Exploring the Potential

The TechCrunch Exchange: A Weekly Startup & Market Update

Greetings and welcome to this week’s edition of The TechCrunch Exchange, your go-to newsletter for insights into the startup world and financial markets. This newsletter is derived from the daily content featured on Extra Crunch, but is offered freely for your weekend perusal.

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This Week's Focus: Funding, Ventures, and Potential IPOs

Are you prepared to delve into discussions surrounding capital, emerging companies, and the latest speculation regarding initial public offerings?

Let's begin by examining the current financial landscape for startups and the broader market trends influencing their growth.

We will explore recent funding rounds, notable venture capital activity, and analyze the factors driving potential IPOs in the near future.

Key Areas of Discussion

• Startup Funding: Examining recent investment trends and the sectors attracting the most capital.
• Venture Capital Activity: Analyzing the strategies and investments of leading VC firms.
• IPO Rumors: Investigating the companies generating buzz and the likelihood of their public debuts.

The following sections will provide a detailed overview of these topics, offering valuable insights for entrepreneurs, investors, and anyone interested in the dynamic world of technology and finance.

Stay tuned for a comprehensive analysis of the latest developments and emerging opportunities within the startup ecosystem.

Could Data Solutions Revolutionize Healthcare?

While not a standalone solution, significant advancements in healthcare are achievable through the effective utilization of data. The company discussed herein is focused on precisely this objective.

This week, The Exchange engaged in conversation with Terry Myerson, CEO, and Lisa Gurry, CMO, of Truveta, a relatively new organization aiming to amass substantial data from healthcare providers. This data will be anonymized, aggregated, and then made accessible to external parties for research purposes.

This undertaking is ambitious, yet the Truveta team possesses a proven track record of managing large-scale projects. Myerson is widely recognized for his leadership role at Microsoft, second only to the top of the organizational structure, where he oversaw prominent products such as Windows. Gurry held a leadership position within the same organization, most recently concentrating on strategic planning for the Microsoft Store.

Their transition to a healthtech data company is noteworthy. Following his departure from Microsoft, Myerson collaborated with Madrona, a venture capital firm based in the Seattle area, and The Carlyle Group, a substantial investment firm specializing in private equity. Subsequently, several former Microsoft colleagues of Myerson found employment at Providence, a major healthcare provider. They contacted Myerson around the onset of the COVID-19 pandemic lockdowns. Initially, Myerson participated in exploratory discussions, but did not immediately join the team due to being homebound.

During this period, he became aware of a white paper developed by Providence outlining the potential of Truveta. The core concept was that a sufficiently large and diverse dataset, compiled from healthcare providers, could facilitate research across numerous disciplines. Myerson found the idea compelling and ultimately established the company. He then enlisted the support of former colleagues, including Gurry, to help build the organization.

Currently, Truveta employs approximately 50 individuals, with plans to expand to around 100 this year, according to Myerson.

Naturally, several questions arise. While still in its early stages, Truveta announced last week that it has secured commitments from 14 healthcare providers to contribute to its data initiatives. These organizations have also invested in the company, alongside Myerson himself.

The company’s business model was a point of interest. Myerson explained that Truveta will implement tiered pricing based on the data user. Commercial entities will be charged at a different rate than independent researchers.

Truveta’s immediate priorities include expanding its data collection efforts, finalizing its internal data structure, gathering feedback from researchers, and eventually enabling commercial data access.

The existing inequities within the American healthcare system – a point emphasized by both Truveta executives during the discussion – present a significant market opportunity for the company to drive improvement and address biases.

The conversation with Myerson and Gurry felt somewhat unusual, given my previous interactions with them regarding Microsoft’s extensive platforms. It will be interesting to observe how quickly they can evolve Truveta from a promising concept into a commercially viable enterprise, and ultimately, how substantial its growth can become.

Market Updates

Recent developments have been numerous and require attention. For instance, the financial performance of Adyen has been released. The European payments company announced second-half revenues totaling €379.4 million, representing a 28% increase year-over-year.

Furthermore, the company reported an EBITDA of €236.8 million. This demonstrates the potential for profitability within the fintech sector. (It is worth noting that Adyen’s financial results are essential reading for anyone following Stripe’s valuation and potential IPO.)

Several investment rounds also occurred that warrant discussion. CloudTalk’s recent $7.3 million Series A funding is a prime example. The Slovakia-based company had previously secured a $1.6 million seed round in 2019.

CloudTalk specializes in providing cloud-based telephony solutions for call centers, as indicated by its name. The company benefited from the surge in remote work during 2020.

In a statement, CloudTalk confirmed that while growth didn’t mirror the explosive gains seen by companies like Zoom, demand for its services significantly surpassed expectations in 2020. This positive trend contributed to its successful funding round.

The Exchange also investigated the company’s approach to pricing models – specifically, subscription versus consumption-based pricing. This is a growing point of discussion among software professionals.

CloudTalk employs a hybrid pricing strategy, charging for both user seats and actual usage. The company believes this approach provides “a good balance for both parties,” offering customers predictable costs.

CloudTalk is a company worth monitoring. Similarly, Zolve, a neobank focused on serving expats, has also been gaining attention. TechCrunch recently published an article about Zolve; further details can be found here.

Additionally, Robinhood was the subject of a Congressional hearing this week. While largely uneventful, the hearing did offer insights into the fintech giant’s business operations.

The past week also saw significant investment in already competitive startup areas. Further funding was allocated to companies specializing in OKRs, prompting questions about venture capitalists’ strategies for investing in related businesses.

Public secured several hundred million dollars in funding, and low-code platform OutSystems raised $150 million. Overall, it was an exceptionally active week for the startup ecosystem.

A Collection of Updates

Let me share a few noteworthy data points. Initial performance indicators for Clubhouse are now aligning with the considerable attention the platform has received. User engagement is increasing significantly, resulting in total downloads exceeding 10 million.

Furthermore, Substack has surpassed 500,000 subscribers, a milestone that was previously unreported. This represents substantial growth!

In other news, Kin, a Chicago-based insurtech startup specializing in home insurance, has reached $10 billion in “total insured property value” this week. The Exchange inquired about the company’s financial model.

It’s relatively easy to increase premium volume by underselling, so understanding the economics is crucial. Ruth Awad, representing Kin, stated that their “loss rate is 53% and gross margins are 32%.”

These figures are quite positive, particularly considering the rapid evolution of the insurtech sector from experimental ventures to publicly successful businesses. Kin is a company worth monitoring closely.

Finally, remember to show your support for local heavy metal bands this weekend.

Alex