Randy Cheung

Alot of bad actors and a few good actors. $2.5T HC capital raised & $1T invested by PE in last decade. $31B in 2013 vs. $217B in 2021. We know the story. Misaligned incentives - unrealistic multiples, short-term profit focus, aggressive cost-cutting, unrealistic scaling, misunderstood market dynamics, just to name a few. However, our industry needs money. But our industry is more infrastructure asset class than tech start-up (James Nicholls gave me that epiphany). Mic drop on the lyrical genius of Alex Fair of MedStartr Ventures as he literally gives the whole story poetic justice as he reads HIS POEM on this "On The Road at VIVE" episode of The Reverse Mullet Healthcare Podcast w/BP2 Health. This is the perfect episode for a Friday afternoon! He and Paulo J Machado donned the actual reverse mullets and joined us back in February at #VIVE2024 to talk about the need for REAL change in healthcare, startup focus and investor expectations. It was one to remember and one that is in desperate need of a full-length follow-up episode. Give us a like and a watch or a listen https://lnkd.in/e4w4mjkv https://lnkd.in/egmK3kMB

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Here’s your recap of last week’s healthcare technology news 🗞️ 👇 🤖 AI Clinician Assistant • Carle Health is beginning a full-scale adoption of Nabla through their Epic integration.    • UVM Health Network signed an enterprise-wide agreement with Abridge.    • Regard closed a $61M Series B with an investment from Cedars-Sinai Health Ventures among others.    • Mass General Brigham published a Q&A discussing the results of its initial AI ambient scribe pilot and plans to roll out a wider implementation.    🔁 RCM • Greenway Health released a patient payment solution that integrates cost estimates, patient payments, and payment plans.    💼 Provider and Practice Administration • Kontakt.io released a new wearable tag that aims to enable understanding of patient journey, estimated wait times, room availability, physician time with patient, and more.    📋 Patient Administration • Cone Health is partnering with Lirio on an AI-driven intervention for patients with diabetes.    • SAIGroup acquired Get Well, giving it access to the firm’s AI platform. 🍎 VBC • P3 Health Partners is partnering with Innovaccer to leverage its physician engagement solution as well as its AI-driven analytics.    • HSBlox, Inc released an update to its CureAlign platform that includes tooling for improved care coordination and patient outreach.    • GrayHawk Health is implementing Innovaccer to optimize operations and improve efficiency. 🧠 Food for Thought • We’ve covered numerous studies in our newsletter highlighting the impact of tech on reducing physician burnout. It appears we’re finally seeing signs of widespread impact from these workflow and workload interventions: physician burnout dropped below 50% for the first time since 2020, according to the AMA. https://lnkd.in/eWhj94NB    • ONC released the new, proposed rule HTI-2 to advance interoperability and patient information access and sharing. We're looking forward to more expert takes in the coming days—feel free to send any good ones our way! https://lnkd.in/eyM7eDyq --- Reminder: you can sign up for the Elion Briefing to get the latest healthcare tech news delivered to your inbox each week 📬 👉 https://lnkd.in/e2UJ3ckP

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Health tech companies reported strong Q3 2024 earnings, driven by expanded offerings, rapid adoption of AI tools, and increased client demand. Here’s a recap of key updates: - Hims & Hers: A telehealth platform offering personalized treatments across mental health, sexual health, dermatology, primary care, and weight management. Q3 revenue jumped 77% to $401.6M, net income was $75.6M, and subscribers grew 44% to 2M. The company plans to launch a generic liraglutide in 2025 and raised its 2024 revenue forecast to $1.46B-$1.465B. - Doximity: A networking and workflow platform for medical professionals providing tools like telehealth, scheduling, and AI assistants. Revenue increased 20% to $136.8M, with AI tools leading growth and 1M prompts used in Q2. The company raised its 2024 guidance to $535M-$540M in revenue. - Waystar: A healthcare payment and revenue cycle management company serving 30,000+ clients across care settings. Revenue grew 22% to $240M, driven by rapid client adoption after a competitor’s cyberattack. The company raised 2024 revenue guidance to $926M-$934M and expects 2025 revenue near $1B.

