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Slava Rubin (00:00)

All right, let's do this. My name is Slava Rubin. I'm excited to have you here for our latest conversation. I'm one of the founders here at Vincent. We are your platform to give you access and information for all things pre-IPO. We have our Alternative Investment Report daily newsletter and of course our podcast, Smart Humans. And we love to do these pre-IPO conversations, whether it's one company or an interesting topic. With us today is none other than the famous Jan-Erik from Sacra Jan-Erik, say hi.

Jan-Erik Asplund (00:29)

Thanks for having me.

Slava Rubin (00:31)

Absolutely. So today's conversation is going to be covering the world of health tech. We have talked about humanoids, we've talked about AI, we've had lots of requests about what's going on in health and how should I be thinking about pre-IPO. So here we are. We're gonna be talking about the market and we're also going to be talking about specific companies. So along the way, feel free to jump in and ask any questions that you may have. You can use the Q &A. I will do my best.

to try to incorporate your questions throughout the conversation, hopefully at the right time. And let's just dive in. First, a word from our compliance department. So nothing in this presentation should be construed as an offer to sell securities or a solicitation of an offer to buy securities. All investments involve risk and the possibility of loss, including loss of principal and either past performance nor forward-looking information is a guarantee of future results.

Now, before we get into this information and talk about the high level about the market, let's go to the next slide. ⁓ Quick survey, how many of you are thinking to invest into a health tech company in the private world in the pre-IPO market this year? Just give me a simple yes or no. So is health tech something that you're looking to invest into in 2026? I'm gonna give everybody 20 seconds.

Obviously it's a bit biased of an audience since you are here for a HealthTech pre-IPO conversation, All right, three quarters are saying yes, awesome. I look forward to your questions. Let's close that, let's move on. So let's start off with what is HealthTech? What is the market? What are we talking about? So I'll just start off with this one point.

just so people understand the size of the market. know, sometimes people get excited about all these other tangential markets. Health in the United States is pretty much one out of every $5 that is spent in our GDP. So when you hear big valuations for health tech companies, it's not always because the tech is so incredible. It's because once you get market share, you can become

very big, very quickly, if you actually get some momentum. Think about that. The GDP, if the US healthcare dollar spend on health was its own country, it would be literally one of the biggest countries in the world, only behind like China, the US, and maybe a couple others. And that's literally just the spend on health in the United States.

Put that as a backdrop, Jan-Erik What are we talking about with HealthTech?

Jan-Erik Asplund (03:13)

Great point. You know, very much a huge, you know, driver of spend.

in America especially, also a huge market for technology. And so most people know the name Epic Systems, which is probably the biggest, at least privately held American kind of health tech company. They do about 5 billion a year in revenue, a little bit more than that. But this company was started in 1979, right? And then all due respect, of course, to the business, I think that there's a lot of...

You hear a lot of physicians' frustrations with Epic. It's a very legacy, incumbent piece of software founded about 60, or sorry, 40 years ago, jumping ahead in time. And so what we're seeing really coming out today in a big way is kind of a sort of new wave of health tech that is not necessarily taking on kind of the biggies like Epic directly, but are sort of around it.

adjacent to it and solving problems with a lot of it with AI, which has really been one of the big accelerators because healthcare like legal and other sort of more mainstream industries or verticals have typically been a little resistant to technology in terms of temperament or sort of ⁓ regulatory restrictions. And so that's typically been a limiter, but we're sort of seeing right now

that a lot of these AI companies are short-circuiting some of those mechanisms that slow tech adoption, capturing doctors directly, capturing nurses directly. So a lot of interesting stuff is happening in terms of innovation in the healthcare world, both in the hospital, the doctor's office, and your own home.

Slava Rubin (05:07)

When you think of the categories, can you kind of break it down as because the world of health is massive. How do you think about separating like the categories of health investing?

Jan-Erik Asplund (05:18)

Yeah, for sure. There's a lot of ways you'd cut it, think, but for us, the three sort of core categories that we've looked at are, one is consumer health. So things that you're buying at home and this could look more like your Apple watch, which you could say the Oura ring is kind of an evolution of that format and that type of product. A ring that you wear that tells you about your VO2 max and tells you when you're

not fully prepared for the day because you didn't sleep well, that kind of thing, but can also range up to the more kind of clinical diagnostic, you know, something that you might've had to go into a doctor to get in years past, similar to like a function health, you function health is basically a blood test that will give you a range of biomarkers that tell you, you know, what your overall state of health is. ⁓ So that's kind of more of a, you know, slightly invasive kind of thing that has become more productized over the last, you know, five or so years.

