Tender is spotlighted in Well+Good's latest article, diving into burnout among the Sandwich Generation—those juggling the care of aging parents and children.
Founder and CEO Shauna Sweeney shares a story that resonates with many: nearly 25% of American adults balance caregiving on multiple fronts while maintaining their careers. Tender’s AI-powered platform empowers families to Care Smarter by providing an intuitive, secure, and efficient way to manage a loved one’s care.
Read the full article here.
Auxa Health is Revolutionizing Healthcare Access Through AI-driven Solutions
Auxa Health was recently spotlighted in Forbes for addressing a significant healthcare challenge: navigating the complexities of benefits.
Their AI-powered platform simplifies access to Medicare, Medicaid, and public benefits programs, streamlining processes to enhance patient well-being. Led by CEO Monica Chopra, Auxa's mission-driven team is dedicated to making healthcare more accessible and efficient for all.
Read the full article here.
Vital Signs: Monitoring the Healthcare VC Space
Introduction
Before the year comes to a close, we are excited to take a break from AI hype and share our thoughts on one of the most compelling investment areas: healthcare.
For those of you who don’t know us, Laconia is an early-stage venture capital firm based in NYC, investing in software companies that are changing the way business is done.
Over the past three years, we have been running a fellowship program called the Venture Cooperative where we engage with experts globally to deepen our industry expertise and identify the most promising opportunities.
It was through this program that we got to work with the brilliant Dr. Swathi Varanasi on a deep dive report on healthcare. “Dr. Swathi”, as she is known in her field, has both clinical expertise and market strategy experience. Her report includes market dynamics, investment trends, subsector highlights, and emerging investment opportunities, with a particular focus on the b2b software space.
Investing in healthcare is not a new concept for us. Laconia has been actively investing in the healthcare and digital health space since 2020 and, more recently, we have made several investments in companies such as Yuvo Health, Auxa Health, and Tender (more context below).
As the report explores, key healthcare trends present exciting investment opportunities. These areas include:
1) Provider operations platforms that streamline data management, improve communication workflows, and optimize healthcare delivery;
2) Care system changes such as collaborative and value-based care; and
3) Personalized/alternative care offering personalized care solutions for populations with unmet needs and in marginalized communities such as Medicaid and Medicare.
Our investment in Yuvo Health, a technology-enabled administrative and managed-care solution for community health centers (CHCs) marks our excitement for value-based care. Yuvo Health is driving CHCs’ growth by supporting their back-office functions and providing mechanisms for them to successfully participate in the value-based care ecosystem.
We have also invested in companies that are focused on delivering personalized care. Auxa Health, an AI-powered health benefit navigation technology, revolutionizes how healthcare organizations and individuals navigate the complex world of Medicare, Medicaid, and public benefits. Tender, an AI-powered smart care system, empowers anyone to confidently and capably care for their aging loved ones.
If you are building in these spaces, we would love to learn more.
Without further ado, here’s a summary of Dr. Swathi’s insightful sector deep dive report.
(written by Dr. Swathi Varanasi)
Healthcare Market Overview
The healthcare industry consists of–what Dr. Swathi refers to as–the 4 P’s–providers (hospitals, clinics), payers (insurance companies), pharmaceutical companies, and patients. The U.S. healthcare sector continues to grow, driven by factors such as an aging population and technological advancements. With healthcare spending projected to hit nearly $6.2 trillion by 2028, the market presents significant investment opportunities. The United States has the highest healthcare spending globally, reaching $10,224 per capita in 2020—double that of other high-income countries, like Germany and France. Healthcare spending represented 19.7% of the U.S. economy in 2020, a steep rise from just over 8% of GDP in 1980.
Within this ecosystem, healthtech platforms with a B2B business model have emerged as essential components in enhancing patient care, optimizing operations, and driving efficiencies. From clinical decision-making tools to patient engagement platforms, these technologies are revolutionizing how healthcare services are delivered.
Healthcare Market Segmentation
Despite broader economic challenges, healthcare VC investments showed resilience in 2023. Venture capitalists raised $19 billion for healthtech-focused funds, making 2023 the third-best year in healthcare fundraising in the past decade.
