Breyer Capital’s Healthcare AI Investment Thesis: Learnings and Predictions (Fall 2022 Update)

Jim Breyer
8 min readDec 1, 2021

In 2022, despite changing macroeconomic conditions, the Breyer Capital team continued to identify and invest in some of the world’s most promising opportunities at the intersection of artificial intelligence, healthcare, and life sciences. As healthcare eclipses 20% of GDP, the industry has become a key area of focus for some of the leading companies in the world.

After brainstorming sessions with leaders at Microsoft, Alphabet, Meta, Amazon, and Apple about their healthcare ambitions, I remain extraordinarily optimistic that the application of computation in healthcare and life sciences will be the financial and impact opportunity of this decade. Amazon’s $3.2 billion acquisition of One Medical and CVS Health’s $8 billion acquisition of Signify Health are especially exciting data points in healthcare services that point towards consolidation, investment, and growth in the space.

Since my last healthcare and life sciences update, we have welcomed new companies to the Breyer Capital family and have more than doubled down on several breakout portfolio companies including Iterative Scopes, a leading computational gastroenterology company, and Atropos Health, an AI-powered real-world evidence platform transforming clinical decision-making at the point of care.

We’ve continued to explore how artificial intelligence can transform diagnostic workflows, drug discovery and development, and clinical trials. At the same time, we’ve planted new seeds in leading-edge areas such as quantum technologies and decentralized science at the earliest stages.

Select additions to the Breyer Capital Portfolio:

Atropos Health: We led the $14 million Series A round for Atropos Health, an AI-enabled real-world evidence platform that brings publication-grade observational research to the fingertips of physicians across the country. Using millions of anonymized patient records, the company helps clinicians answer clinical questions that have fallen through the cracks of the evidence-based literature. The company spun out of the School of Medicine at Stanford University and has generated novel evidence across 18 clinical specialties thus far.

SandboxAQ: We were founding investors in SandboxAQ, a Google Moonshot spinout focused on combining quantum computing and artificial intelligence techniques to answer previously intractable questions in life sciences, data security, and clean energy. We are particularly excited about the company’s utilization of quantum approaches to modeling molecular dynamics and simulating the structure and behavior of drugs and targets, for example.

Molecule: Building upon our extensive track record in cryptocurrency and blockchain technologies and the broader Open Science movement, we made our first investment in decentralized science backing Molecule, a decentralized autonomous organization building IP-NFTs that transform research into a liquid asset class, unlocking frictionless self-funding, fueling development, and inspiring collaboration.

Over the next year, we will continue to invest in companies leveraging computation to derive insights from combinatorial assets spanning proteomics, metabolomics, genomics, clinical, and claims data. We believe that the near-ubiquity of electronic health record adoption, regulatory efforts driving data interoperability, and rapidly declining costs of genetic sequencing pose a rare opportunity to advance the field of medicine. As generative artificial intelligence approaches mature (see GPT-3, DALL-E, and AlphaFold), we are monitoring teams, labs, and companies leveraging synthetic data — from regulatory DNA to digital twins.

Given the highly interdisciplinary expertise required to unlock AI’s potential in medicine, we are excited to partner with multi-lingual teams at the earliest stages that bring expertise across clinical medicine, computational biology, artificial intelligence, machine learning, and high-quality patient care.

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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 Michael Dell, 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 Tim Cook, Satya Nadella, Jeff Bezos, Sheryl Sandberg, Mark Zuckerberg, Doug McMillon, Sunar Pichai, Larry Page, Sergey Brin, and so many others. We’ve also been so encouraged by brainstorming sessions with the Austin entrepreneurship and investing community.

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.

FEATURED HEALTHCARE AI INVESTMENTS:

23andMe: I believe 23andMe’s next chapter will be even more exciting than its trailblazing start. 23andMe has crowdsourced billions of data points, which (stripped of personally identifiable information) I believe will lead to new scientific discoveries and novel treatments for disease. Collaborations with pharma companies, universities, and hospitals will allow 23andMe to forge a future where healthcare is more personalized and medicine is more effective.
Ansible Health: Ansible Health provides home-based healthcare services to patients suffering from chronic obstructive pulmonary disease (COPD) in the United States. Ansible Health does this by leveraging technology as well as their own clinical teams of respiratory therapists, and MDs, to remotely monitor, educate, coach, and provide rehab to these patients. They work alongside their current clinical providers to ensure that these patients live long, healthy, and fulfilling lives.
Atropos Health: Atropos Health’s first solution is a digital consultation service that helps physicians and other providers answer previously unanswerable clinical questions using real-world clinical and administrative data.
Biocogniv: Hospitals and laboratories face an unprecedented human resources challenge, marked by understaffed departments and overworked providers. Biocogniv enables these critical healthcare facilities to leverage their existing electronic infrastructure and laboratory data to enhance the work of their providers with real-time, intelligent insights ranging from lab test interpretations to AI-powered diagnostic predictions.
C3.ai: Breyer Capital is so proud to have been an early investor in my friend Tom Siebel and C3.ai, which recently listed on the NYSE. In healthcare, C3.ai helps payors, providers, and suppliers analyze massive amounts of clinical, claims, pharma trial, EMR, and sensor data to clarify and optimize decisions about how best to care for patients and reduce the overall cost of care.
Cleerly: Clearly is a digital healthcare company transforming the way clinicians approach the treatment of heart disease. Our clinically-proven, AI-based digital care platform works with coronary computed tomography angiography (CCTA) imaging to help clinicians precisely identify and define atherosclerosis earlier, so they can provide personalized, life-saving treatment plans for all patients throughout their care continuum.
ClosedLoop.ai: ClosedLoop.ai is healthcare’s data science platform. The company makes it easy for healthcare organizations to use AI to improve outcomes and reduce costs. Purpose-built and dedicated to healthcare, ClosedLoop combines an intuitive end-to-end machine learning platform with a comprehensive library of healthcare-specific features and model templates. Customers use ClosedLoop’s Explainable AI to drive clinical excellence, operational efficiency, value-based contracts, and enhanced revenue.
Curebase: Curebase’s decentralized clinical trial (DCT) model enables patients to participate in studies regardless of their location, while also expanding access to populations that are typically underrepresented in clinical trials. The company’s virtual research sites also provide physicians with new and unique options to offer their patients interested in taking part in trials.
Earli: Earli is a biotechnology company born out of Stanford University focused on making cancer detectable, localizable and therefore treatable at an early stage. By forcing cancer cells to produce synthetic biomarkers that do not belong in the human body, these cells become visible in a PET scanner, so they can be treated at early stages. Earli uses biology rather than chemistry to force production of the Synthetic Biopsy, allowing for massive signal amplification and targeted treatment.
Elemental Cognition: Founder/CEO of Elemental Cognition, Dr. David Ferrucci, built and led the IBM Watson team from its inception through its landmark Jeopardy success in 2011. Today, Elemental Cognition is driving the future of AI by changing the way machines learn. In the next ten years, I believe that the healthcare implications of their technology will be significant as an AI that can learn, understand, and explain what it reads could add momentous value to doctors and patients.
Enable Medicine: Enable Medicine is an end-to-end spatial biology platform. The company provides custom panel development for a wide variety of targets and biomarkers and data acquisition utilizing the CODEX imaging platform. Their fully cloud-based bioinformatics pipeline takes in these ultra high-plex images and most other immunofluorescent image types to conduct spatial data analysis with proprietary software tools.
Everly Health: Everly Health is a healthcare company that aims to provide modern diagnostics-driven care. Their infrastructure guides the full testing experience with the support of a national clinician network that’s composed of hundreds of physicians, nurses, genetic counselors, PharmDs, and member care specialists.
Glass Health: We led the pre-seed round of Glass Health, the first digital notebook designed for doctors. Glass Notebook is a medical knowledge management platform tailored to the way physicians learn, think, and practice. To accomplish this goal, the team has built page types and templates that support the common knowledge constructs that physicians use in clinical reasoning. In the future, the product will support the quick capture of ECG tracing, snapshots of radiology imaging, and physical exam findings.
Iterative Scopes is a software-only gastrointestinal data company, working to deliver AI toolkits to the practice of gastroenterology, to provide real-time actionable insights to providers
Lyra Health: I met Lyra’s co-founder and CEO, David Ebersman, when we recruited him to be Facebook’s Chief Financial Officer. When he left to start Lyra Health, I was eager to partner for a second time. Today more than 40 leading companies have partnered to offer Lyra’s mental health benefits to their employees, including Facebook, Pinterest and Starbucks, giving more than a million people access to life-changing care.
