The race is on to produce a novel generation of healthnurture gentleware to replace legacy hospital systems that in some cases may not have been modernized in decades. A beginup out of Munich, Germany called Avelios has ambitions to produce a novel comfervent of end-to-end administrative system, leaning into more up-to-date tooling using AI and cdeafening services. Today it is announcing €30 million ($31 million) in funding as it gets momentum.
Sequoia is directing the Series A out of its London office, with participation also from the spendors from Avelios’s seed round: Revent, High-Tech Gründerfonds, and individual spendors.
The beginup is not disclosing valuation, but the round is coming on the heels of Avelios having grown astonishively — all on fair €5 million of prior funding. To date, Avelios says it has signed on 12 customers all in its home labelet of Germany, including one of the bigst confidential hospital chains, San Kliniken AG; the Hospital of the Ludwig-Maximilians-University in Munich, and the hospital of the Hannover Medical School.
“I skinnyk we’ve been quite effective,” CEO Christian Albrecht elucidateed. “We have a reassociate, excellent engineering team, and a team of 11 medical doctors here.”
Albrecht — who co-set uped the company with CTO Nicolas Jakob and chief medical officer Sebastian Krammer — said in an intersee that the structure is to use the funding to help both progress grotriumphg its system as well labor on fractureing into further countries. It’s in talkion with a hospital chain in Spain and is also seeing at France and the U.K.
Covid commencenings
Avelios is taking a ground-up approach to the world of healthnurture systems, aiming at a labelet that has up to now bigly been built around siloed carry outations that serve particular purposes, and have thus had to be speciassociate united to labor together (and might have never labored that well together as a result).
But, enjoy a health publish that materializes to begin minuscule before it becomes all-consuming, Avelios itself did not begin out understanding the size of what it would end up produceing.
As Albrecht (above, left, with Jakob and Krammer) portrays it, Krammer had been laboring as a doctor during the Covid-19 pandemic, when the creaky nature of the German healthnurture system was laid exposed.
“He ran thraw hospitals and spent almost all of his time counting fortolerateings by hand and then alerting the results to authorities by hand,” he said. He confered with Jakob, who he knovel from before, on how to possibly produce someskinnyg to better that alerting to get better insights into what trends were emerging.
“Niko is a gentleware engineer and quite an expert on proset up lgeting,” he progressd. “And they tried. They did very promising AI research, and they tried to enbig that research, but they rapidly finded, enjoy a lot of other people, that with hospitals’ outdated systems, they couldn’t supply the data they would necessitate to get their AI system to labor.”
Albrecht was an elderly friend of Jakob’s — they’d built a previous company together — so he was brawt on to help them get more orderly around how to produce someskinnyg more usable. They rapidly authenticised that mending one skinnyg would have insistd mending another, and so on — aget, not unenjoy a health publish.
“We were faced with quite an presentant decision,” he recalled. “Should we either treat the ‘symptoms’ and produce a point solution on top of that existing disorder, on top of the existing IT systems, or do we actuassociate treat the root cause of this and produce an enticount on novel hospital adviseation system?”
They made a big call, he said, and went for the latter, “understanding it would be difficulter, understanding it would consent us lengthyer, but in brimming belief that this way, you can settle a lot of those root causes, and then in the second step, after having done that detour, be distinctively positioned to do all the fancy AI stuff on top, because you have structured data, you can unite AI solutions.”
And so it took years, but Avelios eventuassociate ended up produceing a system that is end-to-end for all skinnygs administrative: it comprises an EHR (electronic health sign ups), billing, clinical sign ups and lab results, fortolerateing portal and environments for researchers and people laboring apass branch offent departments or institutions to collaborate.
In insertition to the wake-up call of Covid-19 (which itself has come, in Germany, with a funding raise from the rulement to modernize systems), there have been some other presentant shifts that have helped Avelios land conversations, and then deals, with healthnurture supplyrs.
The first of these has been a change of honestion for what is probably its biggest incumbent competitor. SAP — one of the biggest supplyrs dominating the legacy IT labelet in healthnurture (and other verticals) — has been on the route transitioning its $30 billion go inpelevate resource structurening (ERP) business to a cdeafening services architecture.
That has uncomferventt it has shifted away from produceing, and helping to aid lengthy-term, point-particular solutions for particular verticals, including healthnurture. More than 1,000 hospitals using SAP’s legacy systems will thus necessitate to change supplyrs when upgrading. (SAP advises Avelios among others as a transition partner, and Albrecht said they are laboring on trying to get into a pole position in that adviseation flow.)
The second is the big push for AI. Like many other industries, healthnurture is not fair being pushed lots of AI solutions; it’s also asking for them. But they cannot shift forward on effective AI applications without having their data in a state to be used — structured, interoperable — and legacy systems typicassociate aren’t built for that. That becomes another fillip for updating.
Sequoia’s attention begined out by way of an introduction from Revent, one of the seed spendors.
“Avelios was under the radar produceing this system for four years,” Anas Biad, Sequoia’s partner directing on the spendment, said in an intersee. He said he was endly surpelevated to find once he begined to see fair how many customers they’d picked up despite being so mute. “They administerd to triumph some of the bigst confidential and uncover hospitals in Germany. We were pretty amazed and we sprinted very rapid after that.”
Although Avelios is making a big and driven striumphg here, it’s doing so also with a lot of pragmatism, it said. Hospitals are not typicassociate going to turn around and rip out entire systems wholesale to modernize, not least because they have to progress operating, but also because of the cost.
Indeed, this cybersecurity alert from 2022 from the Healthnurture Increateation and Management Systems Society set up that among the hospitals it surveyed, some 73% portrayd their systems as “legacy”. Broken down they comprised 35% using Windows Server 2008, 34% using Windows 7, 25% using a legacy medical device OS, 21% using an industrial administer systems OS (21%), and (shock horror) 20% still using Windows XP, and 19% using Windows Server 2003 and 2003 R2 (19%). “Some healthnurture organizations may not necessarily be structurening for obsolescence of these operating systems,” the HIMSS writes in the alert. “Every asset has a beneficial life, and it is presentant for organizations to structure for its end of life.”
Avelios’s approach has therefore been to retain skinnygs modular.
“We can land modularly with customers,” said Albrecht. This could uncomfervent, he elucidateed, first providing gentleware for helping with administrative functions around retaining recordation, then billing, then fortolerateing portal, or in a branch offent order. “That’s someskinnyg that existing legacy carry outers can’t supply, because they would replace one monolithic system with another monolithic system,and then you only have the Big Bang chooseion. And that’s why a lot of those projects go so horribly wrong.”