The healthcare market in 2023 is segmented into four key domains: Pharma/Biotech/Digital Therapeutics, MedTech/Devices, Diagnostics/Tools, and Healthtech. Each segment plays an interconnected role in advancing clinical care, with healthtech acting as the digital backbone that supports innovation and data-driven insights across the entire ecosystem.
Healthtech Investment Landscape
Healthtech is rapidly evolving, driven by three key trends: personalized care, operational excellence, and care system transformation. At the forefront of healthtech innovation is the recognition of data as the lifeblood of progress. B2B SaaS platforms that facilitate seamless data exchange are crucial for streamlining workflows, enhancing efficiency, and ultimately driving improvements in patient outcomes.
Although healthtech investments tapered from $44.3 billion in 2021 to $23.1 billion in 2022, and further to $8.2 billion in 2023, the sector remains robust. Funds like Plug and Play, Alumni Ventures Group, Alexandria Venture Investments, Gaingels, General Catalyst, Octopus Ventures and M13 were some of the most active healthtech investors in the US, UK, and Europe between 2022-2023. The U.S. led the healthtech market with $6.9 billion invested in 2023 alone, demonstrating the ongoing demand for technology-driven healthcare services.
In 2023, healthtech secured $10.6 billion in funding across 715 deals, with provider operations leading the way at $4.1 billion. A notable portion of this growth is closely tied to the integration of generative AI into healthtech solutions. Venture capital deals for healthcare AI have surged 2.1x since 2019, a growth rate nearly double that of AI in other tech sectors. Currently, about 15% of healthcare companies receiving VC funding have incorporated AI and machine learning technology into their products, with seed-stage valuations increasingly favoring those leveraging AI.
Companies like Livongo, Forward, Noom, and Lark are utilizing AI to monitor quantitative health metrics in the alternative care subsector—one of the most invested areas within healthtech in 2023. Other companies are using AI to enhance clinical trial processes, develop advanced imaging technologies, and reduce provider and administrative burdens. Despite gaps in AI, such as racial bias, diagnostic accuracy, and ethical concerns, this category within healthtech shows promise. The market continues to grow, with new AI-enabled healthtech companies emerging monthly.
These trends underscore the importance of digital tools, data-driven insights, and AI integration in driving the future of healthtech. There is a significant opportunity in providing innovative, AI-powered solutions that address the evolving demands of the healthcare sector while advancing clinical decision-making and patient care.
Key Investment Highlights
Provider Operations: This subsector emerged as the leader in healthtech VC investments in 2023, attracting $4.1 billion across 372 deals. B2B platforms focusing on provider operations are gaining traction by offering scalable solutions that streamline data management, improve communication workflows, and optimize healthcare delivery. Companies like HeartFlow, ShiftMed, and ShiftKey collectively raised over $715 million, highlighting the subsector's focus on enhancing efficiency in provider-patient interactions.
Alternative Care: Alternative care secured $4.2 billion across 234 deals in 2023, indicating a strategic pivot toward high-risk, high-cost populations and specialty care. B2B platforms in this space are increasingly supporting models of value-based and in-home care. Companies like TailorCare and Author Health were early-stage investments in this segment, attracting $60 million and $342 million, respectively. The emphasis on personalized care for populations with unmet needs and in marginalized communities marks a time-sensitive investment opportunity.
Value-Based Care (VBC): Value-Based Care continues to gain traction, particularly within the alternative care subsector. In 2023, VBC-focused companies attracted nearly half of the healthtech mega-deals, highlighting a shift toward care models that prioritize long-term health improvements and cost efficiencies. Major investments include Carbon Health's $100 million and Strive Health's $166 million, reflecting a trend where reimbursement models are aligned with quality of care rather than the volume of services. B2B platforms that support VBC through care coordination, data analytics, and patient engagement tools are critical in driving this model forward. As healthcare systems increasingly shift toward value over volume, VBC presents a promising area for sustained investment and innovation in healthtech.
Healthtech Subsector Highlights
While various avenues for investment exist within the healthtech sector for 2024 and beyond, two areas stand out for their potential growth: women’s health and geriatric care. Both present opportunities to address unmet needs in healthcare delivery, patient engagement, and care coordination.
