Healthcare Startups Are Raking in Cash… and the Trend Is Just Starting

On their own, trends like artificial intelligence (AI), blockchain, and quantum computing are going to create millions of millionaires. All are great investments.

a doctor looks at a tablet

Source: Shutterstock

However, it’s the combination of all these trends in order to radically improve healthcare that will really disrupt our world.

Earlier this month, I explained how the combination of AI and quantum computing would be game changers for healthcare.

“When you combine the power of AI with the speed of quantum computing, the possibilities are endless.

“The future is very, very bright.

“For investors who can see past all the short-term noise, we are on the cusp of a period of massive technological disruption.

“Changes will be happening faster and with greater magnitude than humanity has ever seen.”

That may have sounded a little too sensational. Maybe you think it’s an exaggeration.

It’s not. With the right private investments, it could mean unimaginable returns. I need you to pay attention to this.

There are thousands of tiny earthquakes rattling the world of biotech…

These tremors are breakthroughs in various digital technologies, combined with revolutionary discoveries and the audacious dreams of brilliant entrepreneurs…

Much of this will culminate in a volcanic eruption of biotech breakthroughs.

Here’s what I’m talking about…

Longer Healthspans Mean Big Changes

Sooner than you believe, humans are going to be living healthier, more productive, and much longer lives.

This will massively disrupt everything from the insurance industry to retirement plans… it will impact everything that we have planned for the future.

I’m talking about humans living well and contributing to the global economy past 100 years old.

These healthcare breakthroughs won’t just extend lifespan (how long a person lives). They’ll also extend healthspan (how long a person maintains physical, emotional and cognitive abilities).

How will your life plans change when you discover that you’re going to live another 50 years? How will you afford extended lifespan and healthspan? What new costs and obligations will you have? How will service providers change their policies? Will the 30-year home loan go away?

There are thousands of questions like these!

Of course, this isn’t going to happen overnight. There will be many failures and challenges along the way…

Still, I believe that all this will happen much faster than any of us expect.

Getting a Boost From Big-Name Private Money

You don’t have to take my word for it. Just look at what is going on in the world of healthcare right now.

Massive amounts of private capital are flowing into cutting-edge healthcare startups.

This past week, Odyssey Therapeutics announced a $218 million Series A funding round. The Boston-based biotech firm “is creating next-generation precision medicines for patients with inflammatory diseases and cancer through our highly integrated drug hunting engine.”

Although Odyssey has not disclosed its current valuation, the company is likely to obtain unicorn status very soon (if it hasn’t already).

This would place the value of the company at over $1 billion, even though it was only founded this year!

Early investors in Odyssey could be positioned for enormous gains.

In the mental health care field, Cerebral just announced a monster Series C funding round of $300 million led by none other than… SoftBank Group (OTCMKTS:SFTBY).

Cerebral was launched less than two years ago, has raised a total of $462 million, and now has a valuation of close to $5 billion.

Mental healthcare stigma is quickly eroding as companies like Cerebral apply tech to quantify mental health. Further, celebrities like Olympic gymnast Simone Biles (who is the chief impact officer at Cerebral) are advocating for mental health challenges to be normalized and addressed just like any other disease.

Early investors in Cerebral, who made their investment only two years ago, could soon be sitting on massive returns. At the time of its last funding round, in June 2021, Cerebral had a valuation of $1.2 billion.

That means, in just six months, the San Francisco-based company has quadrupled in value (up 300%!).

Cerebral’s services are now reimbursable by flexible spending accounts (FSA) and health spending accounts (HSA), and company executives expect they’ll be covered by traditional health insurance by 2023.

Early investors include hedge fund legend Bill Ackman and billionaire Len Blavatnik. (See what I mean about the wealthiest people focusing on early-stage private investments!?)

Freenome, a private startup that uses molecular biology and machine learning to detect cancer, just raised a $300 million Series D round. That brings the company’s total funding to over $800 million, with an estimated valuation of over $10 billion.

Investors in this round include institutional heavyweights Kaiser Permanente, Bain Capital, and Andreessen Horowitz. Remember what I said in November about that last investor?

“Andreessen Horowitz — also known as ‘a16z’ for the number of letters between the ‘a’ in ‘Andreessen’ and the ‘z’ in ‘Horowitz’… is raising money for a new fund — and expects to bring in up to $1.5 billion.

“The focus? Healthcare and biotech…

“To be clear, we’re not talking traditional healthcare investments.

“Instead, a16z and other major VC firms are targeting cutting-edge companies that challenge the traditional ways we care for our bodies.”

That’s right, a16z is aiming directly at this under-the-radar biotech trend. The legendary VC firm seems to have a stake in nearly every top healthcare company that enters the unicorn club.

One last thing that I want to leave you with.

It’s the next trend that I am the most excited about. I believe that investing in this industry will easily be the best opportunity of our lifetimes. It combines the biotech breakthroughs in this article with another great tech trend…

An announcement came out over the weekend that further solidifies my opinion, and I believe it will convince you as well. I’ll tell you about it later this week…

Talk to you Thursday!

On the date of publication, Cody Shirk did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

By focusing on megatrends that will shape the future, Cody Shirk uncovers generational wealth in the private investing space. To make sure you never miss Venture Capital Digest, click here to subscribe.

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