Healthcare Tech Startups in New York City, Top 20 in 2020
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Manhattan, Image Credit: Pexels

Healthcare has long been one of New York’s key industries. On the one hand, the concentrated wealth means that private care and professional medical expertise are in high demand; on the other hand, the state, with the largest public healthcare system in the US, hosts more than 800 thousand employees, serving 8.5 million people every day. Linked to the USD 80 billion Medicaid program promoted by the federal government, the system covers more than 6 million people in the state. New York’s healthcare expenses tend to increase yearly.

As the election year 2020 approached, however, both the New York healthcare industry and investors became less optimistic. The Medicaid program has a USD 4 billion shortfall, and healthcare expenditure is expected to continue to reduce. The market sentiment can be seen from VC investment data over the past years.

The value of investments soared incredibly in 2018, especially for angel and seed rounds. Immediately after 2018, the number of investments decreased significantly, even as the total value of investments increased slightly. The bar chart above illustrates that, for the whole of 2019, VCs paid much more attention to series A and B investments, showing less optimism for seed startups.

At the beginning of 2020, EqualOcean prepared a list of the 20 most influential startups with headquarters located in New York City. The 20 companies were selected based on industrial effectiveness, financing capacity, management team structure and investor background. Based on data from Crunchbase, the 20 startups raised more than USD 1.5 billion in total and each of the selected companies has raised more than USD 25 million.

Biotech, hot as always

With one of the broadest healthcare markets in terms of demand and resources, and the most developed biopharmaceutical industry, the US northeast is the world’s biotechnology center. Benefited by the continuously fast-paced development of biotech, many notable startups are located in New York. New York biotech startups usually have management teams with a prominent background in the finance industry. With close connections to VCs in Manhattan, these startups have more exposure to the capital market.

A large proportion of the biotech startups on our list focus on cancer treatment. HiberCell is devoted to developing therapies against relapse and metastasis. With support from VCs including ARCH Venture Partners, HiberCell has raised more than USD 60 million funding since its establishment in 2019. At the same time, Zentalis Pharmaceuticals, founded in 2014, targets the development of novel small molecules for fundamental biological pathways in cancer treatment. In December 2019, Zentalis Pharmaceuticals finished a USD 85 million series C. 

Genetic medicine is also a promising industry for most VCs. Several startups in this sub-industry on our list are favored by investors. Neurogene Inc., founded in 2018, which focuses on genetic medicines for rare neurological diseases, received a USD 68.5 million Series A funding in February 2019. This January 2020, Emendo Biotherapeutics, a gene-editing technology startup, raised USD 61 million Series B funding.

Startups play active roles in other sub-industries. Elysium Health provides NAD+ (Nicotinamide adenine dinucleotide) and biological age test products to individual customers. Supported by companies including the Silicon Valley Bank and Bayer Capital, Elysium has raised more than USD 70 million funding. Eight Sleep applies personal biometrics in sleep fitness and offers unique mattress products. Backed by investors including Founders Fund, it has obtained USD 70+ million investment. Attune Pharmaceuticals discovers and develops novel orally-administered small-molecule therapeutics. 

Meanwhile, two noteworthy startups in the women’s health industry appear on our list. Focusing on in vitro fertilization (IVF), TMRW Life Sciences completed an integrated platform for automated, software-guided embryology and cryo-management. It has attracted USD 37 million funding since it was founded in 2018. Kindbody, also established in 2018, provides a series of products centered around fertility care. Supported by Google Venture, it has raised more than USD 31 million.

Rising of DTC Healthcare

DTC (Direct-to-Consumer) healthcare has developed rapidly in recent years. With the uncertainty of federal government healthcare policy and Medicaid funding, DTC companies are playing a more important role now. Compared with traditional pharmacies, DTC healthcare providers offer customers integrated consulting, coordinating and delivering services. Attracted by efficiency and care, users are showing a growing preference for DTC.

The blooming DTC healthcare is supported by venture capitalists in New York. Capsule, which focuses on free one-day delivery pharmacy, received USD 200 million series C funding in September 2019. Five months earlier, in April 2019, Ro, a well-known DTC healthcare startup established in 2017, received USD 85 million series B investment, pushing its total funding to USD 180 million.

DTC services exist in different sub-industries of healthcare. One Drop, with USD 55 million aggregate funding received, developed a series of platforms and hardware devices directly serving diabetics. Committed to convenient and accurate health testing, LetsGetChecked offers an at-home testing service. Founded in 2015, it has attracted more than USD 42 million in funding. OneDrop and LetsGetChecked rely minimally on logistics – consequently, they have expanded their businesses from the US northeast to Canada and Europe.

Parsley Health is a noteworthy startup which focuses on primary care. By integrating the latest technology in medical testing and nutrition research, Parsley Health provides a complete in-person + online care system. 

Empowered by AI and data science, a more diversified healthcare industry is coming in 2020

As the mature application of AI technology takes shape, data-driven SaaS and PaaS startups are becoming popular in the healthcare industry. By integrating data information technology and medical talents, data and online platform companies are more and more vital in connecting caregivers, patients and community. With diversified human resources and wide-ranging application scenarios, the IT + medical startup scene in New York also has bright potential.

By providing platforms standardizing communication and tracking outcomes, Unite Us enables healthcare providers, government and community to collaborate efficiently. In March 2019, Unite Us finished a USD 35 million series B funding.

Talkspace is an online therapy startup. By connecting individual users with licensed therapists, Talkspace offers customers professional and affordable therapy. The business model of Talkspace has attracted large investors, including Softbank.

Rightway Healthcare provides healthcare navigation based on its tech-driven platform. Vesta Healthcare applies cutting-edge technology in connecting caregivers to improve the quality of their service. Both companies were founded in 2017, and each has since received USD 30+ million funding in aggregate funding.

By applying AI technology to its platform, Spring Health creates a network for enterprises and individuals to take care of people’s mental health. CredSimple, as a SaaS provider, offers credential verification services for healthcare organizations.

*Contributor: Linyan Feng
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