In an era where investors are throwing money at anything that mentions 'large language model' while ignoring everything else, healthcare data platform H1 has somehow managed to raise $40 million from CVS Health Ventures. Consider it a small victory for the pre-AI era holdouts.
Ariel Katz, co-founder and CEO of the nine-year-old company, argues that not all SaaS companies deserve the same cold shoulder. 'If you’re a workflow SaaS company, you could vibe code that,' Katz told TechCrunch, suggesting that AI can't easily replicate a company built on being a data provider at its core. It's a self-serving viewpoint - H1's entire business is selling detailed information about doctors to pharma companies, hospital systems, and health insurers - but that doesn't mean he's wrong.
'I don’t worry about Claude ever doing what we do,' Katz said, referring to Anthropic's popular AI model. He thinks the data H1 collects on physicians globally could actually be so valuable to AI model makers that they are more likely to become customers than competitors. A refreshing take from someone not panicking about being automated into oblivion.
CVS Health Ventures must agree that H1 is in no danger of becoming a victim of the 'SaaSocalypse.' The investor just led a $40 million round into the startup, which wasn't even looking to raise capital. H1 turned cash flow and EBITDA profitable last year and is forecasting to grow over 40% this year. But the partnership with one of the largest healthcare companies in the world was apparently too tempting to pass up.
Despite the strong financial fundamentals, companies like H1 aren't exciting for traditional VCs currently consumed with backing AI startups at skyrocketing valuations. H1 was last valued at $750 million when it raised $100 million led by Altimeter Capital at the height of the Covid-era tech bubble in November 2021. Like other companies that secured capital just before valuations plummeted in 2022, H1 has focused on becoming profitable and growing through acquiring smaller competitors. Because sometimes the best way to survive the hype cycle is to just keep doing what you do.