Daniel Nadler started OpenEvidence to help physicians sort through a deluge of medical research. Now, he\u2019s raised $210 million at a $3.5 billion valuation.<\/p>\n
For doctors trying to stay abreast of the latest medical breakthroughs, reviewing the latest research is like being shot in the face with a water cannon. A new paper is published every 30 seconds. Trying to comb through it all to come up with a diagnosis or treatment plan that reflects the best current options while seeing 20 patients a day is a near-impossible task.<\/p>\n
\u201cWe talk about the golden age of biotechnology where there are new drugs and better drugs developed all the time. But it is like the dark ages for physicians because of burnout,\u201d Daniel Nadler, cofounder and CEO of OpenEvidence, told Forbes. \u201cThere is this enormous firehose of information they need to stay on top of, and the human brain is limited in its capacity to read millions of studies.\u201d<\/p>\n
Mauricio Candela for Forbes<\/p>\n
So Nadler, 42, a Harvard Ph.D. who sold his previous company for $550 million back in 2018, set out to solve the problem with artificial intelligence. Now, the startup\u2019s proprietary algorithms search millions of peer-reviewed publications, including in top journals like the New England Journal of Medicine and the Journal of the American Medical Association, to help doctors find the best answers fast, with full citations to papers so doctors can read more for themselves. The software is free for verified doctors to use and makes money through advertising\u2013much like Google does.<\/p>\n
\u201cI think OpenEvidence looks like it\u2019s going to be for healthcare what Google was for the Internet,\u201d said Kleiner Perkins billionaire chairman John Doerr, who invested in the company personally as well as through his firm, adding, \u201cIt\u2019s the free-for-physician model that\u2019s the magic here.\u201d<\/p>\n
Since its founding in 2022, Miami-based OpenEvidence has signed up 40% of doctors in the United States, or more than 430,000, and is adding new ones at a current rate of 65,000 per month. Its revenue from advertising is now coming in at an annualized rate estimated at $50 million. That\u2019s not huge, but thanks to the software\u2019s rapid adoption, investors are betting big: OpenEvidence has raised $210 million led by GV (Google\u2019s venture arm) and Kleiner Perkins at a valuation of $3.5 billion, up from $1 billion at its last financing in February, Nadler told Forbes. Other storied VC firms like Coatue, Conviction and Thrive Capital also invested.<\/p>\n
The new investment makes Nadler, who owns roughly 60% of the company, a billionaire, with a net worth that Forbes estimates at $2.3 billion. Cofounder Zack Ziegler, the company\u2019s 30-year-old chief technology officer, owns some 10% of the business, worth about $350 million. Nadler was able to hold on to such a large stake by being its first seed investor, putting in some $10 million of his own money before raising any VC funding.<\/p>\n
\u201cOne of the great things about being a second-time entrepreneur is, I\u2019m not an idiot,\u201d Nadler said. \u201cI think the second thing is going to be bigger than the first so maybe the first $10 million should come from me. That\u2019s by far the smartest financial decision I made in my life\u2026..I wanted to bet on myself.\u201d<\/p>\n
The problem OpenEvidence is addressing is enormous, and one that\u2019s only getting bigger. Medical literature is proliferating at a meteoric rate\u2014doubling in size every five years\u2014as new treatment options like gene therapies are developed and scientists learn more about how different diseases and drugs may interact with each other. Sorting through all of it is a herculean task: some papers are excellent, some are bad and many more are outdated. (With AI being used to publish<\/a> and review<\/a> research papers, the problem has only gotten worse.) Meanwhile, physicians in the United States are increasingly strapped for time, given a growing shortage of medical professionals\u2014creating an opportunity for startups to build technology that can help provide better care and relieve pressure on doctors.<\/p>\n \u201cWhen everyone was scrambling to come out of crypto, I was like, \u2018I am just going to run circles around all of you.