Flare Capital Partners

Billions in Play: Healthcare AI’s Race for Market Dominance Much has changed since we last dropped our perspectives in healthcare AI last year. AI isn’t just improving — it’s exploding. Breakthroughs in models, cheaper compute, and easier deployment have pushed adoption to new highs. In healthcare, that means AI has shifted from pilot projects to mission-critical — fast. We decided to run it back, re-crunch the data from our proprietary database of over 4,500 healthcare AI deals from the last decade and overlay fresh survey insights gathered from 30 senior healthcare executives in our network, to share an updated view on where we see the world heading. Check out the key takeaways and read the full report below! 1️⃣ Budgets are shifting aggressively: More than 50% of healthcare executives now devote over 10% of their IT budgets to AI, with hospital leaders leading the way—some allocating 25%+. Importantly, 83% plan to increase AI spend in the next 12 months. 2️⃣ AI funding is dominating healthcare deals: In the first half of 2025, 58% of all healthcare venture deals were AI-related, the highest on record—signaling that AI is no longer hype but a sustained investment theme. 3️⃣ Multi-billion-dollar outcomes are reshaping healthcare AI: At least 10 healthcare AI companies surpassed $1B valuations in the last year, with 5 multi-billion-dollar exits already announced in 2025—a magnitude shift from the historical $100M+ “successful” exit benchmark in digital health. 4️⃣ Category leaders are growing at breakneck speed: Top healthcare AI startups are achieving 5x+ year-over-year growth and crossing $100M ARR in just three years, outpacing even the fastest SaaS benchmarks and commanding >5x valuation premiums over peers. Many product roadmaps are on a collision course, though distribution moats and financial fluidity are distinguishing the best-positioned. 📰 Read the full in-depth report here: https://lnkd.in/evQF2sKt P.S. Thank you Mario Aguilar for helping share the story this morning in the STAT Health Tech newsletter! cc: Parth Desai

Today, we are thrilled to announce our investment in Cascala Health's $8.6 million Seed funding round as the company delivers a clinically responsible AI intelligence layer for care teams and post-acute care operators. We are excited to be joined by investors Eniac Ventures, Omega Healthcare Investors, Ziegler Link•age Funds, Tau Ventures, Digital Health Venture Partners, and Redesign Health. Care transitions from hospital to home, between specialists, or across post-acute settings, remain one of the most fragmented and risk-prone moments in the patient journey. In the U.S., 30-day hospital readmissions cost the healthcare system billions annually, while incomplete handoffs and siloed clinical data place patients at unnecessary risk and create duplicative work for providers. This has been a persistent problem in healthcare for decades, and a clear use case for AI. Cascala’s platform addresses these challenges with a clinically informed knowledge stack powering large language models (LLMs) to produce enhanced discharge summaries, dynamic risk scores, and condition-specific care plans. Its early product offerings include Clarity™ for AI-driven data curation, Continuity™ for longitudinal patient views, and Copilot for automated in-workflow activation. This marks the third time we’ve partnered with CEO and Co-Founder, Matt A. Murphy. Matt previously served in key leadership roles at Circulation and Cohere Health (both Flare portfolio companies) where he proved himself as a thoughtful operator with a deep understanding of care delivery workflows. He is joined by CTO Himanshu Chaudhary (former Chief Architect at Wondr Health and CFO of eMindful) and Chief Medical Officer Joseph Jasser (healthcare veteran and executive from Cigna, Dignity Health, Humana and Signify Health), along with a talented team of advisors from across the healthcare continuum. 💫 Read more on "Why We Invested" here: https://lnkd.in/eFa8i2_A 📰 Endpoints News coverage here: https://lnkd.in/gT6Pbww8 Thank you Ngai Yeung for helping us tell the Cascala Health story! cc: Victor Lanio and Tara Sullivan

Flare Scholar Spotlight #89: Kayla Hergott Heiny, MBA Candidate, The Tuck School of Business at Dartmouth '26   Kayla holds a BS in Biomedical Engineering and an MS in Engineering Management. Before pursuing her MBA, she worked in orthopedic medical devices as an engineer and project manager at Stryker and NuVasive. She aims to join a medtech startup focused on women’s health upon graduation.   🏥 What is one area of healthcare you are excited about?   "I am excited about women's health innovation—closing care gaps, improving diagnostics, and building solutions designed specifically for women’s needs."   🌟 What is one fun fact about yourself?   "I have hiked 48 of the 63 US National Parks!"