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🎥 Exciting update: I recently joined Jody Tropeano Greene to discuss the DiMe Seal, a milestone in building trust and accountability in digital health. Check out our conversation here: https://lnkd.in/epMHYU5x 🌟 Launched at HLTH 2024, the DiMe Seal recognizes high-quality, trustworthy digital health software products. Since its debut, we’ve seen incredible momentum: 🏥 Healthcare systems and payers across the US are looking to the DiMe Seal to help de-risk their digital health software purchases 🌍 Digital health software developers across the world are recognizing the value of the DiMe Seal to distinguish their products in a crowded market 👉 Are you a developer of digital health software products? Pursue the DiMe Seal and join the leaders setting the standard for quality and trust in healthcare innovation. Register today and use the code HLTH25 for a 25% discount https://lnkd.in/eTb6rRbj Let’s continue to raise the bar for digital health together! 🚀 #DigitalHealth #DiMeSeal #HLTH2024 #Innovation #TrustInHealth

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This 👂 podcast episode and insight’s from a16z Bio + Health's Julie Yoo spoke so clearly to the fundamental challenge facing both 🩺 clinicians and 🏥 healthcare systems.  There is a huge disconnect between supply, in the availability of clinicians, and demand, in the increasing volume and complexity of healthcare needs. -     36% of physicians plan to reduce their hours next year according to the AMA -     48% of physicians reported feeling burned out in a 2024 Medscape survey At the same time, the demographic baby boomer bubble and steady increase in the prevalence of major chronic disease, which consumes up to 90% of healthcare expenditures according to some estimates, is driving demand. With this context, Yoo points to a major opportunity for AI adoption in healthcare in 2025. Yeah, a VC hyping a wave of new AI companies that will replace the decades of training and experience of clinicians, the skeptic would say.  But Yoo is thoughtful in pointing to the role AI can play, and is already playing, through solutions such as ambient, autonomous scribe solutions (of which local star Abridge is leading the pack) in not replacing, but freeing up productivity for clinicians. There is so much unstructured context in both the complexity of disease and treatment options and the social/emotional considerations that we shouldn't be looking for AI to *replace* clinicians. But companies are getting better at finding the structured, repetitive and time-consuming places where AI tools can *help* clinicians. Nearly two-thirds of doctors cited bureaucratic tasks as the leading contributor to burnout. Rigorously trained-AI driven solutions can be a force multiplier for clinicians, and I’ve seen several interviews where nurses and doctors go as far as to say some of these solutions are ”restoring their joy in practicing medicine”. Our health is precious; and we rightly want any technology engaging with it to be developed thoughtfully and thoroughly tested. This requires top AI talent and diverse and realistic training data. Pittsburgh’s strengths in both areas is why we are an emerging hub for data-driven healthcare. #AIinhealthcare #clinicianburnout #healthinnovation #digitalhealth

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The biggest topics in healthcare last year? The two Gs. GPT and GLP-1s. We’re continuing to innovate our GLP-1 care track, which includes personalized care from care teams supported by AI tools, that can help maximize outcomes for someone on a GLP-1. And what’s to come? I expect this year we’ll see: ⭐ Measuring digital health programs will shift (check out Omada’s VOI report for more on this) ⭐ Consolidation in the market - not all digital health companies will survive ⭐ An uptick in PBM and health plan partners to help employers offer GLP-1s with sustainable coverage plans Anything I missed?

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Redesign Health has launched its largest fund to date, securing $175M to support over 20 new healthcare startups. Founded in 2018, the venture builder has previously incubated more than 60 companies, including Scriptology and Vivid Health. The new fund aims to address challenges such as healthy aging, interoperability, and expanding sites of care. This funding underscores investor confidence in tackling the $4T healthcare market's persistent challenges.

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Here's another fundraising roundup spotted in the healthcare wilds 👀 🍃 ✅ Sword Health raised $130M (new valuation: $3B). ✅ Better Health raised $14M to deploy expanded payer partnerships. ✅ Alzheon, Inc. | Preserving Future Memories raised $100M Series E to advance development & commercialization of its Alzheimer’s treatment. ✅ CinRx Pharma raised $73M to continue its ‘Hub and Spoke’ model of startup formation. ✅ Eko Health raised $41M to scale AI-driven heart and lung disease detection. ✅ Anterior (formerly Co:Helm) secured a $20M Series A to unlock admin efficiencies for healthcare payers. ✅ SamaCare raised a $17M Series B to scale specialty drug prior authorization platform. ✅ Plenful secured a $17M Series A to streamline pharmacy operations with AI-powered workflow automation. ✅ Grayce raised a $10.4M Series A led by Maveron amid a caregiving crisis. ✅ Stitch Employment Services Inc PEO raised $8.75M in seed to support independent medical practices. ✅ Posterity Health secured $6M to fund expansion and technology acceleration. ✅ Sware raised $6M to accelerate life sciences innovation by automating FDA-mandated software validation. ✅ Keragon raised $3M, as announced in @Conno Christou’s LinkedIn post. As always, if I missed you, let me know! Each week I'm spotlighting an innovative healthcare startup. I just ask for a bit more transparency. All submissions are confidential; submit yours here 👇 https://lnkd.in/gF4DrAvJ Looking for more fundraising roundups, alongside healthcare industry news and analysis? Subscribe to Hospitalogy, my 2x/week newsletter. Join 33K+ other investors, executives, and healthcare professionals: https://lnkd.in/g-nfRqW6