\u2019\u201d\n<\/p>\n Daniel Nadler, cofounder and CEO, OpenEvidence<\/p>\n OpenEvidence isn\u2019t the first company to try to make sense of the overload of medical publications; Wolters Kluwer\u2019s UpToDate has been around for decades and has recently been incorporating AI, along with advice from experts, to do the same thing. But it is the first to build software that integrates AI from the start to make it easier for doctors to find answers to pressing clinical questions and to do so far more accurately than ChatGPT.<\/p>\n Doctors now use OpenEvidence on some 8.5 million consultations a month. Because the tool isn\u2019t considered diagnostic, it doesn\u2019t need FDA approval as algorithms used to detect strokes or sepsis in patients do. And since doctors can download it or use it online for free, it can bypass the lengthy and bureaucratic procurement process with hospitals or large group practices. That\u2019s helped the company sign up doctors at an ever-faster clip.<\/p>\n Dr. Susan Wolver, an internist in Richmond, Va., has become a true believer, using OpenEvidence to write prior authorization letters and look up details of drugs. Most dramatically, while she was on a domestic flight recently, an immunocompromised passenger nearly fainted in the bathroom. Wolver turned to OpenEvidence to figure out the patient\u2019s immune-system risks and come up with a treatment plan on the spot.<\/p>\n \u201cI don\u2019t think a day goes by when I don\u2019t use it,\u201d she said.<\/p>\n Nadler grew up in Toronto where his parents were part of the great wave of post-war Eastern European immigrants\u2013his father from Romania and his mother from Poland. \u201cMy grandfather was in Auschwitz and survived,\u201d he said. \u201cAfter the second world war, my grandfather wanted to come to America, and America wasn\u2019t letting people in so they made their way to Canada.\u201d<\/p>\n As a kid, Nadler was competitive to a fault, dabbling in memory games to see whether he could recite more pages of a Hamlet soliloquy than a friend. \u201cI was a total nerd,\u201d he said. A Mensa member, he found school boring, and after getting a bachelor\u2019s degree at the University of Toronto, applied to Harvard for grad school, hoping for a greater challenge. Once there, he got a Ph.D in political economy, writing his thesis on the pricing mechanisms of credit derivatives. He also studied poetry under Pulitzer Prize-winner Jorie Graham, launched an app called Sigmund<\/a> that could be programmed to speak specific words during sleep to influence a user\u2019s dreams and served as a visiting scholar at the Federal Reserve.<\/p>\n Nadler was working on his Ph.D., and making just $23,500 a year as a grad student, when he got the idea for his first company, Kensho. At the Fed, he\u2019d been stunned to learn that its regulators relied on rudimentary Excel spreadsheets to make critical assessments. So he teamed up with programmer Peter Kruskall to build algorithms to make financial analysis as easy as a search on Google. When Kensho launched its text-based chatbot, Warren (as in Buffett) in 2012, artificial intelligence was still the province of academics, not the red hot center of the startup world that it is today. \u201cNo one was talking about AI in 2012. You are talking about 10 years before ChatGPT,\u201d he said.<\/p>\n The idea worked, and when S&P bought Kensho, paying $700 million, including retention bonuses, it became the largest AI deal<\/a> in history. Nadler, who owned 20%, was suddenly rich. \u201cFor second-time founders, that hubris is [often] gone,\u201d said GV general partner Sangeen Zeb. \u201cDaniel still has that hubris.\u201d<\/p>\n In 2021, he teamed up with Ziegler, who was working on a Ph.D. in machine learning at Harvard, but really just wanted to build stuff. The two had a hunch that the AI technology that had helped make traders smarter by finding patterns in large swathes of data could also aid doctors\u2013with even greater impact. Both were also motivated by personal experience. Nadler\u2019s grandfather had died due to a medical error, while Ziegler had watched his brother-in-law, then 22, go through treatment for leukemia. (He\u2019s in remission now.) \u201cIt was really eye-opening to me,\u201d Ziegler said. \u201cThere\u2019s this enormous amount of complexity, but the way doctors are accessing it is literally leafing through a textbook.\u201d<\/p>\n \u201cI think OpenEvidence looks like it\u2019s going to be for healthcare what Google was for the Internet.\u201d\n<\/p>\n John Doerr, chairman, Kleiner Perkins<\/p>\n Venture capitalist Jim Breyer, who had invested in Kensho, spent four hours talking with Nadler about his idea for OpenEvidence and became one of its first outside investors (along with wealthy investor Ken Moelis) in 2022. Breyer, who\u2019d famously backed Mark Zuckerberg in 2005, considers Nadler among a rarified group of founders. \u201cDaniel is an extraordinary entrepreneur,\u201d he said. \u201cThe initial insight of applying AI to medical journals was simply brilliant.