Women’s Health Solutions
Women’s health is a surprisingly underserved market, with substantial economic and healthcare potential. The report highlights that closing the women’s health gap could add up to $1 trillion to the global economy annually by 2040. Currently, women’s health accounts for only 4% of total healthcare R&D funding, despite women representing 50% of the global population and often being primary healthcare decision-makers. An alarming statistic is that effective treatment of conditions like premenstrual syndrome (PMS) and menopause alone could contribute approximately $235 billion to the global GDP.
In 2023, venture capital funding in the women’s health sector continued to gain momentum, with startups raising approximately $1.4 billion. Companies like Flo Health (Europe’s first femtech unicorn) raised $200 million, and Maven Clinic reached a $1 billion valuation, signaling the increasing investor interest in this space. Yet, there remains a significant market gap in areas such as hormonal health, menopause care, reproductive health access, and chronic conditions like PCOS and endometriosis call for women-founded solutions for women.
Healthtech software platforms can address these unmet needs by providing comprehensive tools for patient education, care coordination, and remote monitoring tailored specifically to women's health. Companies like Ovia Health and Carrot Fertility have leveraged technology to offer fertility management, pregnancy care, and family planning support, yet the market for innovation is still wide open. In 2023 alone, fertility care accounted for 34% of the total investment in women’s health technology, leaving room for further investment in other areas like menopause management and maternal mental health support.
The integration of women-specific health data into clinical decision-making processes is becoming increasingly important. Nearly 70% of women report that their healthcare providers do not discuss or prioritize menopause care, illustrating the need for solutions that provide actionable insights for both patients and clinicians. Wearable technologies, such as period and fertility trackers, have already demonstrated initial success, with over 60 million active users on apps like Flo, Natural Cycles, and Clue globally. This real-time data collection allows for better management of chronic conditions, personalized treatment plans, and more proactive care.
With the sector projected to grow at a CAGR of 15.6% from 2023 to 2030, both investors and healthtech companies are increasingly looking to capitalize on the shift toward comprehensive, data-driven care models tailored to women’s health needs.
Geriatric Care Management
In the United States, adults aged 85 and older are projected to nearly double from 6.7 million in 2020 to 14.4 million by 2040, while those aged 65 and older will comprise 21% of the total population by 2030. Despite this substantial demographic shift, only 6% of healthcare funding is currently allocated to geriatric-specific care, revealing a considerable gap in the market for technology-driven solutions tailored to elderly patients.
Platforms like ClearCare and CareAcademy are making strides in enhancing home care operations and caregiver training. However, the broader integration of these platforms with healthcare systems and the utilization of data analytics for predictive care insights remain limited. As the need for scalable solutions in geriatric care management, medication adherence, and remote monitoring grows, B2B SaaS platforms have an immense opportunity to improve care coordination, streamline processes, and reduce the burden on healthcare systems.
Good news is that investor interest in geriatric-focused healthtech solutions is on the rise. In 2023, geriatric healthtech companies secured over $2.3 billion in funding, with approximately 30% of recent healthtech funding rounds going toward platforms offering remote monitoring and telemedicine services for seniors. Companies like Honor and Papa raised $370 million and $240 million, respectively, emphasizing the sector's potential for growth. These investments reflect the demand for technologies that can manage chronic conditions, support medication adherence, and improve overall patient outcomes in the aging population.
Integrating AI and predictive analytics can play a pivotal role in transforming geriatric care. AI-powered predictive models assist healthcare providers in identifying potential health risks among elderly patients, enabling early interventions and personalized care plans. Machine learning algorithms further optimize medication management by analyzing patient data to offer tailored recommendations, reducing adverse drug interactions—a common issue for older adults taking multiple medications.
As the global geriatric market is valued at over $1 trillion and is projected to grow at a CAGR of 7.1% from 2023 to 2030, healthtech companies and investors can drive much needed innovation in this space.
