Infermedica raise $30m to accelerate growth of AI diagnostics in healthcare
It is a great day for Infermedica as the company announced that it raised $30m to accelerate growth. Infermedica is on a track to become a unicorn.
Eight years ago, as investing partners at Innovation Nest, Marek and I decided to invest in Infermedica. As a result, we became the first private institutional investor and a shareholder owning 10% of the company.
The current multiple on the first money that we invested is 330x. The average of all funds invested in the first and consecutive rounds is 51x. So Infermedica is already a dragon, a fund returner, for Innovation Nest Fund 1, but we hope it will grow much further.
A lot has changed at Infermedica and Innovation Nest in the last eight years but, on this particular occasion, I’d like to recall the story of how we got started on this incredible adventure.
Why IN invested in Infermedica at the pre-seed stage
First and foremost, we adore pre-seed. In some ways, it’s a simple time — a solution is needed and looks possible. Then the adventurous, long and winding journey towards a company with product-market-fit begins!
To be more specific. The company founder captivated and drew us in with his passion, openness, and hard work, as well as his down-to-earth approach, lack of BS, and meticulous attention to detail.
A long-term goal balanced this attitude. And here comes the second point. The high-level pitch was convincing. It was very simple: healthcare diagnostics is going to be changed by AI. Translated in my mind to everyday English, our understanding of the founder’s pitch was: “I have no idea what my product will be, but the market is massive, and I plan to construct an AI healthcare diagnostics engine that will allow Infermedica to compete in that market.” Piotr was a founder with a dream.
The third element validated the two points above. Piotr had the first version of his product. Both the AI engine and the customer implementation.
Making decisions at the pre-seed stage is always tricky. Of course, companies have strengths, and they are important, but the risks taken together are a major factor to consider in investment decision-making.
We saw, considered and accepted several risks:
Piotr and the team’s experience was limited. He was a first-time founder facing a very tough market. The competition was out there, with IBM Watson on the top of the list.
Healthcare has a challenging regulatory environment, and we had no idea about these regulations.
There was no clear idea what the product would be and who would be the paying customer.
In hindsight, the decision to invest was a very good one. Infermedica grows. The learning we take forward, or rather, the factors we confirmed once again, are that founders and the market are the key ingredients for startup success.
After the investment
It soon became clear that we were correct about the founder. Piotr was crushing all the obstacles on the Infermedica track like an icebreaker. He’s been moving steadily and systematically forward as a result of his attitude and long-term goal, despite the fact that the first years were full of hypotheses to be tested and the road ahead often looked uncertain.”
Innovation Nest’s contribution
The past, present, and future successes of Infermedica are trophies to be claimed by the team and Piotr, the founder. They are (and will be) their outcomes. However, we did have an impact.
Piotr and I recently discussed this. I’d now like to highlight two contributions made by Innovation Nest in the two years following our initial investment in the pre-seed stage of the company.
The first was a strong push toward a global viewpoint. We introduced Piotr to dozens of people in San Francisco and Silicon Valley. In his words:
“You, Innovation Nest, helped me develop a mindset of big vision and implementation. You threw me a lot of challenges, which pushed me to be more ambitious. These business and life conversations were extremely beneficial.”
“Showing me Silicon Valley was a game changer.”
The long-term goal of using AI to build the future of healthcare has become much more tangible. And Piotr got a taste of what Silicon Valley has to offer: generations of experience building great companies that impact the world.
The second concern was with the product. We assisted Piotr with the customer discovery process making, among others, workshops on customer discovery.
The final contribution was a result of the first. We assisted in the development of the growth roadmap and the fundraising roadmap, which are inextricably linked. Although Infermedica revised the plans several times, the fundamentals were established during the pre-seed stage.
As a shareholder of Infermedica, we are bullish about the future. Healthcare needs AI. The process of providing consistent, efficient, competent, and immediate patient care will not be purely human-based. Many stages may and should be assisted and improved by software. Furthermore, there is a need for an independent solution, and natural entry barriers as AI for healthcare is a data play. Combining all this with the dedication and ability of the leader and the team makes us optimistic.
The VC world is a two-sided coin. One is analytical, rational, financial. It’s the investment angle. It’s the “capital” side. The other is the “venture” side of the coin. VC is about a quest. A quest for building companies that change the world. When an idea is created, an organization with hundreds of people has an impact. It is the core of pre-seed and what I believe is the core of venture capital.
Today let us celebrate the latter. Infermedica moved from 0 to 1 and now they start the journey from 1 to 100.
About Innovation Nest:
Innovation Nest invests in top European teams building B2B Software businesses that are getting close to their first sale (pre-seed) and in companies that are already selling, but monthly sales are below EUR 100,000 (seed).
We are a human-centric organization. We realize talented individuals can be found anywhere, and exceptional teams can accomplish extraordinary results.