cb insights | ai in healthcare

#AIHealth

ARTIFICIAL INTELLIGENCE IN HEALTHCAREEmerging trends, investments, AI in oncology

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The technology market intelligence platform.CB Insights software lets you predict, discuss and communicate emerging technology trends using data in ways that are beyond human cognition.


#AIHealth www.cbinsights.com 5See what other customers have to say at http://www.cbinsights.com/customer-love

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Deepashri Varadharajan

@deepashriv

[email protected]


ABOUT THE PRESENTER

Tech analyst & writer, CB Insights

Focuses on artificial intelligence, robotics, and cancer therapeutics.

Formerly worked at Al Jazeera America as a reporting fellow and a production assistant. Has worked as a reporter in India and the United States, with healthcare as one of the focus areas.

Graduate of Columbia University Journalism School.

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AI in healthcare startup landscape

Investment trends, deals by geography, new startups in the space

Corporate participation

Spotlight: AI in oncology

Recent deals & trends to watch


TABLE OF CONTENTS

#AIHealth

AI In Healthcare: STARTUP LANDSCAPE


#AIHealth

HEALTHCARE EMERGES AS HOTTEST AREA OF INVESTMENT

Deals to AI startups in healthcare have been dominating over deals to other categories in the last 2 years.

As of 9/1/2016, there were 50 equity deals to startups applying machine learning algorithms to solve healthcare-related problems.


ARTIFICIAL INTELLIGENCE: CATEGORY HEATMAP2012-2016 (as of 7/7/2016)

No. of deals

Min Max

CATEGORY 2011 2012 2013 2014 2015 2016YTD

Healthcare

Advertising, Sales & Marketing

Core AI

Business Intelligence

Security

Finance

IoT/Wearables

Customer Relationship Management

Personal Assistant/Productivity

Education

#AIHealth

90+ STARTUPS TRANSFORMING HEALTHCARE WITH AI

Khosla Ventures is the most active VC investor, having backed 5 unique companies on the map: Lumiata, Ginger.io, Zebra Medical Vision, Bay Labs, and Atomwise.

Imaging & diagnostics is the most crowded category.

6 out of 9 startups using AI in drug discovery have VC backing.

www.cbinsights.com 10source: https://www.cbinsights.com/blog/artificial-intelligence-startups-healthcare/

VIRTUAL ASSISTANTS

DRUG DISCOVERY

WEARABLES

EMERGENCY ROOM & HOSPITAL MANAGEMENT

MEDICAL IMAGING & DIAGNOSTICSINSIGHTS & RISK MANAGEMENT

LIFESTYLE MANAGEMENT & MONITORING

HEALTHCARE RESEARCH

MENTAL HEALTH

NUTRITION

MISCELLANEOUS

istock.com/hilch

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Equity Funding Trends: DEALS, DOLLARS, ACTIVE INVESTORS


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Global equity funding since 2012:

$1.5 BILLIONacross

188 DEALSwww.cbinsights.com 12

#AIHealth

DEALS ON TRACK TO REACH RECORD-HIGH LEVELS IN 2016

Deals were up by nearly 60% in 2015, and deals are projected to reach record-high levels by the end of 2016.

The funding peak in 2014 was driven by 2 mega-rounds raised by Flatiron Health and Butterfly Networks.

www.cbinsights.com 13source: https://www.cbinsights.com/blog/ai-healthcare-deals/

$30$71 $480 $268 $597

$892M(Full- Year Projection)

1921

38

60

50

71(Full-Year Projection)

2012 2013 2014 2015 2016

AI IN HEALTHCARE: YEARLY FINANCING HISTORY

Disclosed Funding ($M) Deals

2012 - 2016 YTD (9/1/2016)

#AIHealth

A NEW UNICORN EMERGES IN Q2’16

China-based biotech startup, Tencent-backed iCarbonX, joined the unicorn club in Q2’16. It raised a $154M Series A mega-round.

Deals and dollars peaked in Q1’16. Funding was driven by another mega-round raised by Flatiron: a $175M Series C round.