Then we have the more healthcare worker side, the more clinician side. So on the one hand, there's this concept of decision support. And so this is kind of where we put things like open evidence, which are helping doctors make decisions and diagnose patients effectively, kind of like the chat GPT for doctors. And then this kind of other segment of documentation. So this is stuff like AI scribes that are

listening to a doctor consulting with a patient and then are not just transcribing that and turning it into an LLM generated summary or transcript, then making that, turning that into structured data that can go into an electronic health record, be categorized and coded for billing and that kind of thing. these are the sort of three categories. There are for sure others that we could talk about and look at, but.

for the purposes of this conversation. That's sort of how we're looking at it.

Slava Rubin (07:05)

Yeah, I think that's super helpful. And just to kind of frame it, you know, the three categories are basically health coming to the consumer, which is the patient, you, the individual, you, the person listening right now. How can you take control over your health? That's a big movement. We'll talk about that in a second. There's a lot of investments in companies in that space. The second is really how to have the doctor be able to help them with their job, to do their job better.

And the third is really around efficiency and really productivity. So it's really productivity that can be for any industry, but it's really productivity towards actually the health space. What we're not covering two major categories in my opinion today is biotech. So being able to invest into the next cholesterol drug or GLP-1 or the right next, you know, blood pressure situation or cancer drug.

That's a massive market. There's a lot of tech that can support all of that, but we're not talking about the actual biotech itself. There's software that can support all that. We would definitely want to cover that, but we're not discussing the actual biotech itself. And also an interesting category could be the robotics around health, right? ⁓ Are we going to be replacing surgeons with robots and doing all that? We're doing less of that at this moment as well. So these are the major categories.

Let's go to the next slide to talk about kind of the evolution of where this market has come from. So, Jan-Erik, do want to give us a little bit of history?

Jan-Erik Asplund (08:39)

Great, so yeah, I sort of start the modern health tech era at 2009 with the High Tech Act, which was designed to really bring American hospitals and doctors offices forward into the future by mandating or providing steep incentives for using electronic health records, which were at the time more new, more unevenly distributed in terms of usage.

This was a huge boon for companies like Epic, but also Cerner, Athena Health, other electronic health record companies because they were effectively subsidizing their adoption across the country. So now Epic is a giant. These other companies are also really big. basically anyone in the US who's been into the medical system has this electronic health record. ⁓ So this among

Doctors was maybe not a huge improvement depending on who you ask because it also created a ton of documentation time, a lot of time spent charting. After you're home from work, you might have to spend a few hours creating the notes and uploading them into your EHR, which again, very legacy incumbent system. so there was sort of lot of physician burnout, a lot of complaints about these systems.

being very time consuming to use and not necessarily saving a ton of time. That said, next big.

Slava Rubin (10:04)

Really

quick to jump in there. I saw, sorry, really quick to jump in there. I actually saw that firsthand. My mom's a doctor since the eighties and I would not consider it the most tech forward. And when that EHR came out, the electronic health record mandate, that was literally my mother complaining about why can't it be the old way where we just did it with paper and then the nurses filled in some notes or whatever. But having to then, having to replicate it all via typing into the computer like this.

where my mother was very slow to do that. I definitely heard those complaints, but I do think fast forward, know, 15 years later, here we are today. It's that infrastructure that is able to leverage, you know, to make things much faster. So thanks for sharing that, Jan-erik

Jan-Erik Asplund (10:48)

Yeah, definitely the sort of the fact that electronic health records exist and that everyone has one, I think is definitely key. One thing we won't get into is kind of whether the control of companies like Epic over it and their integration or lack of integration, lack of open data is still sort of ⁓ a delaying factor. regardless, ⁓ the next sort of big jump in time is 2020.

where we have COVID and COVID kind of like the high tech act for electronic health records, COVID really accelerates telehealth, D to C platforms, all kinds of asynchronous care because suddenly you can't go physically to see a doctor. And so not only is there kind of the human incentive to seek remote care, but there's also a bevy of regulations designed to make it easier to get care remotely and to get things prescribed remotely that you wouldn't have been able to before. And this was

massive for companies like Hims and Hers, Roe, don't factor into our initial categories, but we'll talk about, ED ⁓ hair treatment, fertility treatment, all done remotely and has been a cash cow and a huge sort of shift in the way that medicine is done. Even now, obviously a lot of that stuff is still, years later is still very common to do remotely rather than in person.

Slava Rubin (12:01)

Yeah, you're seeing this amazing convergence now where the tech is getting more advanced with the AI. You're seeing telehealth become the norm. You're seeing the personalization of trying to do better by individual by individual costs are still going up. But now you're seeing this rise of trying to own your own health, which I think is like a pretty new concept. Again, back up to the 80s, the 90s, even the early 2000s.

That was never a thing, right? You either were healthy or you became sick and then you dealt with being sick. Rarely did we try to prevent anything or try to get ahead of it. And that's really becoming a little bit of the movement in the last several years. Is that why we're starting to see more dollar flows into this space?

