Breyer Capital’s Healthcare AI Investment Thesis: Learnings and Predictions (December 2021 Update and Big Announcement)
Update: The last several years have been exciting for Breyer Capital as we’ve devoted significant time and resources to identify and invest in the world’s most promising healthcare AI opportunities and founders. As 2021 comes to a close, I couldn’t be more excited by our portfolio. I also know the best is yet to come.
I’ve mentioned in past emails that I could never do this work alone. Healthcare AI is complex and changing quickly and I owe a debt of gratitude to the women and men who have helped us make sense of this space. One such individual, Leo Grady, has been incredibly generous with his time and mind. Today I am thrilled to announce that Leo will be joining Breyer Capital as a CEO in Residence.
Leo was a world-class CEO and leader at Paige. Listing all of his and the company’s accomplishments would take too much time, but I will shine a light on one in particular: Paige receiving the first-ever FDA approval for an AI product in digital pathology. Tim Stenzel, a director in the FDA’s Center for Devices and Radiological Health sums up the achievement well, “Pathologists examine biopsies of tissue suspected for diseases, such as prostate cancer, every day. Identifying areas of concern on the biopsy image can help pathologists make a diagnosis that informs the appropriate treatment. The authorization of this AI-based software can help increase the number of identified prostate biopsy samples with cancerous tissue, which can ultimately save lives.”
Leo has 18 years of experience leading development and commercialization of advanced machine learning, AI, computer vision, diagnostic, and digital health technologies that have made a significant impact on healthcare practice. During his tenure as CEO of Paige, where Breyer Capital is a founding investor, Leo led the company to become an industry leader, internationally launched several groundbreaking software products, and became the first-ever company to receive FDA approval for an AI product in pathology.
Prior to joining Paige, Leo was the SVP of Engineering for HeartFlow, where he led full-stack technology and product development efforts for HeartFlow’s cardiovascular diagnostic and treatment planning software while also driving HeartFlow’s IP portfolio. Before HeartFlow, Leo served in various technology and leadership roles at Siemens healthcare. Leo is internationally recognized as a technology leader in AI for healthcare, authoring two books, over 100 peer-reviewed scientific papers, and having over 300 patents worldwide. Winner of the 2012 Edison Patent Award, he was inducted as a Fellow in the American Institute for Medical and Biological Engineering. Leo received a B.Sc. degree in Electrical Engineering from the University of Vermont and a Ph.D. in Cognitive and Neural Systems from Boston University.
I am certain that Leo will be an asset to our founders and management teams, and I feel honored that he chose Breyer Capital for this next chapter of his career.
Leo joining the team couldn’t have come at a better time. Since my last Healthcare AI update, our portfolio has grown and we continue to initiate and see remarkable opportunities. In the summer I announced our investments in Ansible Health, Iterative Scopes, OM1, Verana Health, and ClosedLoop AI. Today I am thrilled to announce investments in MyOme, Enable Medicine, SiteRX, and Tympa Health. More about these companies can be found in the appendix where the rest of our Healthcare AI portfolio is listed.
In the months to come, I will share another exciting update about how I and Breyer Capital are thinking about quantum technologies, sensing, and communications. I will highlight a new investment in the space that could, in conjunction with Healthcare AI improvements, make a profound positive impact.
In the meantime though, I hope everyone can find the time and space to enjoy this holiday season. While the last few years have been difficult for many, I remain inspired by our healthcare founders, management teams, and co-investors committed to saving patient lives and transforming the field.
Since 2016, I’ve been fascinated, excited, and inspired by advances in artificial intelligence, especially when applied to healthcare. I recently wrote a post detailing how I think about AI investing. There, I had an opportunity to share that I’ve never been more confident that artificial intelligence will help companies, institutions, and individuals accomplish extraordinary things for the betterment of humanity. In a world where AI can be a controversial topic, I often get asked why I’m optimistic. The truth is, I’ve always been an optimist. I said as much to my friends at Forbes in 2018 and feel the same way today that I felt then.