Looking Ahead
While the investment landscape has shown resilience, healthtech faces a series of challenges that have shaped the market’s direction in recent years. Market consolidation has become more pronounced, with investors adopting a more cautious approach, especially towards early-stage companies. The rate of new investments dropped by 28% in 2023, and seed and Series A deal sizes shrunk by 56%, from a median of $9 million in 2020 to $5 million in 2023. This contraction reflects a new reality where companies must demonstrate clear paths to profitability, operational excellence, and sustainable growth before attracting sizable funding.
Additionally, insider rounds accounted for nearly half of 2023 financing, indicating that companies are increasingly turning to existing investors to meet revised milestone expectations. This trend suggests that investors are hesitant to commit to new ventures without a proven track record, further tightening the market for fresh entrants. Later-stage companies are not immune to these challenges either–companies like Commure and Monogram Health are now facing the reality of aligning their valuations with market fundamentals, signaling a reset in expectations. The era of sky-high valuations without clear revenue or growth strategies is dwindling, compelling companies to focus on long-term viability and strategic partnerships.
However, despite these hurdles, there is a sense of optimism within the sector. The current challenges are prompting B2B SaaS companies to adapt and refine their models, leading to stronger, more sustainable (and profitable) businesses. The emphasis on demonstrating tangible impacts on patients and reducing healthcare costs is steering companies toward innovation that aligns with market needs. Healthtech firms that can successfully navigate these obstacles are likely to emerge more robust, with scalable solutions that can drive future growth. The tightening of the investment landscape has, in effect, paved the way for a new wave of healthtech companies—those that are better positioned, more focused, and equipped to address the ever-changing demands of the healthcare industry.
About the Author
Dr. Swathi Varanasi, also referred to professionally as Dr. Swathi, blends clinical expertise with market strategy, making her a valuable asset to Laconia Capital’s healthcare investment efforts. With a doctorate in pharmacy (PharmD) and postdoctoral training in personalized medicine and healthtech, she has extensive experience in academia, clinical practice, consulting, research, and medical affairs strategy. Dr. Swathi has worked with various healthtech companies, including those focused on digital health and alternative care models. Her deep understanding of the industry enables her to provide insights into the healthcare VC landscape, particularly in identifying investment opportunities that drive improved patient outcomes
If you want to dive deeper and get a copy of the full report please get in touch directly with Dr. Swathi Varanasi.
Legacy Portfolio Spotlight: LeagueApps
We're thrilled to share that our legacy portfolio company, LeagueApps, has concluded a significant financing round led by Accel-KKR. LeagueApps proves the Laconia B2B investment rule: discover an MVP solving a high pain-point workflow problem combined with great founders who embrace a steady customer-focused go-to-market execution; over time tremendous value gets created with an exciting exit. Congratulations to Brian Litvack and Jeremy Goldberg for a tremendous accomplishment and continued success bringing the company to higher heights alongside Accel-KKR.
The Founders of Laconia first invested in LeagueApps in 2011. We were introduced to Brian and Jeremy as “two really good & smart guys passionate about sports”. They set out to alleviate the pain of managing a recreational sports league. Solutions to that point, if they weren’t paper- or Excel-based, were kludgy at best. This was a huge market waiting to be served.
From Laconia’s perspective, LeagueApps was an early indicator that our B2B investment thesis, the digital workflow transition from manual and legacy software, was also untapped. LeagueApps perfectly lined up with the transition that we were seeing across most industries then and now. Despite the rise in popularity of the B2B investment focus, this transition has not abated. Instead, it is further evolving with the rise of new technologies and AI-enabled platforms.
Still, a market insight is only as good as the people who discover it. Brian and Jeremy showed intelligence, adaptability, keen salesmanship, excellent executive ability, and most importantly patience and honest character. This is not hyperbole: these are always the qualities that bring great companies to fruition in our experience. An idea is only as good as the jockey(s), especially when investing at the seed stage. Seeing our Laconia jockeys cross the finish lines could not be more rewarding!
Founder Spotlight: Sumner and Carla Vanderhoof (Propensity)
Meet Sumner Vanderhoof and Carla Vanderhoof, co-founders of Propensity.
Watch as they share their journey of resilience and innovation, turning setbacks into success.