\u201d<\/p>\n In early 2023, OpenEvidence joined the Mayo Clinic\u2019s prestigious accelerator for health tech startups. The program allows startups to refine their ideas\u2014and their technology\u2014at the hospital that, as Nadler noted in a 2023 video<\/a> for the program, \u201chas the largest and highest quality dataset in healthcare.\u201d By this point, AI was booming. Nadler\u2019s decade in the field quickly began to pay off. \u201cWhen everyone was scrambling to come out of crypto, I was like, \u2018I am just going to run circles around all of you,\u2019\u201d he said.<\/p>\n Still, this is a tough business and there are questions about whether AI-based search will always give the best answer. Nadler argues that by relying on the \u201cgold standards of medical knowledge,\u201d many of which aren\u2019t available on the open internet beyond abstracts\u2014including JAMA and the New England Journal of Medicine\u00ad\u00ad\u00ad\u2014the startup\u2019s search ranking models are able to extract reliable and relevant information about a rare disease or a drug\u2019s side effects, while keeping hallucinations (AI\u2019s tendency to fabricate facts) at a minimum. \u201cAI is garbage in, garbage out, gold in, gold out,\u201d Nadler said, adding, \u201cNot everything is about coming up with a super nerdy algorithm.\u201d<\/p>\n Dr. Stephen Krieger, a multiple sclerosis specialist at Mount Sinai in New York, heard about OpenEvidence from a resident this past weekend when he was doing rounds in the hospital. He needed to find out what antibiotic to use for a neurological infection in someone allergic to penicillin, something outside his own clinical expertise. Before relying on it, he tested its accuracy by asking OpenEvidence about his own research on MS (and also confirmed its answer with his infectious disease colleagues). Not only did it correctly summarize his research, it properly noted constraints that had yet to be published. “The idea that it offered to tell me the limitations of my own work and I agreed with it I thought was kind of great,\u201d he said.<\/p>\n \u201cOne of the great things about being a second-time entrepreneur is, I\u2019m not an idiot.\u201d\n<\/p>\n Daniel Nadler, cofounder and CEO, OpenEvidence<\/p>\n But Daniel Byrne, a lecturer at Johns Hopkins Bloomberg School of Public Health and author of the book Artificial Intelligence for Improved Patient Outcomes, said it\u2019s not so simple. \u201cWhat I found that most people misunderstand is that up to half the medical literature is wrong,\u201d he said, noting that papers will often be published about scientific debates or clinical studies that may not ultimately pan out. \u201cHaving a reference is a step in the right direction, but it\u2019s just not enough,\u201d Byrne said.<\/p>\n Dr. Travis Zack, OpenEvidence\u2019s medical director, says that while there will be errors from any AI system, there should be far fewer than with doctors making judgment calls for 20 patients a day without easily consulting the available literature. \u201cWhat OpenEvidence does is allow physicians to not have to trust their gut,\u201d he said.<\/p>\n \u201cAI is garbage in, garbage out, gold in, gold out.\u201d\n<\/p>\n Daniel Nadler, cofounder and CEO, OpenEvidence<\/p>\n It also remains to be seen how successful OpenEvidence\u2019s ad model will be. Pharmaceutical companies are big spenders, and now they have an opportunity to get detailed information about their drugs in front of doctors who are likely to use them. Thanks to sponsored answers, the company is able to keep the tool free for doctors, helping attract more clinicians and allowing it to tweak its algorithm (and improve search results) based on their feedback. That creates what Nadler calls a \u201cfantasy flywheel,\u201d in which having more users makes the product better, which draws more users, ad infinitum.<\/p>\n But despite healthcare and pharma ad spending amounting to some $30 billion in 2024, building an ad-based business is unusual in healthtech, where most software is sold on a subscription basis. \u201cPeople hate on advertising,\u201d Nadler said. \u201cI don\u2019t know why\u2014I love advertising.\u201d But even he notes that the company currently has a far greater potential inventory of ads, more than $350 million, than it has sold to date. \u201cGoogle spent time getting people comfortable with the model, and that\u2019s what we are doing.