OpenEvidence Doubles Valuation to $12 Billion
OpenEvidence, an AI startup commonly referred to as “ChatGPT for doctors,” has completed a funding round that has doubled its valuation to an impressive $12 billion, as confirmed by the company.
Based in Miami, Florida, OpenEvidence specializes in training chatbots with data from leading scientific journals. They recently wrapped up a $250 million funding round, primarily led by Thrive Capital and DST. CNBC previously reported on this funding.
The company began its fundraising efforts in February, initially securing $75 million from Sequoia, all at a $1 billion valuation. Just months later, in October, that valuation surged to $6 billion.
Since then, OpenEvidence has raised a total of $700 million from various investors, including Google Ventures and the Mayo Clinic, among others.
Founded in 2022 by Daniel Nadler—a billionaire poet who had sold his previous company, Kensho Technologies, for $700 million—and Zachary Ziegler, a former Harvard PhD student in AI, the startup has shown remarkable growth.
Nadler described OpenEvidence as more than just a ChatGPT-like tool for doctors. “If you take a closer look, you’ll see that it’s a completely different animal,” he noted.
Designed specifically for medical professionals, it’s essentially a free tool for them, yet it’s aimed at providing serious utility. Nadler explained that they have strategic partnerships and focus on specialized medical content like that from the New England Journal of Medicine.
He believes there’s tremendous potential in healthcare, where over 40% of physicians already use the tool. With annual healthcare spending at $5 trillion—nearly 20% of the U.S. GDP—Nadler sees a lot of room for various players to thrive in this market.
Other major companies, such as OpenAI and Anthropic, have also released HIPAA-compliant versions of their chatbots, under names like ChatGPT Health and Claude Healthcare.
According to Nadler, OpenEvidence’s extensive collection of high-quality health data positions it well against competitors.
He points out that the company has amassed hundreds of millions of genuine clinical consultations from certified physicians, creating a feedback loop that’s hard for others to match. “Even if someone wanted to replicate it, they’d still find themselves far behind,” he stated.
Nadler emphasized the importance of fostering partnerships with physicians, indicating that most healthcare activities occur outside major hospitals. “It’s in small practices that may not even have a budget for sophisticated software,” he said.
OpenEvidence generates revenue through advertising, a model that makes it somewhat more agile than competitors like OpenAI, which recently announced plans to test ads on ChatGPT.
Last year, OpenEvidence reportedly made over $100 million in revenue, thanks primarily to organic growth—an impressive 95% of new users came through recommendations from other doctors.
The executive mentions that OpenEvidence aims to maintain discipline in its operations, contrasting with other firms that are “planning to burn billions” in the coming years.
He also expressed a desire to keep OpenEvidence independent, particularly as larger AI companies are making acquisitions. Nadler is waiting for significant players like SpaceX and OpenAI to go public before considering an IPO for his own venture.
“There’s a rhythm to it,” he concluded. “Companies based on foundation models will lead the way to public offerings, and this cycle is likely to unfold similarly.”