$2 $5 $13

$11

$11

$22 $1

2

$25

$52

$157

$32

$238

$40

$55

$54

$120

$298

$234

3 3

76

32

7

9

7 7

12 1213

14 14

19

22

20

2012 2013 2014 2015 2016

AI IN HEALTHCARE: QUARTERLY FINANCING HISTORY


Q1'12-Q2'16

#AIHealth www.cbinsights.com 15

COMPANY AMOUNT/ROUND QUARTER ROUND INEVSTORS

$175M/Series C Q1'16

Casdin Capital, Roche Venture Fund, Baillie Gifford & Co., Allen &

Company

$154M/Series A Q2'16 Tencent, Vcanbio

$130M/Series B Q2'14First Round Capital,

LabCorp, Google Ventures

$100M/Series C Q4'14Aeris Capital,

Stanford University

AI IN HEALTHCARE: TOP DEALS2012-2016YTD (as of 9/1/2016)

#AIHealth

DIAGNOSTICS AND RISK ANALYTICS DRAW MOST DEALS IN 2016

Imaging & diagnostics dominated 2015, and is at par with insights & risk analytics so far this year.

Deals to lifestyle management & monitoring picked up in 2015.

Virtual assistants, and AI startups in mental health still have room for further investment activity.


AI IN HEALTHCARE: CATEGORY HEATMAP2012-2016 (as of 8/30/2016)

No. of deals

Min Max

CATEGORY 2012 2013 2014 2015 2016YTD

Insights & Risk Analytics

Lifestyle Management & Monitoring

Imaging & Diagnostics

Drug Discovery

Emergengy Room & Hospital Management

Wearables

Virtual Assistants

Mental Health

Research

Nutrition

Miscellaneous

#AIHealth


The imaging & diagnostics space is getting increasingly crowded.

Khosla Ventures is the most active VC investor. It backed 5 unique companies on the map.

Healthcare-focused startups are also competing with general-purpose AI companies like Ayasdi and H2O.ai.


#AIHealth

DIAGNOSTICS AND RISK ANALYTICS DRAW MOST DEALS IN 2016

Imaging & diagnostics dominated 2015, and is at par with insights & risk analytics so far this year. Lifestyle management & monitoring startups have also seen an increase in investment activity.

Areas with potential for increased investment activity are virtual assistants, and AI in mental health.


AI IN HEALTHCARE: CATEGORY HEATMAP2012-2016 (as of 8/30/2016)

No. of deals

Min Max

CATEGORY 2012 2013 2014 2015 2016YTD

Insights & Risk Analytics

Lifestyle Management & Monitoring

Imaging & Diagnostics

Drug Discovery

Emergengy Room & Hospital Management

Wearables

Virtual Assistants

Mental Health

Research

Nutrition

Miscellaneous

#AIHealth


The imaging & diagnostics space is getting increasingly crowded.

Khosla Ventures is the most active VC investor. It backed 5 unique companies on the map.

Healthcare-focused startups are also competing with general-purpose AI companies like Ayasdi and H2O.ai.


#AIHealth

EARLY-STAGE DEALS DOMINATE

Seed and Series A deals accounted for over 50% of the deal share from 2012-2014, and over 60% of the share from 2015 onwards.


37%48%

32%

50% 48%

42%14%

26%

18%14%

11%

19%13%

2% 14%

13%3%

4%

5%3%

3%2%2%

5%

19%13%

23%16%

2012 2013 2014 2015 2016

AI IN HEALTHCARE: DEAL SHARE BY STAGE

Seed/Angel Series A Series B Series C Series D Series E+ Other

2012 - 2016 YTD (as of 9/1/2016)

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NEW STARTUPS VENTURE INTO THE SPACE

Around 50 startups have raised their 1st equity rounds since January 2015. One-third of them are in imaging & diagnostics.

www.cbinsights.com 21source: https://www.cbinsights.com/blog/artificial-intelligence-healthcare-new-startups/

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NEW STARTUPS VENTURING INTO THE SPACE (CONTD.)

Some of the most recent startups to join the club are India-based diagnostics company Advenio TecnoSys, cloud platform Proscia, and medical records startup Medal.

The pace slowed down in Q2’16, after 2 record-setting quarters.


AI IN HEALTHCAREA TIMELINE OF 1ST EQUITY FUNDING

#AIHealth

MAJORITY OF DEALS WERE RAISED BY US STARTUPS

77% of the deals went to startups in the United States, but there were notable investments in countries including Israel, Canada, China, and India.