\u201d<\/p>\n Dr. Aneesh Singhal, vice chair of Massachusetts General Hospital\u2019s department of neurology and director of the hospital\u2019s stroke center, downloaded OpenEvidence a year ago, after reading about it in a mass email sent out to the hospital system. Since then he\u2019s noticed the tool gain popularity among his residents and surgeon colleagues. \u201cEverybody seems to be using it,\u201d he said.<\/p>\n He wanted to search for the latest studies on stroke in adults\u2014a daunting task that would otherwise take hours of rummaging through PubMed and online textbooks. The tool proved far better than a generic chatbot like ChatGPT, suggesting follow-up questions to ask about a patient\u2019s medical history and tests that should be conducted, he said. \u201cChatGPT stops short in that it just gives you the direct answer,\u201d Singhal says.<\/p>\n OpenEvidence\u2019s momentum so far has been staggering as it signs up doctors at an ever-faster clip, a key metric that investor Breyer wants to see. \u201cGetting the weekly and monthly updates gives me enormous confidence that Daniel continues to knock it out of the park,\u201d he said.<\/p>\n Now it\u2019s pushing into using so-called reasoning models, which think through a task in steps, a tactic researchers have found makes AI answers better and more robust. This month, the startup launched a new feature called DeepConsult, which uses this technique to connect the dots between different studies and carry out advanced research on a particular topic. \u201cIt allows a physician to essentially have a team of M.D. Ph.D.s that can go off while the physician is doing other things and do that enormously deep amount of research,\u201d cofounder Ziegler said.<\/p>\n And while OpenEvidence\u2019s tech could be used in a similar way for other scientific fields, Nadler isn\u2019t focused on expansion there yet: he wants to stick to healthcare, both in the U.S. and internationally, especially in countries where access to quality care is limited. Across the industry, there is now a mosaic of AI-powered technology, from notetakers<\/a> for doctors to clinical diagnostic tools. Pair that with a patient\u2019s lab results and data from medical devices like blood glucose monitors, and there\u2019s an opportunity to bring all of that information together, in one place.<\/p>\n Coatue cofounder Thomas Laffont, who is invested in OpenEvidence, sees the startup someday becoming the hub where all these tools might converge. \u201cYou can squint to a world where OpenEvidence becomes the tool through which all that diagnosis is happening,\u201d he said.<\/p>\n \nMore from ForbesForbesThis Startup Built A Hospital In India To Test Its AI SoftwareBy Amy Feldman<\/a>ForbesCoders Worry The AI From This $2 Billion Startup Could Replace Their JobsBy Rashi Shrivastava<\/a>ForbesElon Musk\u2019s Robotaxi Dream Could Be A Liability Nightmare For Tesla And Its OwnersBy Alan Ohnsman<\/a>ForbesMeet India\u2019s Self-Made Biologics Brewmaster BillionaireBy Amy Feldman<\/a>ForbesThis Secretive Company Built An Empire By Hawking Bad Financial And Health Advice On FacebookBy Emily Baker-White<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"Daniel Nadler started OpenEvidence to help physicians sort through a deluge of medical research. Now, he\u2019s raised $210…\n","protected":false},"author":2,"featured_media":9421,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[554,5899,733,4308,1921,5895,844,5896,5897,5898,5894,86,56,5232,54,55],"class_list":{"0":"post-9420","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-artificial-intelligence","8":"tag-ai","9":"tag-ai-statups","10":"tag-artificial-intelligence","11":"tag-artificialintelligence","12":"tag-chatgpt","13":"tag-daniel-nadler","14":"tag-google","15":"tag-john-doerr","16":"tag-kleiner-perkins","17":"tag-medical-research","18":"tag-openevidence","19":"tag-technology","20":"tag-uk","21":"tag-unicorns","22":"tag-united-kingdom","23":"tag-unitedkingdom"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/9420","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=9420"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/9420\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/9421"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=9420"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=9420"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=9420"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}