The 11 health tech startups top VCs think will dominate over the next decade

Tech startups aim high and promise big. But which are poised to deliver big breakthroughs (to patients as well as investors)? That’s the question I posed recently to some of the top VCs Fortune featured in our recent roundup of health tech power players. I canvassed investors, asking which startups they were most excited about outside their own portfolios, and I also gave them a chance to talk up a company they had invested in. From groundbreaking treatments to address chronic illness, technology to help surgeons work more effectively, and payment plans to help people afford the health care they need, here are the technology-focused companies they see defining the next chapter of health care. 

Overall, for early-stage health care companies, it’s crucial that the startups engage users and create tangible value. Bob Kocher, partner at Venrock, said that he looks for startups that have a huge return on investment for its users off the bat, even if the company is not yet profitable. Return on investment for users is important because a successful startup needs to build its user base at a lower cost than the revenue from each user. Ambar Bhattacharyya, managing director at Maverick Ventures, explained that a company’s demonstrated engagement is an important indicator of its financial success down the line. One measure of consumer satisfaction is the Net Promoter Score. “We look for [net promoter score] as a predictive factor of net revenue growth, net dollar retention, and as a way for patient satisfaction and making sure you can avoid costs whenever you can,” Bhattacharyya said.

Of course, the mechanics of the tech are also crucial. Bhattacharyya explained that early-stage companies need to demonstrate they’ve built technology that is “some combination of better, faster, cheaper,” he said. “Ideally, it’d be all three of those, but particularly in health care, a lot of the technology is very legacy,” he added. VCs emphasized that pre-revenue, a startup must have a service or product that addresses a huge market size within the larger health care market.

Bhattacharyya also noted he looks for teams that can set and hit achievable milestones between each early funding round. Especially in its founding stages, the startup’s ability to build a strong management team is crucial. “If you can recruit great talent we think the likelihood of success either on a product basis or customer basis will increase,” he said. 

Oak HC/FT founder and investor Annie Lamont recommended Cadence, a platform that helps healthcare providers monitor patients with chronic conditions. Cadence was launched in 2020 by CEO and founder Chris Altchek. At the end of last year, Cadence reached a $1 billion valuation after a $100 million Series B funding round led by Coatue Management. 

Bhattacharyya pointed to Medivis as a company with breakthrough technology to watch. This New York City-based medical software startup uses artificial intelligence and augmented reality to build surgical navigation and medical imaging tools. Founded by CEO Osamah Choudhry and COO Christoper Morley in 2016, Medivis has since partnered with Microsoft to build its surgical AR software “HoloLens” that helps surgeons navigate complex procedures. The startup has raised about $24.5 million so far, and its last round closed at $22 million.

You can read the full list of all the health tech startups to watch here.

Lucy Brewster
Twitter: @lucyrbrewster
Email: lucille.brewster@fortune.com
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Jackson Fordyce curated the deals section of today’s newsletter.

VENTURE DEALS

- Odyssey Interactive, a Waterloo, Ontario-based game development studio, raised $19 million in Series A funding. Makers Fund led the round and was joined by investors including Anthos Capital, The Mini Fund, Andreesen Horowitz, and angel investor Mitch Lasky. 

- Breezeway, a Boston-based property care and guest experience platform for the vacation rental and hospitality industries, raised $15 million in Series B funding. Catalyst Investors led the round and was joined by Schooner Capital.

- Keebo, a Palo Alto, Calif.-based data learning platform, raised $15 million in Series A funding. True Ventures led the round and was joined by investors including Neotribe, Pear, 406 Ventures, and Uncorrelated Ventures. 

- Mercury, a Boston-based college sports startup, raised $7.5 million in seed funding. Multicoin Capital led the round and was joined by investors including North Island Ventures, Crosslink Capital, Brevan Howard Digital, and others. 

- ByteBrew, a San Diego-based mobile game analytics platform, raised $4 million in seed funding led by Konvoy. 

- Ciro, a San Francisco-based SMB prospecting platform, raised $3.8 million in seed funding. CRV led the round and was joined by investors including Y Combinator, SV Angel, and other angels.

PRIVATE EQUITY

- CheckedUp, backed by Rockbridge Growth Equity, acquired Health Media Network, a Norwalk, Conn.-based digital health care solutions and wellness content provider to health venues. Financial terms were not disclosed.

- HomeTown Ticketing, a Nexa Equity portfolio company, acquired Ticket Spicket, a Richmond, Va.-based digital ticketing platform focused on the K-12 market. Financial terms were not disclosed.

- Longshore Capital Partners acquired Southwest Adjusters, a Dickinson, Texas-based insurance adjustment agency. Financial terms were not disclosed.

EXITS

- Incline Equity Partners acquired iWave, a Charlottetown, Canada-based wealth, philanthropic, and biographic data platform provider for education, health care, and nonprofit organizations, from Sverica Capital Management. Financial terms were not disclosed.

IPOS

- Milan Laser, an Omaha, Neb.-based laser hair removal clinic owner and operator, withdrew its plans for an initial public offering of $100 million. 

- Instacart, a San Francisco-based food delivery company, paused its plans to go public until at least next year, according to Bloomberg.