Jan-Erik Asplund (12:50)

Yeah, I think so. think, you know, since sort of the Obamacare incentives around preventative care, I think that has sort of seeded the idea. then, yeah, we're definitely seeing a lot of that, especially now with GLP-1s, which I think are sort of, in a way, like, you know, it's a drug, but it's also the ultimate kind of preventative against so many of these conditions that come along with, you know, high blood pressure, obesity, diabetes. And so I think...

That I was gonna mention too with digital health 2.0, COVID era is kind of now really the ultimate because, know, ED, hair, fertility, I think GLP-1 is bigger than all of those in terms of what we're seeing, in terms of volume of people being signed up to, you know, again, either address the urgent, know, acute condition or be preventative.

and also remote volume. So all of those hymns and hurrers, Ro, all the other players doing TDSC telehealth have seen a huge explosion of revenue from GLP ones, prescribing GLP ones.

Slava Rubin (13:47)

Those companies that you mentioned, a lot of them raised a ton of money in early COVID, like you mentioned, the 2020, 2021 period, even 2022. In aggregate, the private dollar flows into HealthTech has been going down since COVID started. But then you see actually an uptick, you see an uptick for the first time this year. Why do you think that we're seeing an uptick? Is that just

Is that the AI dollars or what other dollars is it?

Jan-Erik Asplund (14:19)

Yeah, it's a good question. It's partly AI. Most of it is AI. And then I think some of it is along the lines of telehealth. Although I think a lot of those players raised, as you said, they raised enough in 2021, 2022 that they're not driving a lot of it. I think for the most part, if you look at the increase from last year, it's a lot of it is AI.

Slava Rubin (14:47)

Okay, great. So again, if anybody has any questions, feel free to send them into the Q &A. We'll incorporate. We want to give everybody some backdrop on the market we're talking about. And now we're going to dig into four specific investment opportunities that you could consider. It's not exhaustive of all the opportunities, but we're going to dig into these four. So let's first start with Oura. I have my Oura ring on right here. I personally have been a customer for something like seven years, which is quite remarkable.

practically from the beginning. yeah, tell us about Oura. What is Oura?

Jan-Erik Asplund (15:22)

Yeah, so I think Oura began, I believe, as a Kickstarter campaign about a little over a decade ago. And the ring has been through several iterations since then, improving the hardware and software side of it. So today, and add anything if I forget anything here, it tracks your sleep, your readiness for the day, it tracks your overall activity, your stress.

Those being kind of the key things, then there's kind of, you know, one of the big features recently has been women's health. So cycle tracking and ovulation prediction, which apparently this has been the fastest growing segment at Oura. So yeah, today, you know, the ring goes around $300, $400. There's a small monthly subscription attached. They've sold over 5.5 million rings and yeah, they've just been consistently doubling revenue.

every year since 2022. And we just recently saw that they hit roughly a billion in revenue in 2025. yeah, value to 11X. think, yeah, there's a lot of interesting stuff in terms of sort of the tech side of it. But I think, yeah, the key thing is kind of integrating into your life, being able to tell you all these kinds of things about yourself.

from a basic level of sleep and activity up to kind of the more, a little bit more high resolution, fine grained stuff. Like if you're trying to get pregnant, helping you track your cycle. If you are pre-diabetic, they now have this kind of glucose data integration with photo logging in the app so that you can track your diabetes. So getting a little bit more intensive with some of the workflows I can help you out with. I think that's kind of the key.

that's differentiating them from some of the other smart rings in the space.

Slava Rubin (17:19)

Yeah, I I would put this in the category of like the Internet of Things like an IOT device that is helping you be healthy, right? This could be whoop. This could be eight sleep. This could be a Fitbit This could be you know many different things that are out there We just happen to choose this company to highlight for this space We think you know, it's one of the most interesting and also has a pretty significant valuation

I mean, they just recently raised at $11 billion. I mean, that's not 380 billion anthropic numbers, but just a few years ago, five years ago, we were impressed by an $11 billion valuation company. Nevertheless, this is literally quote unquote, just a ring. And the fact that they're doing a billion dollars of revenue is pretty impressive. I know that they're looking to evolve

from hardware to really being much more of a subscription product, which they've slowly been evolving with. Why do you think the jump in revenues from, they're already doing nice growth in 2021, 22, going from the 100 % growth, 70 % growth, small growth, and all of a sudden these huge growth numbers in 23, 24, 25. Any opinion on that?

Jan-Erik Asplund (18:41)

Yeah, it's a great question. I think they're sort of, they've been really well positioned for, you know, they could never have predicted, right? That, you know, they would be sort of launching and five years later they would be sort of, you know, worldwide epidemic that would, you know, instantly make billions of people very conscious of their health and wanting to track their health. And then we'd also make it, you know, remote care, such an attractive option. And so,

I kind of see it as a outgrowth of this wider interest in kind of health, intensive health monitoring, intensive health data. also, so, cause I think a lot of it is just sort of adoption, increasingly finding adoption within the market versus like.

upselling, dramatically upselling their existing customers, which I think there's been some of that in terms of the monthly subscription costs and that kind of thing. But 80 % of the revenue roughly is from kind of new hardware sales. So it seems to me that they're just sort of riding this wave, continuing to expand. More and more people kind of want this data about themselves. And that seems to be driving a lot of it. mean, there is also some kind of B2B

partnership stuff that's very interesting. But yeah, that's kind of how I look at it.

