Startups

Health Chatbots Are Proliferating, And VCs Love Them

We all want to get healthier. However, most of us would prefer if it didn’t have to involve things like vigorous exercise, sugar-free diets, less beer, and more medical exams.

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Far better to just download an app, click a few times, and get some quick advice. If we could avoid the expense and hassle of dealing with a live person, that’d be extra great.

Fortuitously, that is just the direction the AI-driven healthcare chatbot startup sphere wants to take us. And if funding velocity is any indication, founders are getting lots of cash to do it.

Over the past several quarters, venture investors have ploughed hundreds of millions into an assortment of companies developing health chatbots. Branded with catchy names like Woebot, Gia, and Youper, these primarily mobile apps can diagnose ailments, track symptoms, offer therapeutic advice, and connect people with appropriate medical professionals.

Below, we look at where the money is going, what growth could bring, and how your correspondent survived her first week of chatbot-driven health care.

The Money

Let’s start with the money. Per Crunchbase analysis, investors have put more than $800 million to work across at least 14 known startups developing some sort of health chatbot offering. We put together a list of those companies here, highlighting a few prominent players in the chart below:

The vast majority of funding has gone to a single company: London-based Babylon Health, which is developing an artificial intelligence-driven healthcare platform for medical professionals that includes a consumer-facing chatbot. Founded in 2013, Babylon has raised $635 million to date, including a $550 million Series C round announced in August.

But this isn’t shaping up as a winner-take-all space. Rather, there are several companies that have raised totals in the tens of millions, plus a number of seed-stage entrants with plenty of runway to scale.

Horses And Zebras

We don’t generally think of healthcare as an early adopter of emerging software tools. But in the case of chatbots, the industry is a good fit. That’s largely because AI-driven chatbots and diagnosticians favor looking at likeliest causes first.

There is a popular saying in medical diagnostics: “When you hear hoofbeats, think of horses not zebras.” That is, if you have the symptoms of a cold, it’s probably a cold. And that mild rash is probably a minor case of dermatitis that will go away soon.

This all sounds logical, but is a far cry from the diagnosis you would likely make Googling symptoms, which commonly leaves one convinced it’s a case of Bubonic Plague. Chatbots, as opposed to a simple search query, take users through a series of questions, narrowing down likely diagnoses as they proceed.

“That’s something software can do really well: Systematically ask the right questions and connect the right dots,” says Moran Snir, founder and CEO of Clear Genetics, a recently acquired startup that offers a chatbot named Gia to guide patients through the genetic testing process.

Snir sees applications like Gia as most effective for routine cases. The idea, she said, is to help scale and automate the vast majority of care that is routine, and to connect those who do need an expert as quickly and effectively as they can.

Fun With Chatbots

In my own limited experience with health chatbots, they do seem a cut above the old methodology of Googling symptoms. In many ways, they do a passable job mimicking an initial consult with a clinician, which usually involves answering basic questions about symptoms and health history.

One of the more heavily funded in the space, Ada, for instance, offered some helpful suggestions for an ongoing cold. The Berlin-based company has had more resources to build out it’s service than most, having raised nearly $70 million to date. The Ada app performs an assessment, then suggests what you could do next. This may include a visit to a doctor, pharmacist, specialist, or emergency care provider.

I also tried two mental health chatbots, Woebot and Youper. Both offer advice based on one’s self-described mental state. In my case, both were on the same track, suggesting I engage in gratitude journaling. While somewhat ungratefully annoyed at two chatbots telling me to be grateful, I would admit that their suggested exercises did seem potentially helpful, and certainly harmless.

Exits

Of course, investors don’t pour millions into chatbot developers based on what I think of their advice. They’re looking for returns, preferably big ones

Snir’s Clear Genetics offered some early validation that this emerging space can deliver big multiples. Last month, Invitae, a publicly traded provider of genetic tests, announced it had acquired the three-year-old company for $50 million in cash and stock. It’s an impressive return considering that San Francisco-based Clear had previously raised a mere $2.5 million in seed funding per Crunchbase.

With their ability to combine AI-driven analysis and user-friendly interfaces, it’s easy to envision health chatbots playing a role in a lot more of our routine medical queries in coming years.

At the end of the day, we’ll still need specialists. But perhaps an AI-driven chatbot can help for those less-urgent medical needs, reassuring us that our cold is probably just a cold, and gently suggesting that a little gratitude never hurt anyone.

Illustration: Li-Anne Dias.

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