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Excited for our webinar tonight: Investing in Healthcare Startups: An Angel Perspective When: tonight at 6 pm eastern Where: https://lnkd.in/dPUFNbhe We had had a couple last minute changes and I am very excited to have an engaging conversation with Thanasi Tsiodras, Dr. Shaun Kuan and Regina Prasad, MS. We will be discussing: 1. How to start investing in startups 2. Lessons from your winners and losers 3. What are some red flags in a startup 4. What is your diligence process like? 5. How do you get deal flow?  6. What is the ideal angel investor archetype? Who should invest in startups and who shouldn't. #healthcare #venturecapital #angelinvesting

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These unique advantages in venture capital are indeed compelling, which raises the question: Why haven't they been widely adopted in the industry? We can distill the resistance down to a few key misconceptions: 1. **Overreliance on Capital Influence**: The belief that "Having capital is sufficient to drive change" often leads to an external, top-down approach that may not align with the realities on the ground. 2. **Underestimating Physician Business Acumen**: The outdated notion that "Physicians lack business prowess" has been repeatedly disproven by numerous real-world examples across generations. 3. **Overvaluing Back Office Capabilities**: The assumption that "Our back-office provides superior insights and analysis" is flawed. In reality, the same fundamental principles apply across the board: successful exits, founder intelligence, robust deal flow, and iterative processes that optimize analytical costs. These misconceptions hinder the adoption of game-changing approaches in venture capital.

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Peter Birch from Talking HealthTech and I get down to the nitty-gritty of why 2025 might be the year of healthcare #interoperability.

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With $8.2B invested into digital health so far, 2024 is shaping up to be a $10-12B annualized investment year. This would make funding comparable to 2023. I suspect with continued venture investment, boards will require exits. One thing I’m particularly interested in is terms of recent acquisitions and growth equity rounds. What type of downside protection (e.g., structure) is not disclosed to media that protects the investor? Will funds who have specifically raised capital to buy stakes in VC-backed companies at significant discounts? And what revenue/EBITDA multiples are looking like for M&A in 2024/2025? Every founder has to spin their story in a positive light when speaking to media. I know this because PR agencies reach out to me about their clients (p.s. I don’t consider myself a member of the media). The private health tech market feels like it could significantly rip or drop in the next 12-24 months. Therefore, my general advice to early-stage founders is to assume you will not raise capital beyond your seed round. If the investor market heats up in 2025, you will have the option to raise a series A at that time if you’ve built a strong business. If you’ve already raised series c or beyond, then one of your goals will be to time the exit (M&A or IPO) appropriately so that you garner an attractive multiple. There are few private health tech startups that have founder board control, can reinvest positive cash flows, and stay private forever. So by necessity of the structure, exits are desired. - - - - Image Credit: Rock Health

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Imagine swallowing the competition whole. That's what many players in tech do via roll-up strategies, gobbling up smaller firms to deliver richer solutions and amass greater market share. Where else are roll-up strategies common? // HEALTHCARE Picture being a patient at a medical practice that’s been part of a roll-up in Healthcare Services. It's an industry ripe for roll-ups due to its fragmented nature and potential for greater efficiency. // CONSUMER SERVICES Or let's say you needed your HVAC serviced, and notice your local repairman is now part of a bigger Consumer Services entity? Centralized management and scale economy turn these localized businesses into roll-up targets. // FINANCIAL SERVICES Think about your insurance agent or wealth management advisor. They're working in complex, highly regulated environments. In the Financial Services sector, roll-ups offer an effective way to consolidate expertise, streamline operations, and enhance customer offerings. // MANUFACTURING Now, imagine driving past factories under a new name — the result of Manufacturing and Industrial Services roll-ups. Bulk purchasing reduces costs, enhances production capabilities, and expands geographical footprints. // REAL ESTATE Lastly, envision your real estate brokerage firm. The industry sees roll-ups as a strategic move to increase market penetration, enhance service offerings, and hike up portfolio value. Roll-ups play a huge role in most industries, rather like a snowball rolling downhill, gaining momentum, and size. Are you seeing roll-ups in your sector or considering M&A?