77%

9%

5%2%2% 6%

AI IN HEALTHCARE: DEAL SHARE BY COUNTRY

United States

United Kingdom

Israel

India

Canada

Other

2012 - 2016 YTD (as of 9/1/2016)

#AIHealth

A FEW RECENT DEALS OUTSIDE THE UNITED STATES

In Q1’16, Kinnevik and Google DeepMind backed UK-based Babylon Health in a $25M Series A round.

Bloomberg Beta backed Canada’s DeepGenomics in a seed round in Q4’15.

Khosla Ventures and Marc Benioff participated in a $12M Series B round raised by Israel-based Zebra Medical Vision.


ISRAELUNITED KINGDOM

CHINA

CANADA

SWEDENNETHERLANDS

INDIA

IRELAND

SPAIN

SOUTH KOREA

SINGAPORE

#AIHealth www.cbinsights.com 25source: https://www.cbinsights.com/blog/ai-healthcare-deals/

INVESTOR SELECT INVESTMENTS

Zebra Medical Vision, Atomwise, Bay Labs, Lumiata, Ginger.io

Zephyr Health, Flatiron, Predilytics

Notable Labs, CloudMedX, AnalyticsMD

Freenome, Atomwise, Enlitic

Predilytics, Welltok, Explorys

AI IN HEALTHCARE: MOST ACTIVE VCs2012-2016YTD (as of 9/1/2016)

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Corporate Participation: INVESTMENTS AND ACQUISITIONS


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IBM WATSON HEALTHThe tech giant has been gathering healthcare data for its Watson Cloud through the acquisition of private companies.


#AIHealth

IBM TAPS HEALTH DATA WITH PRIVATE ACQUISITIONS

In 2015, IBM acquired Ohio-based Explorys, —which gave it access to medical records and over 300 billion longitudinal data points1

— Texas-based population analytics startup Phytel, and made a public-to-private acquisition of Merge Healthcare. In early 2016, IBM acquired Michigan-based Truven Health Analytics.

www.cbinsights.com 281 https://www-03.ibm.com/press/us/en/pressrelease/46585.wss

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Anil JainVP, IBM Watson Health

www.cbinsights.com 29source: https://www.ibm.com/blogs/think/2016/03/02/a-data-revolution-coming-for-healthcare/

“You can see what’s going on here. IBM has collected an unparalleled body of diverse health-related data, including 300 million records spanning clinical, claims, and operational data.”

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GOOGLE DEEPMINDDeepMind entered into an agreement with UK’s National Health Service to access patient records to train its algorithms. It announced another collaboration with NHS’s Moorfields Eye Hospital.

www.cbinsights.com 30source: https://deepmind.com/blog/

#AIHealth

CORPORATE PARTICIPATION UP 3X SINCE 2013

There have been 13 corporate-backed deals so far in 2016.

Intel Capital backed Lumiata in $10M Series B round; GE Ventures backed Arterys in a $5M Series A round; Horizon Healthcare Services backed GNS Healthcare in an undisclosed Series C round.


$6$32 $244 $132 $443

1

5

11

16

13

2012 2013 2014 2015 2016 YTD

QUANTUM COMPUTING ANNUAL GLOBAL FINANCING HISTORY2012 - 2016 YTD (9/7/16)


$14(Full-Year Projection)

$645(Full-Year Projection)

19


COMPANY CORPORATE INVESTORS COMPANY CORPORATE INVESTORS

Hearst Ventures, IBM Watson Group, Qualcomm Ventures,

TriZetto CorporationTencent, Vcanbio

Horizon Healthcare Services, Celgene, Mitsui & Co. (U.S.A.),

Heritage Provider Network

Intel Capital, BlueCross BlueShield Venture Partners

Roche Venture Fund, LabCorp, Google Ventures

DeepMind Technologies, Innocent Drinks

Illumina, Execute Technologies REV, TELUS Ventures

BlueCross BlueShield Venture Partners, MassMutual

Ventures

AXA Strategic Ventures, Cantora Records

Qualcomm Ventures,Google Ventures

A FEW COMPANIES WITH CORPORATE BACKING2012-2016YTD (as of 9/7/2016)


