Abridge
Abridge is on a hot streak. Now, as the healthcare startup competes in the AI talent wars, it’s preparing to go on a shopping spree.
Abridge, which builds AI-powered software to transcribe and summarize patient-doctor conversations, landed a $300 million round in June led by Andreessen Horowitz. It was its second mega-raise in four months; the company had raked in a $250 million round in February.
In 18 months, Abridge has raised $700 million in total and boosted its valuation from $850 million to $5.3 billion.
Abridge CEO and cofounder Dr. Shiv Rao has big plans for all of that capital, he told Business Insider.
“We’ve got a lot of money in the bank, and we want to spend 80% of it just going deeper, and expanding from connecting conversations to clinical notes into claims, clinical decision support, and care management,” he said.
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With 80% of its cash reserved for doubling down on its tech, Abridge is earmarking the remaining 20% for potential acquisitions, Rao said.
Those deals are looking increasingly critical in the brutal, competitive landscape of ambient healthcare scribes. Perhaps the most gutting release is set to come from Epic, the electronic health record giant that first partnered with Abridge back in 2023 in a watershed moment for the startup. Epic is now gearing up to launch an AI scribe of its own, Politico reported this month. Abridge declined to comment on the reports. Epic didn’t respond to requests for comment.
Epic’s launch would follow healthcare startup Ambience, Abridge’s biggest direct competitor, raising its own mega-round this summer. Ambience’s $250 million Series C was co-led by Oak HC/FT and A16z, a longtime investor in Ambience that appears to be double-dipping in AI scribing with its growth investment in Abridge.
And, as Abridge works to expand beyond scribing to use AI for tasks like processing medical bills, it’s running up against private equity firms like New Mountain Capital pouring billions into their healthcare AI plays.
Abridge has remained a frontrunner as the pressure builds. It’s now working with over 150 large health systems, Rao said. The startup is also partnering closely with some of those health systems on its new products — Abridge said Tuesday it’s collaborating with Pittsburgh health system Highmark Health on tech to automate prior authorization requests.
And Abridge is focusing squarely on the patient-provider conversation as the starting point for each of its new tools or acquisition targets, Rao said.
“The last thing we want to do is to become a company that’s opening up a trench coat and selling you random things that have no coherence to our mission,” he said. “But if there are things that are absolutely on our road map, it would be smart for us to have open ears.”
Eyeing fresh talent and tech
As San Francisco-based Abridge has landed fundraise after fundraise, many startups hoping to get acquired by Abridge have entered Rao’s inbox.
While Rao said Abridge isn’t “in talks” with any particular company, it’s prepared to notch deals to grow faster. The startup hasn’t made any acquisitions since its 2018 founding.
“It feels like a lot of companies are asking if they can join us in some way. We need to be able to spend on things like that — data plays, ecosystem plays, and partnerships,” Rao said.
Acquiring top talent is Abridge’s biggest priority, Rao said, adding that the startup has been competing with AI giants like OpenAI and Anthropic in its recent hiring efforts.
The AI talent wars are raising the stakes for startups like Abridge. As Big Tech companies fight over top AI researchers, including by offering pay packages in the millions or tens of millions, startups are touting their mission-centric approaches to convince engineers to join their teams over tech giants.
Rao thinks Abridge can compete effectively for AI talent by offering hires the rare chance to build tools that matter, tech that actually improves people’s health.
“Finding ways to recruit more world-class talent as fast as possible is really, really important for us,” he said. “If this is the legacy you want to leave, if you want to be a part of a company where every single day you can feel really good that you improved patient care, then we’re going to resonate more than those horizontal technology companies.”
Abridge has about 330 employees, a number Rao is aiming to increase massively, especially in its engineering department, though he says the company won’t rely exclusively on M&A to do that.
Abridge builds its own large-language models that its widening suite of software sits upon. Those models make up its “contextual reasoning engine,” which automates clinical notetaking that can combine ambient scribing with relevant context from the patient’s existing health records and generate actionable outputs like medical orders and suggested billing codes. Rao said Abridge is considering buying data where necessary to continue training its models.
With a combination build-and-buy strategy, Abridge is moving further into revenue cycle management, the hottest ticket item in healthcare AI, since it aims to help health systems capture more revenue while saving time for doctors. Rao said Abridge is also working on areas like risk adjustment, the process of estimating a patient’s expected medical costs, that is critical for value-based care arrangements, and care coordination.
Abridge wants to dig deeper into clinical decision support, too, a field that many healthcare startups have stayed away from, as the tech often walks a thin line to avoid facing FDA regulations. Abridge first stepped into the space in October by partnering with medical insights company UpToDate to surface relevant clinical evidence in Abridge’s generated notes. Rao said he expects Abridge to share more information from the partnership later this year.
As Abridge looks to take over more tasks for doctors, the company is being deliberate about how and when it’ll meet “good friction” like FDA regulation, Rao said.
“As we move into higher-stakes workflows from a patient outcomes perspective, we have to be really, really responsible,” he said. “We try to be as transparent as we possibly can on how our models work and how we evaluate them. We’ll need to continue to be transparent as we get into those new spaces.”
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