AI Health Boom Accelerates with Function Health Funding

0:00If you've been listening to the show for a while, you know one of the areas I'm the most excited about is AI in healthcare and all of the opportunities we have to make healthcare more affordable and improve the quality of drug discovery. There's so much more. Save doctors a ton of time so they can do what they need to and, of course, spend more time with their family. AI enables so much in healthcare, and I'm really excited about that. So today on the show, I'm talking about a company called Function Health that has just raised$298 million. This is their Series B that they're doing, and they have a$2.5 billion valuation.

0:36So a ton of money, a massive valuation. Today on the podcast, I want to break down what Function Health is doing, who's putting money into them, why they're different than other players we've seen, and some of the things I am the most excited about in AI and healthcare. So let's get into all of that. Before we do, I'd love for you to try out my startup AIbox.ai if you want to get access to all of the top AI models I talk about on the show without having to go and get subscriptions to 100 different platforms. AIbox lets you get the top 40 different models, Google Gemini, Anthropics Cloud, OpenAI, Grok, things from NVIDIA, tons of cool image generators, 11 labs for audio, over 40 models in one place.

1:15You can chat with them all in the same thread, compare the responses side by side, and never have to go get another subscription ever again. So it's all on AIbox.ai. I'll leave a link in the description to go and check that out. All right, let's get into the podcast. Today in healthcare, a ton of data is constantly being generated. We have wearable devices like our Apple Watch that is tracking a ton of different biometric data points. We have electronic health records. We have blood tests that are coming out that a lot of people are doing. Some of these things you can order online, do it yourself, get a ton of interesting information, allergy tests.

1:48There's so much of this health information that is out there in health data, but right now the amount of information is not actually, all of this information is not actually being used in a meaningful way that is helping you improve your health. You may take a test, you might get a result for one specific thing, but there is a lot more that we could be doing. So that's what Function Health is working on. They have a regular lab testing service that's going to help people track their health and they want to be able to essentially help you consolidate health data and make it usable for a lot of different things.

2:20They're going to feed it to an AI model and you're going to be able to get a lot of information from it. So with all of that being said, the company recently raised$298 million in their series B. This round was led by Redpoint Ventures and like I mentioned in the beginning, it's a$2.5 billion valuation. So this is not a small company. They have grown a ton. They also had a lot of big players like A16Z, Anglais Ventures, Alumni Ventures, NBA athlete Alan Crabb, Blake Griffin, Taylor Griffin, a bunch of big players. Daniel Gross's investment firm and the Roku founder, Anthony Wood, Nat Friedman, all of them are in there.

2:56So total, they have raised$350 million. This company is well-funded and they're taking on an ambitious an ambitious era. I think a lot of people when they think of like technology and healthcare, they think of Theranos and the big scam where you do this kind of small blood test. You prick your thumb and it was supposed to give you like 100 different blood tests. And of course, it ended up not being able to actually do that. And so I think a lot of people are skeptical of tech and healthcare and blood test kind of companies. But this seems to be a new angle and a new company that is doing something really interesting.

3:31With all of the funding that they've just raised, they unveiled something new, which is called Medical Intelligence Lab. Basically, this is them trying to build a medical intelligence generative AI model. And it's going to be used to provide personalized health insights based on your data, right? So all of the data that you have coming from your Apple Watch and all of your other different health trackers, they said that it is trained by doctors, which is something unique about this model they've made. And for its customers, they are going to be offering an AI chatbot that can answer any questions based on your health data, and it can tap into any of your previous lab results, any of your previous doctor's notes.

4:09It's going to scan and provide a bunch of tailored assistance to you so you can sit there and ask questions about your health. It's interesting because just last night I was chatting with ChatGPT. I had a terrible stomach ache after eating Olive Garden. Maybe it wasn't Olive Garden's fault. I don't know. I won't point I was like, how do I make like homemade Tums? Like, I don't know, whatever. So I had this like whole medical conversation with ChatGPD. And obviously it wasn't something that was incredibly critical, but you can imagine people have these conversations all the time about all sorts of things, varying degrees of importance.

4:44And think of how amazing it would be if beyond just talking to ChatGPD in a general sense, there was an AI model that literally knew all of your health metrics. It could see what, you know, your heart rate was. It could see everything live and everything historic that you had and it would give you way more tailored results. So this is kind of what they're building. This is what their CEO, Jonathan Swirlin said about it. He said, it's not good enough to be in a world where AI exists and not be applying it to your health. He said, you should be able to manage your biology. The objective of function health is to apply the best available technology to human health.

5:19He also went on to say that their platform is HIPAA compliant, which is important. It fully encrypts your data. It never sells your personal information. He said, your data and your identity are never for sale. Every bit of your information is fully encrypted and protected. We are committed to keeping you and your data safe. This is another thing that I think is probably one of the biggest oppositions or obstacles that they will have as they're trying to roll this out. People are afraid that if you give your health information to a company, it could leak it. And if I'm being 100 % honest, even if they're like, well, it's encrypted and it's HIPAA compliant and all this kind of stuff.

5:52I think a lot of people have a bad taste in their mouth left over from companies like 23andMe, different companies that take your DNA test and have had data leaks where basically all of your DNA information was leaked or they go bankrupt or they get acquired by shady Chinese companies who now have your data. There's a lot that has happened in the health space. And so I think there's a lot of areas where people are quite skeptical. And so they have a lot of barriers to overcome. It seems like they're doing quite well, but I think this is one of the reasons why you need to be so well-funded in this space.

6:25Their chief medical scientist is Dr. Dan Sotikinson, and he is a co-founder, chief medical officer. There's also Dr. Mark Hyman, and they're both working together to kind of lead the development of MI labs. And they have a whole team of doctors, of researchers, of engineers. And their model that they've built is trained by all those doctors, like I mentioned before, which I think is really important. they really highlight the fact that the doctors are staying very involved in the process of training this data. I think in today's day and age when ChatGPT is an amazing general purpose AI model, if you have access to unique data sets and you have access to unique talent like doctors, that's a really good barrier to entry and a really good moat to be able to create a product that other people can't copy.

7:10So obviously there's a bunch of other players in the space, but Function is trying to be different from all the other competitors. There's Superpower, there's Nico Help, there's InsideTracker. And the thing that Function's doing and they're trying to be a little bit different is they're doing what they're saying is a device agnostic approach. Essentially that they're adding their platform integration, lab testing, their diagnostics, their clinical insights, and all of that so that you can have all of these different platforms and bring the data in just to one place. So it's not like it's, you know, you have to have their one specific piece of hardware in order to track all of your information.

7:47You can get it from other places. And because of this, the information it's going to give you is a lot more than you're going to get from a typical AI coach or a wellness app. And I will say that you can also get lab tests down at over 2000 quest locations. And apparently they've made, they've completed more than 50 million lab tests since 2023, which is really impressive. So people have been gathering a ton of data and this has all helped them with their AI model training, their doctors, and helped them create a product that is really useful for people to actually get a good overview of their health.

8:19Thank you so much for tuning into the podcast today. If you enjoyed the episode and you are interested in everything happening in AI and health and so many other areas, make sure to give us a follow over on YouTube linked in the description. And also make sure to leave us a review wherever you get your podcasts, go check out AI box.ai. I hope you have a fantastic rest of your day.