Slava Rubin (20:08)

The Dexcom investment is super interesting. I Dexcom is a public company focused a lot on diabetics and continuous glucose monitors to try to really help people stay healthy for as long as possible. They invested $75 million. I believe it was at the $5.5 billion. I can't remember if it was at the $5.5 or the $11 billion. That's a pretty huge partnership to be able to then try to use the Oura combined with Dexcom. Start doing that with, you know,

photologging meals and calories and glucose, you're starting to really get to know the patient or the customer. How big can Oura become? Is this a good entry point at $11 billion if you could get in? Are we talking about potentially a $100 billion company or are they already pretty expensive?

Jan-Erik Asplund (20:58)

One thing also that I wanted to say that I forgot is that they went into Target and Amazon in 2025. So they became suddenly a lot easier to buy and a lot more visible. But yeah, think to look at the Dexcom thing, think it's clearly getting into a use case that has higher retention, higher value, because you're not just talking about getting data on your sleep.

for peace of mind or for self-improvement, but really the real-time kind of nutrition, glucose coaching use case, which is something that has both the higher value B2C skew and also has a sort B2B potential where companies already spend tons of money via their insurance on programs to help people on their teams with diabetes or pre-diabetes.

And so I think it opens up a potential kind of, you know, more of an enterprise play potentially for them to go after. But yeah, I think in terms of valuation, feel like maybe slightly biased because I'm also from Finland and Oura is from Finland, you know, made up of a lot of ex Nokia people on the hardware side. And so it seems to me from the outside that the ring

continually has improved and the data seems to be improving. The revenue is doubling every year. And I don't think that the health obsession that people have with data is going anywhere. So my impression would be that it would be good to own. But as the user in the chat, I'd love to hear what you think.

Slava Rubin (22:36)

Yeah, I I think it's a solid product. I think that they're doing a great job to add subscription. I think that's going to make their valuation much more attractive. Keep in mind, they're already doing a billion dollars of revenue. A bunch of that revenue, 80 % of that is lower margin as hardware. So 11x multiple is not a very expensive multiple. So it's easy to say 11 billion is expensive, but 11x multiple is actually quite cheap.

I think you said it right, which is the obsession around your own health is not going away. I think that momentum is only speeding up. And I think the actual physicality of the ring as a central focus of trying to have that ⁓ interaction with the data is going to keep getting momentum. I don't know if they're a standalone company 10 years from now. My guess, if I had to be put on the spot as they are not, but could they become

on the way to a hundred billion dollar company along the way. I think it is possible. But I do think an Apple, a United Health, potentially some other company in the pharma space or others would potentially want to pick them off as a huge &A opportunity in the tens of billions of dollars. But who knows, could they become a hundred billion dollar company? I think it's possible.

⁓ But I don't think you'll be super rapid. But they are not the most expensive company right now. So I do think it's interesting.

Jan-Erik Asplund (23:58)

Yeah, I love the Oura idea, the Apple. I think that those two, you very similar, you know, branding.

Slava Rubin (24:05)

All right, we do have a question on Oura but do they have plans to address how to make the data app go for actual care? You know, it's interesting, this opportunity to, cause right now they're not using the data directly towards the healthcare, right? Trying to tie it closer to the healthcare opportunities and trying to be proactive and reactive with the Oura data to actually turn that into part.

Because imagine for second you combo some Dexcom, some Oura, some Function, right? You tie that right into your actual primary care and you throw in an AI voice bot that tells you what you should be thinking about or almost like your concierge medicine doctor via AI talking to you each day. I mean, it's pretty exciting, right? Will any one company own that?

I'm not sure who's gonna own that, because it needs to be stitched together. But I do see all of this data with the AI and personalization stitched together to be a much more interesting personal health experience 10 years from now. Now that could be three years from now, but for sure 10 years from now. Let's move on to the next company. Abridge. This is definitely in the camp of improving the efficiency of the doctor. And this is

been a rocket ship. Talk to us.

