Health tech is hopping
Plus, first-time VCs have closed precious few funds this year
The Week In Short
Hinge Health’s IPO was a big win for early investors Insight Partners, Atomico, 11.2 Capital, and Bessemer Venture Partners, but less so for late-stage ones. Now, other healthtechs are cautiously awaiting their public debuts. Emerging fund managers are in dire straits, per Bloomberg’s Kate Clark and Katie Roof. The team at Grammarly gets a billion dollar boost from Pranav Singhvi’s Customer Value Fund. Plus, our investor spotlights featuring Jim Breyer and Leigh Marie Braswell.
The Main Item
Health Tech Investors Cheer Long-Awaited IPOs as AI Spurs Fresh Enthusiasm
Digital health investors have had a tough go of it in recent years, but they’re now enjoying a few exits — and seeing fresh hope in AI.
Omada Health, a virtual chronic care startup backed by a16z and Norwest, updated its IPO prospectus Thursday to price at $18 to $20 a share ahead of its anticipated debut next week. A16z’s Vijay Pande sits on the board, and Norwest Venture Partners’ Casper de Clercq was also an early backer.
The offering comes on the heels of Hinge Health’s IPO last week, which provided some welcome liquidity even if it valued the firm at less than half the $6.2 billion it was worth in its last private round in 2022.
The remote physical therapy company’s shares saw a nice pop from the $32 offering price to over $39 a week later at Thursday’s close, and early investors Insight Partners, Atomico, 11.2 Capital, and Bessemer Venture Partners scored some nice gains — though the same can’t be said for growth investors Tiger Global and Coatue. Insight’s Teddie Wardi sits on the board, alongside Atomico partner Ben Blume and Bessemer’s Elliott Robinson.
Sword Health, who competes directly with Hinge Health, is seen as an IPO candidate for later in 2025 or 2026, though there isn’t a big pipeline of imminent IPOs in the sector.
Cerebral Valley
New Speakers Added to Cerebral Valley London
Some of the buzziest AI founders at companies like Lovable, Orby, and Granola are coming to the Cerebral Valley AI Summit in London on June 25.
Join us at this invite-only summit by applying at cerebralvalleysummit.com.
Investors Rush to Back AI Medical Assistants
But the market for healthcare AI assistant startups is staying frothy. We scooped OpenEvidence’s fresh $3 billion valuation on Wednesday, and Abridge is in talks to raise fresh funds at a $5 billion valuation.
According to the investors I chatted with this week, AI health tech startups first aimed to automate back-office work for hospitals and clinics, like insurance verification or billing, since that sort of work is not as heavily regulated.
Two fast-growing startups to watch that are automating compliance and benefits work are Brellium and Thatch, investors told me.
But some of the most interesting early stage companies are working with private medical practices and building LLMs that can actively assist in diagnosis and treatment, according to Scrub Capital investor and Second Opinion founder Chrissy Farr.
While many doctors and patients are already using ChatGPT to help them diagnose and treat different conditions, Farr said, startups are creating the infrastructure around LLMs to make it safer for patient care. That’s where firms like OpenEvidence and Akido Labs fit in, with models trained on healthcare-specific data from medical journals or real clinical interactions.
Private medical practices have been quicker to adopt these tools than larger hospital systems so far, but hospitals are taking generative AI tools very seriously, said Farr. “These conversations are going on at every moment of every day at the board level.”
Healthcare agent startup Hippocratic AI, which locked up a $141 million Series B in January from Kleiner Perkins, works like an “AI nurse” that can interact with patients for chronic-care management or follow-up counseling. It claims to have reached safety parity with human nurses for certain kinds of low level care.
AI has also helped doctors process patients on intake, and provide symptom screening. Limbic, a UK-based startup which gives mental health patients an AI chatbot to help screen early symptoms, counts the NHS as a customer and launched a voice AI tool earlier this month in the US.
Health tech AI investing picked back up to $13.8 billion worth of deals in 2024 after a multi-year lull, according to fresh data from PitchBook. It’s on track to surpass that in 2025 if current funding rates hold, although the number of deals has fallen so far this year as investors concentrate capital into late-stage winners.
Fund Shutdowns
First-Time VC Funds Becoming a Rare Species
It’s been a recurring theme in this newsletter that the “haves” of the venture capital world, namely the handful of megafunds and a few hot seed players, are having no trouble raising capital, while mid-tier firms and emerging managers are struggling.
PitchBook data shows just how tough it’s become for newer venture investors. Only 44 VC funds were launched by first-time fund managers in Q1 of 2025 — quite a stark comparison with the 2022 peak, when there were 994 first-time funds.
Per Bloomberg’s Kate Clark and Katie Roof, family offices and wealthy individuals have been pulling back from venture since the downturn began, and the Trump administration’s attacks on universities and their endowments come as fresh blows.
Dive into our conversation about emerging funds with Kate Clark on this week’s Newcomer Podcast:
VC Spotlight
An OG and a Rising Star Score Big Wins
It’s been 20 years since Jim Breyer’s career-making early investment in Facebook, and the veteran VC’s chunky stake in the stablecoin company Circle shows that whatever cliches might be out there about how young founders are the best founders, it doesn’t particularly apply to venture investors. Circle filed to go public this week at a valuation of around $6 billion, and Breyer, 63, is among the biggest winners: His Breyer Capital, among the first investors in Circle more than a decade ago, has 9% of the Class A shares, worth about $400 million at the low end of the $24-$26 offering range. Breyer also has an interest in the 6.9% of Circle’s Class A shares that are owned by Accel, his former firm, and the 12.6% controlled by IDG Capital, which Breyer brought into the deal. (General Catalyst, also an early investor, is the other big winner with almost 13% of the Class A stock.)
On the other end of the age and experience spectrum, another recent standout, Kleiner Perkins’ Leigh Marie Braswell, is “emblematic of a new breed of venture investors — one who bridges deep technical expertise with investment acuity,” as Forbes put it in naming her to its “Midas List” of up-and-comers this week. Braswell scored with Neon, recently sold to Databricks for $1 billion, where she led the Series A while at Founders Fund. She also spearheaded Kleiner’s Series B investment in Windsurf, which OpenAI is reportedly acquiring for $3 billion.