AI startup OpenEvidence doubles valuation to $12B in latest funding round
OpenEvidence, an AI startup known as “ChatGPT for doctors,” has secured a funding round that has doubled its valuation to an impressive $12 billion, as reported by The Post.
The Miami-based startup, which uses data from top scientific journals to train its chatbots, recently closed a $250 million financing round led by Thrive Capital and DST. This news was initially reported by CNBC.
OpenEvidence initiated its fundraising journey in February with a $75 million investment from Sequoia at a $1 billion valuation. Within a few months, the company’s valuation skyrocketed to $6 billion.
The company has raised a total of $700 million in less than a year from notable investors such as Google Ventures, Nvidia, Kleiner Perkins, Craft Ventures, and Mayo Clinic.
Founded in 2022 by Daniel Nadler, a billionaire poet who previously sold his company Kensho Technologies to Standard & Poor’s for $700 million in 2018, and Zachary Ziegler, a former Harvard PhD student specializing in AI.
“OpenEvidence is essentially ‘ChatGPT’ for doctors when viewed from a distance. However, it’s a distinct platform when examined closely,” Nadler stated.
“It’s purpose-built specifically for doctors, offering a professional tool that is free for them to use. The platform is trained on specialized medical content sourced from publications like the New England Journal of Medicine through strategic partnerships,” Nadler added.
Nadler claimed that over 40% of physicians are already utilizing the tool, indicating significant potential for growth in the healthcare sector, which represents nearly 20% of the US gross domestic product with annual spending of $5 trillion.
“Healthcare is a major segment of the economy, and there is substantial room for innovation and success within this space,” Nadler expressed.
Leading industry players like OpenAI and Anthropic have also introduced HIPAA-compliant versions of their chatbots, namely ChatGPT Health and Claude Healthcare.
Nadler highlighted OpenEvidence’s extensive collection of high-quality health data, positioning the company ahead of its competitors.
“We have amassed hundreds of millions of real-world clinical consultations from verified physicians, creating a feedback loop that is incredibly challenging to replicate,” Nadler explained.
“Even if someone were to emulate our strategy today, they would still lag behind due to our partnerships and access to real-world usage data,” he added.
Nadler emphasized that the company’s focus is on establishing strong relationships with physicians.
“The majority of healthcare services in the US are delivered in small practices that lack IT resources or budgets for expensive software, not in billion-dollar hospitals in major cities,” he noted.
OpenEvidence generates revenue through advertising, giving it an edge over competitors like OpenAI, which recently announced plans to test ads on ChatGPT.
Last year, the company generated over $100 million in revenue, predominantly through organic growth. Notably, 95% of new users discover the app through word-of-mouth referrals from other medical professionals, according to Nadler.
Nadler also mentioned that OpenEvidence is striving for a more disciplined approach compared to companies that plan to spend billions over the next few years, taking a jab at major language model developers.
While AI giants have been actively acquiring other companies, Nadler expressed his desire to keep OpenEvidence independent.
He indicated that he would consider an IPO for OpenEvidence once larger companies like SpaceX, OpenAI, and Anthropic go public.
“There is a natural order to these things. Foundation model companies will likely go public first, followed by others. This is how the cycle usually unfolds,” Nadler explained.