Jan-Erik Asplund (25:23)

Yeah, so interestingly, Abridge got started before COVID. think AI scribes have become so associated with post-COVID doctors' interactions, but it started before COVID as an app on your phone, actually for patients to use, that when they talk to their doctor in an appointment, they can record it. And then the recording will be transcribed using their own kind of, this is pre-LLMs, but using machine learning models that are trained on healthcare.

to help you remember what to do basically. Then they sort of went the other way during COVID, went to the doctor's side and became a AI scribe. Because like we were talking about with sort of V1 healthcare tech, one of the big issues was the amount of human ⁓ manual data input that was happening, taking up hours per day. And so AI scribe sort of presented this new product ⁓ market fit around

AI transcription of conversations, turning those into the notes so that you can, instead of having to retype all these notes and put them into your EHR, you can just copy and paste or have them sort of auto sent into the EHR via this AI scribe. And so that was Abridge's sort of key shift, got them from two million around the time around 2022 to...

know, a hundred million as of last May. So obviously, yeah, we've seen this across a lot of these AI scribe companies, but Abridge has been one of the fastest growing for sure. And yeah, sort of in comparison to some of the other ones, they've gone more enterprise. They've made a deal with Epic to be a sort of preferred partner of Epic, which gave Epic an equity stake in the company and ongoing revenue share, which is important. And then,

Yeah, so they've been able to sort of get into some of these giant hospital systems like Kaiser, the Mayo Clinic, and they have been able to sort of make themselves the default AI documentation tool in a lot of places.

Slava Rubin (27:25)

So people are familiar with like Cursor and Replit. Let's call that like the Vibe coding companies. Those companies are on fire. I heard Cursor is like potentially gonna be raising their monster round soon. I would put Abridge and these AI scribe companies, almost like the health tech version of those companies where it's this wrapper on top of AI and then they're targeting specifically this health tech focus.

These guys went, like you see in this chart, from $6 million run rate in 23 to $100 million plus in 25, which is crazy. What do you think of them at a $5 billion valuation?

Jan-Erik Asplund (28:12)

At five, think it's interesting. My concern is maybe roughly revolves around the fact that there are so many AI scribes. ⁓

Slava Rubin (28:22)

That was literally going be

my next question. seems to be somewhat of a commodity. Commodity may be too aggressive of a word because each one is going to say they're better than the other one. But how do they retain this valuation and this growth if there's 10 others or 50 others out there?

Jan-Erik Asplund (28:41)

Yeah, exactly. think it is. I mean, it was such a compelling pattern of product to build during early COVID that a lot of people built the exact same product. And it also just played so well off of sort of the inherent strengths of, of LLMs. And so that's why you had a bunch of iterations of this product come about. The main abridge difference has been this partnership with Epic, which made them, you know, from 2023 onward,

kind of have this pride of place in the Epic marketplace and the Epic store and has been key to these enterprise sales that they've been able to make.

Slava Rubin (29:20)

You're raising a great point here, which is you're not saying this directly, but in health, often, if it's not the biotech, which is full on new science, it's rarely the tech and the innovation that's breaking through. It's about having the distribution, right? It's about having that killer way to get distributed into this gigantic, enormous market. So with Oura, somehow they built it bottoms up.

onto people's fingers and now they have this massive distribution network which has huge data, et cetera, et cetera, et cetera. So if they wanna push new product or new features or new prices into that, they can do that. And here, it was somehow getting access to Epic. Again, Epic is the 800 pound gorilla. The company's been around for 40 years and kind of owns electronic health record in the United States. So they have this huge partnership which is very difficult for most to get.

Jan-Erik Asplund (30:17)

Absolutely. I think that early on it was huge. Again, this partnership was in 2023, so quite early on after the of Chat GPT moment. we have sort of heard, if we go back at the time, Abridge had a deal, Nuance had a deal, which was Microsoft.

And so Epic had really deep pockets, was able to give them this great head start on enterprise sales and help them get into all these other hospital systems, which like as you gesture to, it's very hard to do if you're just a startup to sell into Kaiser Permanente because you are dealing with right off the bat, these very long sales cycles, tons of compliance lift to get in a position where you can even start selling into these places. So yeah, it's a huge.

advantage at the time. What we've sort of seen now or shifted over the last year, which makes me a little more concerned about Abridge and not having inside information. know, Epic seems to own a lot of the equity of Abridge. A bridge pays them big revenue share. They were a development partner early on, but now Epic has their own AI scribe as well. A bridge also offers integrations with

a bunch of other AI scribes that are out there on the market, including Nuance, which is part of Microsoft, and a bunch of other ones. So I guess the way I see it is that sort of Abridge made this deal with Epic, but Epic has other partners, has their own AI scribe. And so it's hard to say at this point, is it beneficial for Abridge?

you know, they're slightly behind, they're slightly ahead of their competitors because of the integration, but at the same time, it's not a super exclusive integration anymore, particularly.

Slava Rubin (32:02)

Yeah, I mean, the interesting thing about Abridge and really this entire AI scribe market is it's become such a commodity and such a demanded product that I think you're going to see it almost like as a loss leader, where more more the scribe product is going to try to be the wedge into that customer, i.e. the practices, the doctors, etc., the hospitals. The goal will then be to get other higher margin products so you can sell a suite of products.

to the end customer. The challenge is will you be able to actually get away with that as the AScribe, as the loss leader, as it becomes competitive and you try to layer in all those other products. So really, I think you need Abridge to become kind of a health tech super app for it to become, let's call it successful and to be able to retain this value. Otherwise, whether it's Epic or these other players, I am concerned that there's going to be little bit of the commoditization of that ascribe product.

