Olive AI Inc. has reached a valuation of $1.5 billion with a $225.5 million venture capital round to take its pandemic-fueled growth into overdrive, the Columbus company announced Tuesday.
The 7-year-old company has raised 86% of its lifetime $448 million VC backing in the nine months since the coronavirus pandemic began. With urgent demand for more efficiency, 600 hospitals including one in five of the nation's largest health systems are now customers of its AI-powered administrative bot.
Healthcare has been the fastest industry to spend more on artificial intelligence during the pandemic, according to a recent survey by consultant McKinsey & Co.
Olive, which has not disclosed its valuation before, is the second Columbus "unicorn" valued at more than $1 billion in the portfolio of Drive Capital LLC. Root Inc., the digital insurer that incubated in the Columbus VC firm's Short North office, was valued at $1.65 billion last year and at $7 billion in its October IPO.
Tiger Global led this latest round, joined by repeat investors Drive, General Catalyst and Silicon Valley Bank, plus new investors GV, Sequoia Capital Global Equities, Dragoneer Investment Group and Transformation Capital Partners.
Along with the funding Olive announced two C-suite hires:
- CFO Ali Byrd, who has nearly 25 years of software industry experience. For the past two years he was jointly CFO of startup CoverWallet and founder and managing partner of VC fund Towerview Ventures, both in New York City, according to his LinkedIn profile.
- Shoshana Deutschkron, chief marketing officer, with more than two decades in tech. Since 2015 she's been vice president of communications and brand at Upwork in the San Francisco Bay area, according to her LinkedIn profile.
"For every dollar Olive makes, health care 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 Sean Lane said in a news release.
More than 600 hospitals, including 22 of the 100 biggest health systems, are customers. Greater Cincinnati is home to one of eight Olive AlphaSites, meaning a health system with an onsite center for AI workforce operations, according to the company's website.
A Southeast Ohio native and former military intelligence officer, Lane moved the company to Columbus from Baltimore in 2013 upon an initial investment by Drive Capital. It had been incorporated in 2012, and co-founder and former President Brad Maschko has since left the company. At first they focused on medical identity theft and using data to resolve errors and duplications in health records.
The company went through several iterations before AI technology enabled development of the bot, which automates repetitive and tedious tasks for hospital administration, such as catching a change in insurance that could lead to a claim being denied.
Olive sold off its legacy CrossChx products and IP in 2018. It legally changed its corporate name this August.
It has grown to more than 400 employees this year, with a nationwide distributed workforce and leadership team centered on Columbus. The VC round will go toward more product development.
The company raised $52 million in March and another $106 million in October.
Lane is not aiming for an acquisition or IPO, he previously said in an interview.
"I’m in this for the long haul, I’m in not in this for an exit," he told Columbus Business First in October. "We just won't bring on investors who are seven-year fund investors.
"We like to bring on investors who have helped build important companies ."