“I tend to be much more of an optimist when I think about history. In the 1960s, with all of the advances in biology, so much of it was being applied to better healthcare and to medical breakthroughs, not to biological weapons. I feel the same way today about AI and the benefits of human-assisted [artificial] intelligence in areas such as cancer and healthcare, and in improving healthcare outcomes, patients’ experiences and their ability to understand their medical records, and in doing research around medicine, which is assisted by technology. These are profoundly positive applications of AI, and I tend to be very optimistic.”
At a time when healthcare innovation has never been more important and during a week when some of the best minds are meeting, as they have for the last thirty-nine years, to discuss healthcare investing at the J.P. Morgan Healthcare Conference, I thought this would be an ideal opportunity to share more about how I’m thinking about Healthcare AI investing.
Before speaking about specific current portfolio companies of Breyer Capital, I’ll share some broader thoughts about the vertical.
While AI algorithms are still in their early stages, we can expect to see many more research breakthroughs in the coming months and years. Especially as data sets become larger and more accessible and computational power becomes more affordable, AI applications will become more powerful and ubiquitous.
It seems clear to me that AI applied to human-assisted diagnosis and analysis will create hundreds of billions of dollars of market cap by venture-backed startups. More importantly, if ethically and effectively harnessed, AI breakthroughs will improve patient lives and, perhaps counterintuitively, the patient experience. Many people imagine that AI will make medicine less human. We believe that the opposite is true. We think that a world enriched by better technology will allow doctors to spend more time caring for patients and providing personalized care.
In the short and long-term, AI will have dramatic positive effects when it comes to helping companies and institutions with workflow optimization (revenue cycle management), imaging (diagnosis and workflow efficiency), clinical trial recruitment and retention, and drug discovery. Breyer Capital has backed companies pursuing each of these opportunities and we continue to work with our university research partners to identify new approaches and tackle larger problems.
Universities and our current and future university partnerships are among Breyer Capital’s most valuable resources when it comes to Healthcare AI investing. Top universities around the world remain the best places to foster and identify AI talent. Every year I like to spend very significant time on university campuses across the country and world. In 2020, I spent extremely valuable time with deans, professors, post-docs, graduate students, and undergrads, and while I traveled far less, I found Zoom to be an effective way to connect with esteemed academic researchers. While we work closely with many universities, Harvard, Stanford, UT Austin / Dell Medical School, MIT, UCSF, Tsinghua, and Peking University are some of Breyer Capital’s closest partners. I’m also a Founding Member of the Stanford Institute for Human-Centered Artificial Intelligence and think as highly of John Etchemendy and Fei-Fei Li as anyone in the space. In 2021 when it becomes safe to do so, I look forward to visiting more schools and getting a better sense of the budding AI talent located around the world.
Breyer Capital is fortunate to be working closely with superb investors and technology/healthcare leaders such as Marc Benioff, Sam Palmisano, Nitin Nohria, Gerald Chan, Doug Leone, Marty Chavez, Helena Foulkes, Steve Kraus, and Morgan Cheatham among others. We also spend time with leaders at some of the most forward-thinking tech companies, brainstorming and thinking through long term opportunities in AI. We marvel at the intellectual horsepower of individuals such as Jeff Bezos, Sheryl Sandberg, Mark Zuckerberg, Tim Cook, Satya Nadella, Doug McMillon, Larry Page, and Sergey Brin. We’ve also been so encouraged by brainstorming sessions with the Austin entrepreneurship and investing community and are grateful to be sharing notes with Michael Dell, Brett Hurt, Adam Zeplain, Josh Baer, Krishna Srinivasan, Ross Perot Jr, Tom Luce, and Joe Aragona.
Thanks to wonderful partners, we’ve been able to invest in some groundbreaking healthcare AI companies. I won’t name all of them here and there are many that are remaining stealth for the time being, but I’ll highlight a few below to demonstrate some examples of how healthcare AI will be world-changing.
We believe that the intersection of healthcare and AI, as we have said broadly about AI over the last 5 years, will be the financial and impact opportunity of this decade, rivaling previous technology breakthroughs such as social networks and the internet.