Katie Jacobs Stanton took an unusual and accidental path to becoming a healthcare investor.
After building products at Yahoo and Google, helping grow Twitter globally and spending time in the White House, she began angel investing on the side. In 2016, she joined the genetics testing startup Color Genomics as its chief marketing officer, where she got her first taste of working in the healthcare world. The position deepened her interest in the industry — and more particularly the role technology could play in improving it.
Stanton left the company in 2019 to launch Moxxie Ventures to invest in early-stage startups, including an increasing number focused on healthcare. Seven years after founding the firm, Stanton said she is still motivated by the enormous unmet needs in healthcare and the potential for AI to make the sector more efficient.
“In this world of increasing prices in healthcare and longer timelines to see your doctor, we’re seeing this pull of people needing better solutions at the consumer level, doctors needing more time with their patients, hospitals and health systems needing better tools to reduce costs and improve outcomes,” she remarked.
Some of the healthcare startups in Moxxie’s portfolio include Dandelion Health, which applies AI to real-world patient data to generate clinical insights; Pharos Health, which automates patient safety and quality reporting so nurses don’t have to do manual data work; Luminai, which automates workflows like claims processing, referrals and physician payments; and Throne Science, which makes a smart toilet sensor that monitors gut health and detects early signs of colon cancer.
In Stanton’s eyes, all these companies share something in common: founders with deep expertise who understand the problems they’re solving for their customers.
Below are three of the other boxes she needs checked when evaluating whether a healthcare startup is worth backing.
Founder with a healthcare background
Generic AI founders without healthcare experience rarely succeed in the space, Stanton noted.
She said healthcare startups need founders who have credibility with providers and/or payers, as well as a deep understanding of the healthcare industry and its regulatory and operational complexities. Without that expertise, even technically strong products will fail to gain adoption or navigate the system, Stanton explained.
Durability and defensibility
Because AI tools are becoming easy to build, investors have to ask questions like what makes this product unique, why this founder is the right person to solve the problem and whether the solution can survive in the heavily regulated healthcare world, Stanton stated.
She believes strong companies combine the following: well-suited founders, differentiators that set them apart from competitors, and true, quantifiable customer demand.
Solid distribution strategy
A great product alone isn’t enough. Stanton pointed out that startups also need a realistic plan to reach their customers and get the tool into the hands of hospitals, payers or patients.
For healthcare AI companies, distribution often means leveraging the leadership team’s credibility and networks to navigate the fragmented healthcare landscape and gain traction quickly.
Before Moxxie invests, the startup’s team needs to convince the firm that they know how to get in front of the right decision-makers and build trust with providers and payers, Stanton said.
Photo: DBenitostock, Getty Images