This story definitely has chapters to go. I do think it has a chance to become a monster company, or there is potential that it erodes at its revenues because all these other companies keep on nipping at different parts of it. Any last thoughts, Jan-Erik

Jan-Erik Asplund (33:16)

think you're completely right that it's part of a platform and not necessarily standalone business, the AI scribe function that is. And so we are seeing all these players building out, billing and things like that that we'll discuss later ⁓ as we talk about the future.

Slava Rubin (33:31)

All right, awesome. Let's go on to the next company. Open Evidence, super interesting. In short, you know, people are calling this Chat GPT for doctors. So talk to us.

Jan-Erik Asplund (33:42)

Yeah. So open evidence was founded, again, another one founded pre-CHAT GPT and was doing AI, specifically doing machine learning models that were trained on healthcare. And so the idea was, was pre-LLMs, was to be able to use AI to help physicians make diagnoses and think about treatment by generating actual answers that you can trace back to citations in medical journals.

Now, chat GPT comes out, LLMs are more popular and the product has taken a leap from there, both on the technical side and also on the awareness interest in using this tool side. Today, open evidence is like you said, like the chat GPT, like the Google for Doctors where you can type in a very

hyper-specific scenario with a patient and get answers back, synthesized from medical journals in sort of the top American and European medical journals that are out there, which OpenEvidence has exclusive partnerships with to use. So I think that's key for sure. And then they monetize on ads.

So with all this discussion of open AI, putting ads in chat GPT, it's been working very well for open evidence, growing to 150 million in annualized revenue last year from about eight at the end of 2024. And that's virtually all from ads, which can be incredibly lucrative in the sort of pharmaceutical medical device world. You can get four figure.

cost per million impressions or thousand impressions. So yeah, very interesting business in this space.

Slava Rubin (35:26)

Why, just to double-click on this, why can I just not use actual chat GPT or Anthropic to get the same answers?

Jan-Erik Asplund (35:34)

You can, and we'll talk about that, and I do frequently to get health questions answered. But if you are a medical professional with someone's life on the line, first of all, you're not supposed to type that stuff into Chat GPT as a doctor just because of HIPAA and other reasons, putting in patient information, that kind of thing. So while doctors do do it,

The other big reason why is because the citations are not, you know, if you sort of think about medical grade, you want to make sure that every assertion is backed up by peer-reviewed And that's really what open evidence has indexed on in a big way. know, anyone can go to their website and actually try it out. And I did this and saw that the citations are much more, you know, ⁓ in depth, much more detailed. And then also,

Chat GPT and Claude don't have access to the New England Journal of Medicine papers and that sort of thing. So if you want to get the best answer and you're a doctor looking for information for a treatment, this is where you would go.

Slava Rubin (36:31)

So this one is the highest multiple, ADX. So using that bar, it's the most expensive of the companies we've spoken about. What do you think the potential for this, what does this look like three years from now, five years from now?

Jan-Erik Asplund (36:46)

Yeah, think, you know, they're the most kind of, yeah, highly valued, I think also probably by some margin, the highest ⁓ gross margin business here, because this is pure software. It's, you know, the closest thing in health tech today to kind of looking at Google's business model in the early 2000s, where you're just selling ads against queries. The difference here is you have basically only high value queries, you know,

no low value queries basically, although you do have the additional cost of the machine learning models being used to generate the answers. But yeah, I would imagine that the trajectory could look somewhat Google-esque in that you continue to grow the advertising machine and the advertising machine subsidizes your expansion into these adjacent product areas, which we've seen them already launch.

a dialer, is basically a HIPAA secure communication tool within their app that lets doctors call their patients and do voice messaging, do voicemail, which is basically because doctors don't want to use their personal phones to do this stuff. And then the other thing is actually AI Scribe. So they've launched an AI Scribe and to talk about that being a feature and

Slava Rubin (37:57)

When is your A.I.

Jan-Erik Asplund (38:01)

The Sacra AI scribe, yeah, very soon.

Slava Rubin (38:05)

Exactly, exactly. Let me throw some cold water on this one, which is what if in the next few years, Anthropic, Chat GPT and others just say, you know what, this is a great market, let's copy paste and this gets commoditized away. Is that going to happen?

