Neko Raises $260M at $1.8B Valuation - Spotify Co-founder's Startup

Neko Health Secures $260 Million to Expand Preventative Healthcare Services

Stockholm-based Neko Health has garnered significant investment, reflecting growing consumer interest in proactive health management and disease prevention. Investors are demonstrating strong confidence in Neko’s vision.

Series B Funding and Valuation

The startup has successfully raised $260 million in a Series B funding round, establishing a post-money valuation of $1.8 billion. This capital injection will facilitate expansion into new geographical areas, continued development of its diagnostic capabilities, and the establishment of additional clinics to meet increasing demand.

Neko has already strategically expanded its technological resources. According to Hjalmar Nilsonne, Neko’s CEO and co-founder, the company discreetly acquired a startup specializing in sensor technology to enhance its data collection processes. The name of the acquired company was not disclosed.

Growing Patient Base and Demand

Currently, Neko’s waitlist exceeds 100,000 individuals, a substantial increase from the 40,000 reported just months prior. To date, the company has completed scans and evaluations for 10,000 patients at its clinics in Stockholm and London.

“A clear demand exists for a novel approach to healthcare,” stated Nilsonne. He shared this observation during a video conference from New York, where he is actively preparing for the launch of clinics within the U.S. market.

U.S. Market Prioritization

The United States represents a key strategic market for Neko, currently accounting for the largest number of individuals on its waitlist outside of Europe. Nilsonne emphasized, “We are committed to entering the U.S. market and believe we can make a significant contribution to the healthcare ecosystem here, enabled by this funding round.”

Investment Details

Lightspeed Venture Partners spearheaded this Series B round, with participation from General Catalyst, O.G. Venture Partners, Rosello, Lakestar, and Atomico. This follows a $65 million Series A round in 2023, led by Lakestar, Atomico, General Catalyst, and Prima Materia. Notably, Prima Materia, co-founded by Spotify’s Daniel Ek – also a co-founder of Neko – did not participate in this latest funding round.

Shifting Healthcare Landscape

This funding and Neko’s expansion occur during a period of evolving healthcare priorities globally. There is an increasing emphasis on preventative care to identify potential health issues before they escalate, particularly to manage the rising costs associated with chronic conditions in aging populations.

Simultaneously, technological advancements are transforming the medical field. New devices, data-driven insights, and applications powered by artificial intelligence are reshaping doctor-patient interactions, diagnostic capabilities, and patient expectations.

While the integration of these advancements isn’t always seamless, their momentum suggests a lasting impact, and Neko is positioned to capitalize on these changes.

The Neko Health Experience

A visit to a Neko Health clinic – characterized by a calm, futuristic, and minimalist design – involves an hour-long examination utilizing proprietary hardware and software, costing £300. This examination generates “millions of health data points,” according to Neko.

The assessment includes detection and counting of skin moles for skin cancer screening, as well as measurements of waist circumference, blood pressure, blood sugar, cholesterol, triglyceride levels, heart rate, and grip strength. These parameters are used to assess risk factors for metabolic syndrome, stroke, heart attack, and diabetes. A consultation with a physician and recommendations for follow-up care are also provided.

Customer Retention and Future Appointments

Neko reports a high rate of customer retention, with 80% of patients rebooking and prepaying for follow-up appointments scheduled one year in advance.

Company Origins

Neko’s inception was somewhat serendipitous. The company was co-founded in 2018 after Daniel Ek contacted Nilsonne via Twitter to discuss the healthcare market, prompted by a tweet from Nilsonne. Neither founder possesses a traditional background in healthcare; Nilsonne’s prior venture focused on climate technology.

It took six years to assemble a team and refine Neko’s integrated approach. Nilsonne acknowledged that the company initially launched with cautious optimism, unsure of market reception. However, demand now surpasses the company’s capacity.

Research and Development Focus

Looking forward, Neko is prioritizing research and development related to its medical hardware and software. The company recognizes that many existing medical devices are outdated, with an average age of 15 years for ECG machines in primary care settings.

“We have a different model where we’re vertically integrated, meaning we develop these devices, the software, and operate the clinics,” explained Nilsonne. Neko intends to release regular updates, incorporating additional measurement parameters and potentially offering tiered service levels at varying price points.

Nilsonne likened the current body scan to the original iPod, stating, “It’s an iconic product that people love, but no one uses an iPod today. It enabled Apple to invest in handheld computational devices. We see this as the beginning of a journey to provide affordable, high-quality preventative diagnostics, continually improving with each year.”

The funding will “allow us to double down and increase our investments in improving the product, ultimately addressing core problems in healthcare,” he added.

Competitive Landscape

This funding will also enable Neko to differentiate itself from competitors in the preventative healthcare space, such as Zoi in France and Aware in Germany. It also positions Neko distinctly from public health services like the NHS Health Check in the U.K., which covers similar areas of assessment.

Reports indicate that some of Neko’s early investors were eager to experience the company’s services firsthand, both for their personal health and to evaluate the investment opportunity.

Lightspeed partner Bejul Somaia will join Neko’s board as a result of this funding round, demonstrating the firm’s confidence in the company’s potential.