Investors just poured more than $1 billion into startups using AI to tackle every part of healthcare. Here are the 5 healthcare AI startups raking in the most cash.

Clarrie Feinstein

Nov 11, 2019, 21:44 IST

Investors just poured more than $1 billion into startups using AI to tackle every part of healthcare. Here are the 5 healthcare AI startups raking in the most cash.

Jack Lewis Williams for Tailor Made London

Dr. Ali Parsa, the CEO of Babylon Health.

The deal count for VC backed healthcare deals is on pace to reach an all-time high, according to the latest third quarter report from CB Insights.
Investments in AI companies has grown exponentially in the healthcare space. In just the third quarter healthcare AI companies raised almost $1.6 billion across 103 deals, CB Insights reports.
In 2019, the top 5 healthcare AI company deals reached a total of $1.1 billion in funding.
The companies include the early cancer detection company Freenome, which raised $160 million, and the virtual care and diagnostics platform Babylon Health, which raised $550 million.
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Investors just poured a record sum of cash into startups looking to use artificial intelligence (AI) to change healthcare.

In the third quarter, healthcare AI companies raised almost $1.6 billion across 103 deals, according to a new report from CB Insights. That's a record sum, and an increase from the $749 million healthcare AI startups took in a year ago.

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2019 is looking like a good year for venture-capital-backed healthcare deals overall. Global deal count is on pace to reach an all-time high, according to the CB Insights report. And in total, healthcare companies have raised over $37.5 billion so far this year, the report says.

Courtesy of CB Insights.

VC-backed deals and financing to healthcare AI startups, Q1'18 - Q3'19

Victor Adeleke, an associate analyst at CB Insights, said the reason for the wave of healthcare AI investments is the perception of the need to integrate AI into healthcare systems, particularly in drug discovery, medical imaging, and diagnostics.

Another factor is that healthcare AI may help save costs, he said.

"There's also huge potential for AI to cut costs and drive efficiency across healthcare, and incumbents are looking to startups to help them compete with newer players entering the space," Adeleke told Business Insider via email.

Adeleke noted that the increased investment has coincided with more partnerships between pharmaceutical companies and AI startups.

The drug discovery company, BenevolentAI, which is on the list of top 5 healthcare AI deals this year, raised $90 million in equity funding in September, after partnering with AstraZeneca on AI-driven drug discovery in May.

A large part of the success for AI deals this year can be attributed to the newly-minted unicorn Babylon Health, which reached the $2 billion valuation mark with its recent funding round. The company provides virtual care by providing people with remote consultations with doctors and healthcare professionals via text and video messaging.