Jan-Erik Asplund (38:22)

think it's possible. think clearly chat GPT is going strongly on that and Claude recently launched Apple health integration. they're a little bit more slow going, but chat GPT is definitely going after it. think where I think it'll end up is that chat GPT and Claude will own a lot of the consumer side, will own a lot of your health questions that you have at home, maybe divert a lot of those visits to healthcare away.

it seems unlikely to me that they're going to go after doctors in this way. I think there seems to be a lot of resistance from healthcare professionals. Some of them are even skeptical of open evidence, but they've really won people over a lot with their sort of partnerships with New England Journal of Medicine and others, and with the citations and that overall sense of trust and reliability that that creates versus

OpenAI and Anthropic, which do have a reputation for this, for hallucination and all this kind of stuff, optimized more for consumers. The partnerships, it's worth mentioning, emerged because open evidence showed the New England Journal of Medicine and others what they were doing and said, basically, do you want your stuff to be synthesized in chat GPT or do you want us to be the only ones able to use it? And so there's a bit of a non-

you know, non transactional, you know, cultural, like reaching for reliable trusted data that has driven those partnerships where they, the journals of medicine want the highest quality information out there. They don't want open AI and anthropic using it. And they were offered, you know, I'm sure insane amounts of money by open AI and anthropic to be able to train on their stuff. And they refused it. So.

I think there's some institutional cultural safeguards there in addition to the business model question of, know, is it big enough for them to really go after? Yeah, not sure, but that's just my take.

Slava Rubin (40:20)

Perfect segue to the next company, which is actually OpenAI, chat GPT focusing on health. So if we go to that next slide, do we think that maybe we should be investing right into OpenAI at $730 billion valuation? know, Amazon just put in 50 billion into that round. Should we throw in a few bucks also? Is that the right move? Focus on health.

Jan-Erik Asplund (40:43)

I mean, I wouldn't say no. think especially, you know, if you use it for health and you know that it might not be perfect, but I think it often, for me, the main competitor or the main disruption that will happen in the short term with Chat GPT health is things like Teladoc, you know, and I think that those doctors and nurses that you contact on that, on remote.

remote care, bundled in with your insurance or whatever, they still clearly serve a purpose in terms of the compliance of getting a sign off on a prescription or what have you. But Chat GPT health, anthropic health, I think as they get better, the potential for those to sort of handle a lot of these like frontline ailments and deflect away from actually making a visit to a doctor.

or an urgent care or an ER is pretty huge. And we're seeing that from a lot of the, we're seeing that from a lot of DTC healthcare platforms that are launching their own chatbots. And so I think that's a really interesting use case. We'll see where the sort of enterprise offering goes. It could be interesting. So I could be totally wrong on open evidence, but I do think on the consumer side, it'll be big for sort of personal health.

Slava Rubin (42:00)

Do you think the OpenAI for healthcare is just gonna be the experience we see today or fast forward a year or two from now, is there gonna be a completely different entry into OpenAI trying to compete with an open evidence or a different experience with just HIPAA compliance, et cetera, et cetera? Do you think there'd be a different entry into OpenAI? I'm just asking your opinion.

Jan-Erik Asplund (42:21)

Yeah, I think it's tough because they don't want it to be perplexity like where you have a bunch of different, you know, products. I think that they want to keep us sort of unified. And that is also part of what makes it challenging to do things like healthcare, because you need a lot more citations. You need a sort of different looking answer, I think, to do that right. Same with shopping and other kinds of things. So I think for doctors, as they do kind of push into the enterprise, ⁓

healthcare space, I think that that's gonna be a different looking interface for sure. And then I think for consumers, yeah, it'll be interesting. My bet would be that it won't be, it'll just be in chat GPT. You'll go to settings and connect your Apple health, connect your Oura ring connect everything, and then it will be able to give you contextual answers in chat GPT about your health.

I would be surprised if they went and built out their, you know, a separate app or even a separate, you know, sort of screen on the, on the website.

Slava Rubin (43:17)

Awesome. Let's move on to discussion about the rest of the market just to give a little bit more about the ecosystem and other players. Before we go there, just really quickly, Jan-Erik, to put you on the spot, we covered four companies. Oura, OpenEvidence, ChatGPT, obviously OpenAI, mean, and then Abridged. So give me your ranking, one through four.

Which one do you invest into first and which one do you invest into fourth? One through four, give me your ranking.

Jan-Erik Asplund (43:47)

Yeah, I think for me, open evidence would be, well, yeah, maybe.

Slava Rubin (43:54)

at this price, each one for their respective price.

Jan-Erik Asplund (43:59)

Yeah, I think open AI probably first, not necessarily for the health specifically, but open AI, ChatGPT then open evidence, then Oura, and then Abridge last, I think.

Slava Rubin (44:11)

Got it. So first with OpenAI for you.

Jan-Erik Asplund (44:15)

⁓ yeah, yeah, I think so.

Slava Rubin (44:18)

All right, I'm gonna be provocative. I'm gonna put open evidence first because much higher potential for return there. I do think OpenAI has a chance to be a $5 trillion company, but that's only a 7X from what we're talking about. Give me a 7X on open evidence. We haven't even hit 100 billion yet. So a lot of room to run there if possible. I think Abridge could be really interesting, has a chance to be $100 billion company. I just am concerned about the competition.