Molecule: Molecule is a decentralized biotech protocol, building a web3 marketplace for research-related IP. Our platform and scalable framework for biotech DAOs connects academics and biotech companies with quick and easy funding, while enabling patient, researcher, and investor communities to directly govern and own research-related IP.
MyOme: MyOme is a personal genetics company that helps families understand their medical backgrounds through DNA testing. Licensed physicians are able to order tests, and genetic counselors are then provided to customers for full understandings of genetic histories
NeuraLight: NeuraLight, which has dual headquarters in Austin and Tel Aviv, aims to help people suffering from neurological disorders by digitizing neurological evaluation and care. The team has built a platform that automatically extracts microscopic eye movement measurements that serve as reliable digital endpoints for neurological disorders. The platform is able to remove light and movement from videos using AI and machine learning to get a more precise video.
OM1: OM1 has built an intelligent data cloud to enable different healthcare stakeholders to cost-effectively access, analyze, and use outcomes data in a more robust, clinically meaningful, and precise way.
Paige: Breyer Capital is a founding investor in Paige. Paige has already reached impressive milestones like being the first AI company in pathology to get an FDA breakthrough designation and a CE Mark. Paige sits at the forefront of scientific innovation for AI-based diagnostics in clinical and biopharma applications.
PostEra: PostEra is building a modern 21st-century biopharma. The team is leveraging advances in machine learning to close the Design-Make-Test cycle of medicinal chemistry and bring more cures to patients.
Related Sciences: At Facebook, Jeff Hammerbacher was an instrumental member of the early team, leading the company’s efforts in data collection, management, and analysis. It was an easy decision to invest in Cloudera, and an even easier decision to invest in his latest endeavor. The Related team is committed to discovering new medicines for diseases with unmet needs. They are building a data-driven platform for translating science into valuable drug candidates.
SandboxAQ: SandboxAQ is an enterprise SaaS company combining AI + Quantum tech to solve hard problems impacting society. Their solutions include post-RSA cybersecurity modules that migrate enterprises (including healthcare companies) to higher levels of security. These SandboxAQ modules enable post-quantum cryptography (PQC) in line with the new standards that are now emerging in this field.
SiteRx: SiteRx is on a mission to bridge clinical trials with clinical practice, making access to appropriate clinical trials available to any patient that qualifies and wishes to participate. By accomplishing this, we give treating physicians an opportunity to provide additional care options for their patients while generating significant new income for their practices. We also improve things dramatically for sponsors and sites who consistently struggle to recruit the right patients, wasting precious time and money, and delaying the approval of potentially life-saving treatments.
Slope: Clinical trials depend on proper tracking and management of drugs, devices, kits, samples, and equipment. Mismanagement of the above impact 94% of clinical trials. Slope solves the complexity, operational inefficiency, and data integrity issues that plague clinical trials. Their data-driven approach to clinical supply chain management helps clinical trials stay on track. The three tenets of the business are order, trust, and predictability, each of which is enabled by AI-based infrastructure.
Soley Therapeutics: We partnered with a top medical center to develop safe and effective new drugs for the treatment of a broad spectrum of diseases. Using disruptive and proprietary technology, including some novel AI and Deep Learning applications, this opportunity could transform drug development
Subtle Medical: Breyer Capital is a proud seed investor in Subtle Medical, a company that has the first FDA-cleared AI software solutions for medical imaging enhancement. Subtle’s current clinical partners include UCSF, Hoag Hospital, Mt. Sinai, and others. The company aspires to make medical imaging better, safer and more comfortable for patients while creating new workflow efficiencies for hospitals and imaging centers.
Suki: Suki is an AI-powered, voice-enabled digital assistant for doctors. Suki’s mission is to lift the administrative burden from doctors, so they can focus on what matters. Suki was founded by Punit Soni, a Google and Flipkart executive. In 2019 Google named Suki their AI partner of the year and in 2020 they were selected by Fast Company as one of the 100 most innovative companies.
Tympa Health: TympaHealth has developed the world’s first ear and hearing health assessment system. The Tympa system empowers non-specialists to perform high-definition digital otoscopy, micro-suction wax removal, and a hearing screening, all in a single 30-minute appointment. Users can also upload patient images and video to the secure cloud, where they can be reviewed by ENT specialists anywhere in the world.
Verana Health assembles clinical databases in medicine to empower physicians and accelerate research for patients.
Wesper: Millions of people suffer from bad sleep, but due to the lack of easy sleep testing, many never get feedback and support on sleep wellness. Wesper in on a mission to make better sleep more accessible for everyone.
You.com: We just announced our Marc Benioff co-investment in Richard Socher’s You.com. Richard and team are building the first “trusted search engine.” The Internet is full of amazing and useful information but also junk, fake reviews, biases and unhelpful ads. When individuals are looking for health information and resources, bad actors are especially pernicious. You.com aspires to make accurate medical information more transparent and accessible on the internet.

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Jim Breyer

@BreyerCapital Venture Capital/Venture Philanthropy. Headquartered in Austin, Texas since 2020, with an office in Silicon Valley.