The race is set to build a new generation of healthcare software to replace legacy hospital systems that may not have been updated in decades. A startup from Munich, Germany called Avelios has the ambition to use AI and cloud services to lean towards more modern tools and build a new kind of end-to-end operating system. On Thursday, it announced 30 million euros ($31 million) in Series A funding.
Sequoia leads the round from its London office, where Avelios seed round investors, including high-tech Gründerfonds, Revent and individual investors.
The startup does not disclose ratings, but the round comes just after Averios’ impressive growth. So far, Avelios says it has signed up to 12 customers at its home market in Germany, including Sana Kliniken AG, one of the largest private hospital chains. Hospitals at Ludwig Masimilian University in Munich and hospitals at Hanover School of Medicine.
“I think we were very efficient,” CEO Christian Albrecht told TechCrunch. “We have a really good engineering team and a team of 11 doctors here.”
Albrecht, who co-founded the company with CTO Nicolas Jakob and Chief Medical Officer Sebastian Krammer, said in an interview that he plans to continue developing the system using the plan and work to infiltrate more markets. I mentioned. He is in discussion with Spanish hospital chains and says he is also watching France and the UK.
The Beginning of Covid
Avelios takes an approach based on the world of healthcare systems, built around siloed implementations that serve a particular purpose, and therefore must be specifically integrated to collaborate. We aim for a market (and as a result, it hasn’t worked that well).
But just as health issues could start small before they consume everything, Avelios itself didn’t begin to know the scale and scope of what it would build.
As Albrecht (pictured on the left, along with Jakob and Krammer) explains, Krammer works as a doctor during the Covid-19 pandemic when the creaking nature of the German healthcare system was exposed to him It was there.
“He ran through the hospital, counting almost every time by hand and reporting the results to the authorities,” Albrecht said. After that, Krammer consulted with Jakob. Jakob discussed what he had known before and how to build something to improve his report and gain better insight into emerging trends.
“Nico” [Jakob] I’m a software engineer and a deep learning expert,” he continued. “And they tried. They did some very promising AI research and tried to expand that research, but like many others, in hospital outdated systems, they got AI systems. I quickly discovered that I couldn’t provide the data I needed to do. Work.”
Albrecht was an old friend of Jakob – they were building previous companies together – he brought in to help them organize more ways to build something easy to use. They don’t differ from health issues like they need to fix one thing right away and another.
“We faced a very important decision,” he recalls. “Do you need to treat the ‘symptom’ and build a point solution on top of existing IT systems on top of existing chaos, or actually deal with the root cause of this and build an entirely new hospital information system? ”
They made a big call and he said, “I knew it would be more difficult, but I know it would make us longer, but in this way you’re the root cause of them And in the second step, after that we have detoured, we can integrate the AI solution, so we can all be overlaid with all the flashy AI things. We have set up our own way to do it.”
And, although it took years, Avelios eventually ended up building an end-to-end system for all management: EHR (electronic health records), billing, clinical records and labs The results include patient portals and environments for researchers. People who work in various sectors and institutions to collaborate.
In addition to the Covid-19 wake-up call (in Germany, government funding has been raised to update the system), there are also some of the Avelios conversations and other important changes that helped the transaction. There was. With healthcare providers.
These initials were perhaps the biggest incumbent competitor’s direction change. SAP is one of the largest providers controlling IT market legacy in healthcare (and other industries), and is heading for the transition of $30 billion Enterprise Resource Planning (ERP) businesses to cloud services architectures. I’m progressing. That means it helped to support specific vertical, long-term point-specific solutions, including healthcare, away from the building.
Therefore, more than 1,000 hospitals using SAP’s legacy systems must change their providers during upgrade. (SAP said, among other things, Avelios is recommending it as a migration partner, and Albrecht is working to try to get into pole position in that recommended flow.)
The second is the big push of AI. Like many other industries, healthcare is not just directed towards AI solutions. They also want them. However, they cannot advance effective AI applications without using legacy systems that are useful (structured and interoperable) with state data. That will be another fillip for updates.
Investor’s Attention to Practical Winnings
Sequoia’s attention began with an introduction from one of the seed investors, Revent.
“Avelios has kept this system under radar building for four years,” Anas Biad, a partner at Sequoia, a leading investment in Sequoia, said in an interview. He said he was totally surprised when he started looking only at the number of customers they had picked up, despite being so quiet. “They managed to win some of Germany’s largest private and public hospitals. We were pretty surprised and then ran very quickly.”
Avelios has a big, ambitious swing here, but investors said that many pragmatisms do too. Hospitals usually do not rip the entire system to repeatedly update the entire system. In particular, it is not only necessary to continue operations, but also to the cost.
In fact, this cybersecurity report from 2022 – from the Healthcare Information and Management Systems Association – found that around 73% of hospitals describe the system as “legacy.” (Detached is 35% using Windows Server 2008, 34% using Windows 7, 25% using Legacy Medical Device OS, 21% using Industrial Control System OS (21%) % is included. I’m using XP and Windows Server 2003.
“Some healthcare providers may not necessarily plan to make these operating systems obsolete,” HIMSS wrote in the report. “All assets have a useful life and it is important for the organization to plan the end of life.”
So Avelios’ approach was to modularize things.
“We can land on the modules with our customers,” says Albrecht. He explained that this could mean first providing software to maintain and request documents, to assist with patient portals, or in a different order. “That’s something existing legacy players can’t offer, because they replace one monolithic system with another. And you only have the Big Bang option. And that’s what these projects are like. That’s why so many of them are so badly wrong.”
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