Oura I think is maybe one of the, let's call it, safest bets, where I think the floor is maybe the highest, but maybe the ceiling might be the lowest. But I think Oura could be a surprise. It's interesting. I like how we're pretty similar but different. So give us a little bit more color on the ecosystem. What else has there to look at? How should we think about finding new opportunities?

Jan-Erik Asplund (45:07)

Yeah, in AI scribes, think, you know, one of the interesting companies we looked at a few times last year in the year before was Freed, which Freed is very similar to a few other AI scribes like Heidi Health. And their key differentiator has been that they haven't gone into the big hospitals, big medical systems, which like we said, huge long sales cycles, very difficult to get into. Rather, they've been targeting individual clinicians and

kind of like practices of three or fewer doctors. And what we've sort of seen is one of the first strong examples of this kind of product-led growth in healthcare, which usually doesn't happen. Clinicians not being crazy about paying for SaaS software, but it has happened with Freed, with Heidi Health, with a few others. yeah, obviously that is a space with even more competition.

than any sort of enterprise ambient scribe world, but still interesting to watch to see if they can sort of go up market from there. And then consumer health. think this is what you were talking about with regard to an operating system for your health. It's something that can bridge your kind of daily stats, daily metrics from your ring or from your watch with kind of more intensive studies, blood tests.

MRIs, that kind of thing, and put it all together and tell you what's going on with your health. And so they're one of the companies that is really going hard after this from the biomarker blood test and MRI side. And yeah, then the sort of last category, DSD telehealth. think one of the companies that we've looked at recently is Ro, which had sort of post COVID actually flattened out, you know, doing ED, doing fertility, doing hair, remote care.

you know, had sort of been somewhat tapped and GLP ones kind of came along at the perfect time and they almost doubled revenue just in 2024. And, you know, in contrast to a bunch of other players in that space, they have kind of vertically integrated stack. They have their own pharmacies, their own labs. They do in-home blood tests to get you ready to go on something like a GLP one. And so they're making a huge play to sort of.

to own that segment of DTC telehealth, especially with GOP1s.

Slava Rubin (47:34)

And this is just a selection of the potential companies. We had a question about which of these are available to invest into today. These are all private companies. Obviously, you'd have to figure out how to get into them via secondary or directly on the cap table into the next round or through somebody who already owns some shares. So that's a completely separate conversation. Obviously, you can take a look at some of our other episodes we've done about how to get into private companies. I'm personally biased here. My fund is one of the first investors into Hone Health.

So just putting that out. All right.

Let's finish up with some predictions. for the future.

Jan-Erik Asplund (48:10)

Yeah, so I think we've thrown some cold water on AI scribes. I think the sort of necessary thing to talk about on the other side is how they are very compelling wedge product into hospitals. Absolutely. And basically, the point is when you are selling SaaS into almost any industry, it is great to be near to the point of payment. And when you're selling into a hospital or health care clinic,

selling an AI scribe actually does help you get closer to the point of payment and into the transaction flows, which we started off talking about, right? The amount of money spent on healthcare is, you know, utterly insane and AI scribe.

Slava Rubin (48:47)

Sorry

to interrupt, but in case people missed it, one out of every five dollars in the United States is spent on healthcare. So just to double click on what Jan-Erik just said.

Jan-Erik Asplund (48:59)

Yeah, exactly. And so these notes that doctors take are very important for billing because it's the conversation and the recording of what is being done in a clinical way that ends up in the ends up being coded, which is basically applying the insurance relevant tag to everything and then being submitted for prior authorization to the insurance and then plays a part in billing.

and then plays a part in actually getting paid as a ⁓ medical facility. So what we're seeing so far is for the most part, these players in AI Scribes are not just trying to build a business on AI Scribe, they're trying to move into the sort of revenue cycle management, making sure that doctors are getting paid for the procedures that they're doing, making that as easy as possible, and then sitting in the middle of the transaction flow, which

gives them sort of a place to add that to their business model, right? Taking a cut of transactions, which has the promise of being, I think, a giant business.

Slava Rubin (50:01)

Yeah, I mean, I think that the health industry has been somewhat slow to adopt technology for the previous decades. I think that has all been infrastructurally been built up for what's happening now and for the next decade. I'm actually very, very excited about the changes that are going to be happening. I would not be surprised if each one of us has our own concierge doctor who's calling us every single day or that we're interacting with every single day.

but that's actually AI and that's connected to the various things that we're eating or our movements or our personal data. And we're able to just try to keep ourselves proactively healthier, which is net net very positive for everyone. So I think I'm very bullish on the market. The challenge as an investor is to identify which are the right companies to invest into that will be able to scale into this and not get commoditized away.

So I hope everybody enjoyed this session. We covered a lot of content. It's a really interesting market. And Jan-Erik, as always, thanks for being incredible.

Jan-Erik Asplund (51:05)

Thank you being too kind

Slava Rubin (51:07)

Have good rest of your day everybody.

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