Healthcare AI startup OpenEvidence raises $250M at $12B valuation – SiliconANGLE

OpenEvidence Inc., a startup that develops artificial intelligence software for physicians, today disclosed that it has raised $250 million in funding.

Thrive Capital and DST Global led the investment. It values OpenEvidence at $12 billion, more than 10 times what the company was worth after its first funding round last February. The startup has raised a total of $750 million in that time frame.

OpenEvidence provides a free ChatGPT-like research tool for the healthcare sector. It searches medical journals for information that can help doctors formulate a patient diagnosis. Furthermore, OpenEvidence can identify potential treatment options and generate a side-by-side comparison.

Medical associations publish treatment guidelines that explain how physicians should go about delivering care. Those documents are usually refreshed every few years. According to OpenEvidence, doctors can use its platform to identify quickly how a newly updated set of guidelines is different from the previous edition and quickly get up to speed.

“If a doctor tried to stay current by reading only the new evidence in the top 10 medical journals and only the most recent changes to their specialty guidelines, it would take nine hours of their day, each day,” said founder and Chief Executive Officer Daniel Nadler. “Without a technology like OpenEvidence, doctors may miss critical new findings or guidelines simply because they lack the time to find them.”

The software also functions as a clinical education tool. Medical schools can use OpenEvidence to generate exam questions. Medical students, in turn, can use it as a study assistant. Each prompt response includes citations that enable users to verify the AI-generated content and read further about the topic.

Under the hood, OpenEvidence is powered by AI models focused on different clinical subspecialties. A “conductor” AI analyzes each prompt and sends it to the model best suited to provide an answer. The algorithms generate prompt responses using clinical data it sources through partnerships with medical journals and medical associations.

The company disclosed that its platform is used by over 40% of the physicians in the U.S. OpenEvidence helped those doctors treat more than 100 million patients last year.

The company’s large installed base may give it significant revenue growth potential. Currently, OpenEvidence makes money by displaying ads in its platform’s interface. Over time, it could launch additional healthcare applications and promote them to the numerous doctors who use its AI. That opportunity might be one of the reasons OpenEvidence’s valuation has grown more than tenfold in the past year.

The company has already started expanding its focus beyond clinical question-answering. In August, it launched a tool that doctors can use to create medical notes and enrich them with external healthcare data.

Earlier this month, OpenAI Group PBC introduced a feature called ChatGPT Health that can answer consumers’ medical questions. The company likely has the resources to create a more sophisticated version of the tool capable of fielding inquiries from clinicians. OpenEvidence’s new funding round should put it in a better position to address potential future competition from OpenAI and other larger market players.

According to the company, the capital will go toward research and development initiatives. OpenEvidence will also use to the funds to procure computing infrastructure. 

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