K Health. From 0 to 1.5B+ in 2 years..
Author - Yannick Oswald
Two years after launching its product, our company K Health raised $130+ million at a valuation above $1.5B in a funding round led by GGV and Valor.
K is our latest unicorn we backed at the seed stage. It is also a special one. Not only are we convinced that it will be our biggest home run to date, but it is also incredibly aligned with our DNA. Let's have a look.
Solving a global challenge. With a radically different approach.
Our biggest consumer success stories have one thing in common. They solve a massive problem with the help of software that materially impacts billions of people.
K's mission is simple, but incredibly ambitious: Provide FREE primary healthcare to the world. To grasp why this is so important, we need to understand that - there is NO bigger burden on society than healthcare. For many Europeans, who have access to good universal healthcare, this might be not easy to understand. But more than 5 billion people worldwide don’t have access to basic healthcare, which includes near 25% of the US population. Over 7 billion people do not have access to free healthcare.
Telehealth is a great first step. But there are just not enough doctors to make it work for everyone. The current crisis made one thing crystal clear: We have a shortage of medical professionals everywhere. The US alone predict that their shortage could hit 139,000 by 2033. The current healthcare system is just not scalable enough. With this observation in mind, K's founders embraced Buckminster Fuller’s advice:
The solution is 100% software-based, and the result is K: the world’s first accurate and trusted AI-driven medical information layer, infinitely scalable. 'All you need is a smartphone, and you have the collective knowledge of thousands of doctors in your pocket.' By designing a model that does not require 'humans to scale', it offers better healthcare to billions of people and allows doctors to be more efficient and focus on the patients who need their help most.
A massive TAM.
Digital health is one of the sectors that saw the biggest acceleration since the start of the pandemic. And there is no bigger TAM than healthcare. In the US alone, healthcare costs represent 17% of US GDP. More than $3.6T is up for grabs...
Five years ago, we sat down in Luxembourg to discuss which themes to focus on over the next years. Digital health was one of the first topics that came up. Since then, we have backed multiple players in the space.
Why? Besides the challenges mentioned above, healthcare might also be the worst consumer experience of them all. Doctor visits just aren't pleasant. It sometimes takes weeks to get access to a doctor (if you have access at all...), it is expensive, and in return, most get a general feeling that they are lucky someone has decided to see them. Of course, consumers could go online by searching for specific symptoms, but the information is not reliable nor personalized.
K Health is changing all of that. Like Skype or Wix, it is free. There is no better alternative out there, period.
Real tech innovation. The only AI driven, full-stack health system.
K made something simple out of a crazy complex problem. They spent over two years translating 400M medical records from doctor visits of over 2M patients, including diagnostics and treatments, into a smart mobile app. They essentially created the first automated doctor. This translation resulted in a database of 2B individual data points. It required building the first complex medical ontology parsing system based on NLP.
K is 24x7, intelligent, and remote. A chat suggests potential diagnoses for consumers who enter symptoms, taking into account the user's medical history. If you need to, you can chat with a doctor. Doctors can now not only focus on the patients who need their help most but also ensure everyone is continuously cared for.
Tech is a real moat. K's closed-loop model makes the tech dynamic and self-learning. With every treatment, overall healthcare is better off.
A game-changer for patients.
Access to K on your phone is for free for you and your family. For only $9/month, you get unlimited access to doctors, 24x7. You get access to chronic care for only $19/ month. Pediatric care is offered as well. And more is to come.
Compare this to what's out there now. Primary care spend is around $500-700 per year versus free up to $100-200 per year with K. Consumers with one chronic condition (22% of the US population) spend >$1,000 per year versus ~$400-500 year with K.
Real impact drives traction.
Within two years, over 4M people have become K Health users in the US (not taking into account partnerships). The company has generated tens of millions in ARR in 2020, and the team is only getting started.
Key partnerships are accelerating the flywheel.
K not only improves the quality of care for patients, but also for healthcare institutions and insurers. To accelerate the development of its service, K has partnered up with key players.
Partners include Mayo Clinic, one of the best healthcare institutions in the US, Maccabi Healthcare Services, Israel's second-largest HMO with 2.4M members, and Anthem in the US, to offer K Health to its 43M insurance members.
A best-in-class team.
All of this has been achieved by a team of only 250 people, of which 200 are doctors. Let this sink for a moment. Millions of patients are being treated continuously by only 200 doctors...