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Which founders fit the mold for success in healthcare? I spoke with Anne DeGheest, Founder and Managing Director at HealthTech Capital, about the key characteristics of successful #healthtech entrepreneurs. Listen to the full conversation here: https://lnkd.in/eqwUCkPx

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I’m worried about the state of venture capital and direct-to-consumer (DTC) healthcare startups. Hims & Hers is the poster child for DTC healthcare at $1.2B proj 2024 revenue and a $3.6B valuation. By most accounts, they have been an outlier success for DTC since bottoming out in May 2022. So why is this bad news for DTC healthcare? Because the market leader (Hims) trades at a 3x forward revenue multiple. And the category leader typically gets a higher valuation multiple than smaller startups. We see this phenomenon in private equity. They “roll up” smaller companies within the same category at a lower multiples just to create one larger platform that trades at higher multiples. Now back to DTC healthcare startups. If Hims commands a 3x revenue multiple, it’s not unrealistic that smaller, unprofitable startups may be valued 1-2x revenue at exit. At 2x revenue, a startup must generate $500M to produce a $1B exit in today’s market (depending on growth and profitability). Series A/B venture capitalists must see a pathway to $1B outcomes. And if the growth-stage investors with billions under management are less interested in DTC healthcare, the future funding rounds necessary for fueling growth are not guaranteed. Juxtapose this against 2017-2022 where DTC could raise Series B-E funding. Let’s take a DTC startup doing $25M after 3-4 years of operations and has already raised a Series A. By most accounts, it would be a phenomenal accomplishment. But today, investors will question the chances of that same company scaling from $25M to $500M revenue in the next 3-4 years with unknown future funding sources from Series B and beyond. You're stuck in VC-funding purgatory. Some of these companies will shut down. Some may sell for 1-3x revenue. And some may try to transition to profitable, cash-flowing businesses. All of which are certainly not the venture-backed goal the founders, investors, and employees often had in mind when first taking capital. I say this all with friends working at or starting DTC healthcare companies, I feel bad for them. I also feel bad for the patients who enjoy those products or services. To caveat (b/c I know people will object), there will be other DTC brands that exit for $1B+ (i.e., Ro). However, they were forged and scaled during a different time period where seemingly endless venture capital was available for DTC healthcare. Now we're in a different time with no end in sight. Thoughts?

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Recently, I had the opportunity to listen to a podcast featuring the CEO's of Prime Therapeutics and Cap Rx. Investing time to learn what I can has always been crucial to my growth, and this podcast hit the mark for me. I was able to uncover some nuggets of wisdom that I can use to educate myself further. It's always exciting to learn from industry leaders and gain insights that can help me excel in my field. https://lnkd.in/eZTMUmiu

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https://lnkd.in/gB_-yi-f Sharing a few thoughts on our Computational Care thesis, with a particular focus on the importance of clinical validation in building empathetic software solutions in a complicated environment. Based on the quality of conversations with founders and CEOs recently at HLTH and in the wild, now is a great time to build, deploy, and scale great software against hard problems in healthcare. We are seeing real progress, and we want to see even more bravery.

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The birth of the MedSLP Collective was an unexpected journey that began during my time running a mobile FEES business in New York. Despite support from medical professionals, we faced a challenge: SLPs weren’t making many FEES referrals. This revealed a crucial insight - many SLPs weren’t fully aware of the benefits for their patients. Our field needed more education. To address this, I started a blog and newsletter for the SLPs I worked with. What began as a modest effort unexpectedly sparked a movement, as the content spread rapidly, revealing a deep hunger for specialized knowledge among SLPs. As the blog gained traction, I found myself at a crossroads. The demands of a growing online presence competed with the mobile FEES business. Inspired by podcasts I listened to during long drives, I decided to transform the blog into The Swallow Your Pride Podcast, which debuted at #11 on the iTunes Science and Medicine chart. The podcast’s success clarified my mission: provide accessible, high-quality education to SLPs everywhere. This led to a membership platform offering bite-sized education, designed to fit into the busy lives of practicing SLPs. When I floated this idea, the response was astounding - 300 people signed up overnight. This journey has been transformative. It’s a testament to the power of listening to our colleagues, adapting to their needs, and continuously innovating how we share knowledge. The Collective and our membership platform are the fruits of this journey. They represent not just my vision, but our profession’s collective desire to grow, learn, and provide the best possible care for our patients. As we continue to evolve and expand our educational offerings, I’m reminded daily of the passion and dedication that defines our field. To everyone who has been part of this journey - thank you. Your enthusiasm, curiosity, and commitment to excellence continue to inspire and shape the future of our profession. The Collective was born from a simple desire to educate, but it has grown into a movement that empowers SLPs to provide better care and achieve their full potential. #medslp #medslpcollective #slpeducation

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