INVESTOR SELECT INVESTMENTS

Zephyr Health, Flatiron, Predilytics

Welltok, Predilytics

iCarbonX, CloudMedX

Arterys, Medaware

AI IN HEALTHCARE: MOST ACTIVE CORPORATE INVESTORS2012-2016YTD (as of 9/7/2016)

Lumiata, Picwell

Welltok, Pathway Genomics

#AIHealth

Special Focus: FIGHTING CANCER WITH MACHINE LEARNING


#AIHealth

DRUG DISCOVERY

MONITORING


DIAGNOSTICS

#AIHealth

IBM WATSON-BACKED STARTUP RAISES $40M SERIES E ROUND

Pathway Genomics is a deep learning-based precision medicine startup focused on conditions including cancer and cardiac health.

It raised a $40M Series E round from the IBM Watson Group in Q1’16.

The company has a CB Insights mosaic score of 820/1000.


#AIHealth

NEW BLOOD TEST KIT FOR EARLY-STAGE CANCER DETECTION

The company is conducting a research study for its kit, CencerIntercept Detect.

The study analyzes gene mutations in high-risk individuals who have never been diagnosed with cancer.

www.cbinsights.com 37https://www.pathway.com/healthy1000/

#AIHealth

OTHER DIAGNOSTICS STARTUPS FOCUSING ON CANCER

Philadelphia startup Freenome received $5.55M in seed money in Q2’16 from VCs including Andreessen Horowitz, Data Collective, and Founders Fund.

Australia-based diagnostic imaging services company, Capitol Health, led a $10M Series B raised by Enlitic this year.


#AIHealth

MONITORING

DIAGNOSTICS


DRUG DISCOVERY

#AIHealth

ATOMWISE PARTNERS WITH NOTABLE LABS


Atomwise uses advanced machine learning algorithms for drug discovery and development.

Disclosed funding: $6.12M

Select Investors: Khosla Ventures, Data Collective, AEM Cloud Ventures, Draper Fisher Jurvetson, Y Combinator

Notable Labs provides FDA-approved treatment recommendations based on the type of tumor.


Select Investors: Funders Club, Upside Partnership, Y Combinator

#AIHealth

AI-BASED DRUG DISCOVERY PLATFORMS


InSilico Medicine applies deep learning algorithms to drug discovery, for applications including cancer immunotherapy.


Select Investors: Deep Knowledge Ventures

Globavir Biosciences uses a machine-learning platform to reduce drug discovery times.


Select Investors: Sorrento Therapeutics, Startx

#AIHealth

DRUG DISCOVERY

DIAGNOSTICS


MONITORING

#AIHealth

The Netherlands-based skin cancer app, SkinVision, uses computer vision to analyze skin lesions. It received a $3.5M corporate minority round in 2015 from dermatology company LEO Pharma.

USING MACHINE VISION TO SCREEN FOR SKIN CANCER

www.cbinsights.com 43source: https://www.cbinsights.com/blog/ai-startups-fighting-cancer/

#AIHealth

Road ahead: RECENT DEALS & TRENDS TO WATCH



COMPANY AMOUNT/ROUND ROUND INVESTORS

$45M/Series A- II China Bridge Capital

$8.5M/Series A Norwest Venture Partners, Point B Capital

$4.3M/Seed VCCota Capital, Rising Tide Fund, Liquid 2

Ventures, Storm Ventures

$0.12M/Seed - II Techstars

$0.1M/Seed Kstart

$3.3M/Seed - II

AI IN HEALTHCARE: RECENT DEALSQ3'16

Roman Abramovich

TCP Venture Capital, A- Level Capital, Robin Hood Ventures, Emerald Development Managers$1M/Seed VC

#AIHealth

COMPETING WITH CORE AI COMPANIESWhile healthcare-focused AI startups have seen significant investment over the past year and a half, they also face stiff competition from general-purpose AI companies that tailor their solutions to multiple industries and have made healthcare a focus.


$97.9M $75.6M $143.8M $30.6M $3.1M

#AIHealth

21 HOSPITALS ACROSS CHINA TO ADOPT WATSON FOR ONCOLOGY TO HELP PHYSICIANS PERSONALIZE CANCER CARE

August 11, 2016

IN THE NEWS


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CBINSIGHTS.COM@ cbinsights

[email protected]

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