Today, we are thrilled to announce our investment in Isaac Health’s $10.5 million Series A as the company develops a category‑leading, end‑to‑end virtual neurology platform. We are excited to be joined by investors Meridian Street Capital, B Capital , Industry Ventures, Primetime Partners, and Black Opal Ventures. Neurological disease is a leading cause of illness and disability worldwide, with Alzheimer’s and related dementias costing the U.S. an estimated $780B annually — a figure set to rise as the baby-boomer generation ages. Yet more than nine in ten cases of mild cognitive impairment go undiagnosed, and 20+ states face “dementia neurology deserts.” The result: missed windows for disease-modifying therapies and clinical trials, and unsustainable burdens on caregivers. While policy and payment changes (GUIDE, HCC V28) are creating tailwinds to address these gaps, the need remains urgent — paving the way for neurologist-led virtual platforms that expand access to timely diagnosis, evidence-based care, and research. Behind this neurology platform is a robust group of world-class clinical and operational expertise from institutions including the University of Cambridge, NYU Langone Health, McKinsey & Company, and Mass General Brigham. Co‑Founder and CEO Julius Bruch, MD PhD, earned his doctorate in neurodegeneration and is a Cambridge‑trained physician. CMO Joel Salinas, MD, MBA, MSc, FAAN, is a behavioral neurologist at NYU Langone Health’s Memory Center, a renowned clinician‑scientist, former Clinical Director at Mass General’s McCance Center for Brain Health, and a revered author who has contributed to eight books on neurology. 💫 Read more on "Why We Invested" here: https://lnkd.in/ey6js3xu 📰 Axios coverage here: https://lnkd.in/eQQtrXUf Thank you Brock E.W. Turner for helping us tell the Isaac Health story! cc: Ian Chiang and Jonathon George

We’re proud to congratulate Positive Development on their incredible milestone — closing a $51.5M Series C to accelerate the growth of their innovative developmental therapy model for autistic children and their families. At Flare Capital Partners, we believe in backing visionary teams who are transforming healthcare technology. Positive Development is uniquely positioned to disrupt the autism care market by delivering high-quality, accessible, and affordable developmental therapy at scale — a need recognized by families, payers, and providers alike. We’re excited to co-lead this round alongside our partners at aMoon Fund and B Capital , and we look forward to supporting Positive Development as they expand their reach and continue making a lasting impact for families across the U.S. cc: Dan Gebremedhin MD, MBA

Flare Scholar Spotlight #88: Janet Yim, MBA Candidate, The University of Chicago Booth School of Business '26   With an MPH from the Yale School of Public Health, Janet started her career in provider-side strategy consulting at Sg2. During the pandemic, joined Oak Street Health, where she spent 4.5 years building, scaling, and managing population health programs and new care models in partnership with CVS Health and Aetna. Now at Booth, Janet focuses on leveraging private capital to unlock access to high quality care.   🏥 What is one area of healthcare you are excited about?   "Interdisciplinary care coordination! With so many spot solutions, I want to figure out how they intersect with one another to ensure no one falls through the cracks."   🌟 What is one fun fact about yourself?   "I started learning how to golf in the fall! My dad and I have a language barrier, so I wanted to take up golfing to have a shared activity so we could bond. I’m a co-chair of our Booth Golf Club to make golf more accessible to beginners like me!"

