(Bloomberg) — Abridge AI Inc., a startup that uses artificial intelligence to transcribe medical conversations, is raising $300 million in a new funding round led by Andreessen Horowitz, according to people familiar with the matter.
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The round values the Pittsburgh-based company at $5.3 billion, including the investment, the people said, asking not to be identified because the information is private.
The investment will nearly double Abridge’s valuation from only a few months ago, and underscores the tech industry’s interest in AI software that can make industries like health care more efficient. In February, the company announced it raised $250 million at a $2.75 billion valuation. Khosla Ventures is also participating in the new financing, the people said.
A spokesperson for Abridge declined to comment. Representatives for Andreessen Horowitz did not respond to requests for comment. The Information earlier reported some details of the round.
Abridge Chief Executive Officer Shiv Rao, a cardiologist-turned-founder, said earlier this year that part of his motivation to start the company was that his handwritten notes from patient meetings were often illegible. The inefficiency also made billing and summarizing patient interactions a nightmare.
“You end up feeling bad about yourself,” Rao told Bloomberg in an interview in February. “Everybody ends up losing. What’s been a game-changer is that, with Abridge, you just walk in the room, have the conversation, and you’re present, making eye contact.”
Investors have poured capital into AI startups since the advent of ChatGPT. Just last week, database technology startup ClickHouse Inc. nearly tripled its valuation to $6.35 billion in a funding round led by Khosla Ventures.
Founded in 2018, the company initially struggled. Rao faced a wave of skepticism from his health care peers and doubts about the efficacy of AI tools. At one point, Rao feared the company’s “heartbeat was getting more and more faint.” Then came ChatGPT, and the rapid progress in the capabilities of generative AI tools, and Abridge became “an overnight success, six or seven years in the making,” he said.
Since then, the startup has raised more than $400 million in venture capital funding, as investors race to back application-layer AI startups that make language models like OpenAI’s more useful for doctors, lawyers, salespeople and other professionals.