The$ 4.5 trillion healthcare industry will undoubtedly benefit from the development of conceptual AI and various automation systems.
However, it won’t be simple for early-stage startups to enter a highly regulated and generally slow market.
” Everything in healthcare moves at glacial pace”, said , a longtime managing partner at , which recently $ 2.3 billion for its 11th fund.
Naini, who has been at the Seattle-based private equity firm for more than three decades, said he’s seen tech investors become frustrated when they make a move into care.
” You’ve got a structure that’s already in place and you’re sort of turning a ship in a lake”, he told GeekWire in a recent interview.
Some healthcare agencies aren’t in a strong financial position and don’t have the flexibility to invest in and follow new technology, according to Naini, which could hinder digital health startups.
” When you’re funding your corporations with venture capital … you can’t bear those long sales processes and long shifts within an business”, he said.
Venture investors poured more than$ 10 billion into digital health companies last year, with AI-focused startups taking 37 % of total funding, according to Rock Health.
There are a number of Seattle-area tech startups making moves in care, including CalmWave, a “quiet ICU” company that recently $ 5.2 million, and Abbett, which $ 11.6 million to address healthcare costs.
Healthcare-related M&, A exercise has also been heating up in the region over the past month, for both larger companies such as and , as well as businesses including and .
Additionally, Providence Ventures spun out a fresh venture capital firm called Allumia Ventures next month, which is raising a huge new account.
Frazier Healthcare concentrates on more well-established companies that are ripe for automation using cutting-edge technologies like AI.
” AI is a revolutionary facilitator for the medical market”, Naini said. ” However, I wouldn’t go as far as saying it’s going to change the entire industry. There will be very particular places where it might be helpful.
Naini predicted that bigger tech companies like Microsoft and Amazon will gain popularity in some medical verticals. However, those businesses will also require reluctance and possibly a commitment to fail.
” When you’re reporting quarterly numbers, you better be very large so you can capture a slower-than-expected transformation”, Naini said.
Frazier is especially serious in sectors including medical services, rural care, and women’s health.
The business has about 90 employees and has an operations team that supports collection companies from different fields. It plans to open a new office in New York City after this season.
Naini expressed optimism about the economic environment this year, in part because of the volume of “dry powder” that businesses must use.
” I think you’re going to see a lot more action in 2025″, he said.
Frazier split down into two separate money in 2013, creating the growth-focused medical finger that’s based in Seattle, along with , which operates venture funds and public funds with a focus on biotech and therapeutics. , based in Silicon Valley, $ 630 million for its latest account in October.