Reflecting on a productive and energizing few days on the West Coast where we hosted key executives from our healthcare and technology partners at NVIDIA to understand the state of healthcare AI and grapple with what the future holds. Sharing a few key takeaways from our discussions: 1️⃣ Adoption hinges on behavior, not just technology Even with well-designed tools, clinician adoption remains inconsistent. We emphasized the need for structured change management strategies —including workforce transformation and clear usage metrics — to drive meaningful uptake. 2️⃣ Shift toward configurable AI platforms There is growing interest in orchestration layers that empower end users to compose AI-driven workflows without major system rebuilds, particularly within Epic environments. 3️⃣ ROI is clear in admin, emerging in clinical While most organizations can demonstrate financial returns in administrative functions, clinical ROI remains harder to quantify. 4️⃣ Balancing build-vs-buy in an Epic-centric world Startups offer faster innovation, but integration with Epic continues to shape enterprise decisions. There is a shared need for evaluation criteria that stress-test vendor resilience and interoperability. We capped the day with hosting a dinner with a powerhouse group of friends from Anthropic, Microsoft, Amazon Web Services (AWS), Apple, Google, Amgen, AdventHealth, Hartford HealthCare, Memorial Hermann Health System, and more. Thank you to everyone who made this week so special! Aashima Gupta, Abhinav Shashank, Aparna Chennapragada, Lily Peng, Deepika Bodapati, Vinay Rao, Sean Bruich, Barry Stein, MD, MBA, FSIR, FACR, RPVI, Jared Saul, MD, Todd Ponsky, Feby Abraham, Rob Purinton, William Sheahan, Peter Durlach, Chris Donovan, Svetlana Bender Ph.D., Renee Y., Varsha Rao

Looking forward to the inaugural Prax: AI x Healthcare Summit, co-hosted by Comma Capital and Avon Health.    This summit brings together the people building the future of healthcare technology—founders, health system execs, policy leaders, and investors—for two days of unfiltered conversations.    If you’re in NYC on September 10–11, get your ticket at www.praxsummit.com

From Boston to Santa Clara! The Flare Capital Partners team and key executives from our healthcare partners had the incredible opportunity to visit our partner NVIDIA’s global headquarters this week, where we spent meaningful time with leaders from their Healthcare and Life Sciences team to discuss the art of the possible in our shared sector of healthcare AI. We left inspired by the pace of innovation, their commitment to transforming healthcare, and the shared belief that AI is rapidly reshaping the future of health, even in ways we haven't yet imagined. A huge thank you to our wonderful NVIDIA hosts and presenters who made this possible - Renee Y., Mat Torgow, Dawn Voss, Brad Genereaux, FSIIM, Trent Norris, Howard Wright, Lyndi Wu, Kimberly Powell! This partnership and work is just the beginning...stay tuned for something special we’ll be announcing next week 👀

Flare Scholar Spotlight #87: Katherine Hall-Paulk, National VBC Partnerships Senior Manager, Aetna, a CVS Health Company   Katie is a National VBC Partnerships Senior Manager at Aetna, a CVS Health company, one of the nation’s leading diversified health care benefits companies. As part of Aetna’s National VBC Partnerships team, she selects, negotiates, and implements value-based care (VBC) contracts with national specialty provider partners. Prior to joining Aetna, Katie was a Network Manager and Contractor at Cigna in Birmingham, AL for 6 years. During her time at Cigna, she was responsible for managing and contracting within their Medicare division supporting IPAs, independent providers, facilities, and value-based partnerships across the southeast market. Katie received her BA from The University of Alabama and MBA from University of North Alabama.    🏥 What is one area of healthcare you are excited about?   "I'm excited about the growth and evolution of value-based care models, particularly around the longitudinal and wholistic treatment of both the patient's physical and mental health. There is an immense opportunity to continue the alignment of incentives for payors and providers around quality outcomes for patients across all specialties and lines of business especially within the behavioral health landscape."   🌟 What is one fun fact about yourself?   "In my free time, I enjoy hiking with my Husband (Josh) and our 3 dogs (Finn, Rika, and Reeses)."