Apricot Technologies’ Early Traction Yields Sweet Start
Most things startup founders try don’t work, from the firehose of daily ideas to the company itself. Venture-backed startups fail 75% of the time. Even for successful startups, the typical startup life is marked by long slogs of trial and error on the path to product-market fit.
VCs dream of a pre-seed fund-returner manifesting in 3–4 years, with rare exceptions sooner. Cortado Ventures is proud to be the first institutional investor in one such exception — Apricot Technologies (“Apricot”.) In their first year, they have contracted 20,000 patient lives and are on target to reach profitability and exceed 100,000 patient lives by Q4 2024. Driven by championship-pedigreed founder Trent Smith, Apricot’s extraordinary solution is pioneering the most exciting development in home health in decades for both care quality and operational efficiency.
Apricot
Apricot provides home health businesses the fastest AI solution to complete accurate, compliant OASIS Start of Care documentation. By leveraging Generative AI Large Language Models (“LLMs”) to significantly decrease time spent charting, Apricot empowers nurses to provide:
- higher-quality care
- to more patients
- with more personal connection
Trent Smith
Trent has won at every major endeavor he has attempted. He was a Junior Olympic Taekwondo Champion, an All-American national champion football player in college, and a tight-end for numerous NFL franchises. Trent’s competitive drive to win has proven to be equally sharp in every business endeavor he has pursued, including medical staffing, correctional facility medical services, and 8 years of experience owning and operating a home health business.
Apricot Epiphany
When Trent saw concurrent rapid developments in machine vision and generative AI, he recognized an opportunity to solve a critical nursing documentation bottleneck in his home health company’s workflow. Every home health provider Trent knew had the same problem and felt powerless to free their nurses from overbearing documentation requirements that are exacerbated by non-uniform referral inputs. Trent raced to test his theory, quickly assembling a scrappy prototype combining top machine vision and machine intelligence products and comparing results with historical company data for both medical accuracy and speed.
The results exceeded his wildest expectations. He witnessed the prototype yield “superior medical accuracy and narrative depth in mere seconds” on a task that takes nurses 30 minutes. With the technical viability proven, the last step was to put the product in the hands of nurses. Trent knew he was onto something when one of the first nurses to use the product “called me crying, telling me how I have changed her life and made her love being a home health nurse again with an emphatic mandate to share this with every home health nurse everywhere.”
Unit Economics Tipping Point
The messiest part about the home health business is that, prior to Apricot, everybody had to take losses on Medicare Advantage referrals to “earn” profitable Medicare referrals. Apricot provides a tipping point of efficiency gain that lessens the documentation burden of nurses so much that Medicare Advantage patients become profitable outright. By gladly accepting all of a facility’s Medicare Advantage referrals, Apricot’s home health customers have an enormous competitive advantage in winning their Medicare business. Home health companies won’t be able to compete without Apricot.
Unparalleled Home Health Nurse Retention
An unfortunate legacy of the home health industry is high nurse turnover of 30–40% per year, with the majority leaving the field of home health nursing altogether. In such a regulated and competitive industry, margins are too slim to pay home health nurses what they are worth. Apricot unlocks the margin gridlock by allowing nurses to see more patients, freeing home health companies to increase nurse pay. Apricot also improves nurse job satisfaction by reducing tedious paperwork and increasing human connection time with patients. Trent indicated that one customer reported “0% turnover in 6 months since deploying Apricot.”
Why Cortado Ventures Invested
Cortado’s Managing Partner Nathaniel Harding has become friends with Trent through 10 years of YPO engagements. Nathaniel came to know Trent to be an “outstanding CEO and seasoned operator through many cycles.” Trent’s idea to build Apricot immediately intrigued Nathaniel and perfectly fit Cortado’s B2B SaaS Healthtech Thesis. Nathaniel developed conviction in the asymmetric upside of the deal, explaining that “because of Trent’s profound understanding of the problem, the customer, and his industry network, we believed we would get quick and specific market feedback. The success case was massive, and the likelihood of languishing in product-market-fit purgatory was low.”
Cortado’s Top 5 deal attributes for Apricot
- Founder is a home health domain expert.
- He is solving a critical business problem he suffers.
- He is tapping a massive industry network for distribution.
- He can establish a first-mover moat as the home health AI pioneer.
- He can dominate a narrow market before wedging into larger adjacent markets.
Apricot’s Growth Plans
Having greater market demand than you can service is a good problem to have, especially when you haven’t spent a single dollar on sales and marketing. However flattering, the firehouse of inbound sales has created a major personnel problem. Trent says they are “aggressively hiring across engineering, design, and operations to service the dozens of customers on the waitlist, including multiple publicly-traded home health enterprise customers.” Nathaniel remarked that “Cortado has retained a recruiter to accelerate Apricot’s hiring process in this crucial growth phase as they continue to crush milestones quarters ahead of time.”
Leveraging his deep operator experience, Trent knows how to walk the expectation tightrope carefully to keep waitlist customers apprised and engaged as Apricot cranks operations into overdrive to meet demand. The tsunami of waitlist sign ups is only speeding up, as he projects Apricot to service “as much as 30% of all U.S. home health patients by Q2 2025.” Despite the glamorous early numbers, Trent reminds his team daily that future growth is contingent upon fidelity to the mission to build Apricot as a “thank you note to all home health nurses, the true unsung heroes of the U.S. health system.”
Cody Merrill is an experienced health-tech startup executive and workforce-tech founder currently serving as an Entrepreneur-in-Residence at Cortado Ventures while launching his next endeavor. Cody also serves as host of the Midcon Markup podcast and the creative vision behind the annual Midcon VC Summit.
Cortado Ventures invests in Pre-seed through Series A startups with a focus on transportation/logistics, life sciences, and energy transition. If you run a Midcontinent startup or are looking to invest in these startups, contact us to learn more.
