Olive is a startup that develops AI tools for hospital systems. Olive’s current value is over $1.5 billion after an additional $225.5 million round of financing. The latest funding round for the Columbus, Ohio-based company was led by Tiger Global Management.
Tiger Global is an investment firm based in New York that focuses on the Internet, software, fintech, and consumer sectors. Past investments of Tiger Global have included Peloton, Yandex, Spotify, Facebook, and Flipkart. Existing investors General Catalyst, Drive Capital, and Silicon Valley Bank also participated in the round. They were joined by new investors Dragoneer Investment Group, Alphabet Inc.’s GV, Sequoia Capital Global Equities, and Transformation Capital Partners.
Olive Has Raised $448 Million for AI
Since the company was founded in 2012, it has secured a total of $448 million. Due to the surge in demand stemming from the pandemic, Olive has raised $385 million just in the past nine months. The company intends a significant allocation of its newly raised funds in R&D. Olive seeks to provide hospitals and health systems with more efficient solutions.
Olive’s software is used by over 600 hospitals across the United States. Its AI software strives to make healthcare operations more efficient and affordable by automating administrative workflows. This frees up employees from mundane tasks to allocate their time toward higher-value tasks. Its advanced AI capabilities include rapidly-scaled robotic process automation, computer vision, deep learning, and machine learning. Olive has designed the capabilities specifically for healthcare systems. The company’s slogan is “hire your AI workforce, free your human workforce”.
Data Analysis for Hospitals
Olive offers software tools to assist healthcare departments by automating repetitive, high-volume tasks. These departments include human resources, finance, and supply chain management.. Among Olive’s core software are tools that analyze data for insurance claims and supply chains. Olive expects the transition to an AI-based system for processing insurance claims to reduce administrative errors. It should also lead to faster collection of insurance payments. The company also offers revenue cycle management technology on its platform called Olive Helps. This platform employs AI to work on patient account verification and reducing mistakes in pre-authorization claims.
The company has drawn comparisons to payments software company Stripe in the healthcare category. Venture capital firm General Catalyst, which is also an investor in Stripe, believes that Olive could follow a similar road as Stripe. Hemant Taneja, a partner at General Catalyst, states about Olive: “It is the de facto payments company for healthcare. Healthcare is as big of a category as e-commerce.”
Will AI Result in Human Job Losses?
As with increasing automation in other industries, a concern that inevitably comes up is that AI systems will take away jobs that humans are performing today. Olive addresses this concern by explaining that the healthcare system is currently overloaded with tasks that human workers are simply not getting done. To illustrate a hypothetical example, if there are 100 tasks that the healthcare industry needs to complete, human employees are completing only 50 or so because of the constraints on human employees. Olive’s digital workers are helping to ease the burden on overloaded human workers and taking over the more mundane, repetitive tasks. Thus, everyone benefits from the increased capacity.
Many hospital systems have been suffering huge financial losses as a result of the COVID-19 pandemic. The additional pressure on revenues on hospital operators has made the long-term cost-savings of Olive’s AI automation highly appealing.
Sean Lane, CEO of Olive, remarked about the company’s impact: “For every dollar Olive makes, healthcare saves five. That amounts to pretty incredible cost savings throughout the industry, and it’s helped us become an indispensable part of hospitals’ recovery plan during the pandemic.”
CEO is NSA Alum
Prior to pivoting into healthcare and founding Olive in 2012, Sean Lane developed software for national security. He spent a number of years working at the National Security Agency (NSA). Upon leaving the NSA in 2007, he built a software company for the intelligence community that he sold in 2012. Searching for his next career move, he noticed that opioid drug abuse was emerging as a major problem in his local Ohio community. He also observed the inefficiencies with the healthcare system and realized he could leverage his technology background to provide AI-powered solutions. Soon enough, he began building the framework to create Olive and assembled a business team.
Columbus, Ohio is home to a growing startup tech scene. Auto insurance platform Root Inc. is also based in Columbus. In its October IPO, Root raised $724 million. In CEO Sean Lane’s view, starting the company in Columbus gave them an advantage in hiring top local talent. The company has since expanded hiring beyond Ohio and now has employees dispersed throughout the United States. Top competitors include healthcare-focused AI software providers such as Notable, CloudMedx, and Alpha Health.
The company has set its sights on an IPO in the near future. For now, Olive continues to focus on cementing itself as a leading AI platform for healthcare operations. It has strong momentum going forward, and the pandemic has further highlighted the critical need for effective AI solutions for hospitals and healthcare systems.