It is no secret that startups founded before the AI era are currently being overlooked by investors. However, Ariel Katz, founder and CEO of the nine-year-old medical data platform H1, emphasizes that not all SaaS companies should be treated the same. He believes that while simple SaaS services that automate workflows can be easily replaced by AI, companies providing fundamental data face less risk. This is reported by Techcrunch.com reports .
H1's business model is based on selling detailed physician data to pharmaceutical companies, hospitals, and insurers. Katz says that large language models like Anthropic's Claude cannot replace them. On the contrary, the global data collected by H1 could be so valuable to AI model creators that they are more likely to become customers rather than competitors.
CVS Health Ventures supported this view and led a $40 million investment round for H1. According to Ariel Katz, the startup did not actually need to raise capital. The company reached EBITDA profitability last year and is planning over 40 percent growth this year. However, the opportunity to partner with one of the world's largest healthcare companies was an offer too good to refuse.
Companies with stable financial performance like H1 may not be of much interest to traditional venture investors who are currently only valuing AI startups highly. H1 was last valued at $750 million in 2021, at the peak of the tech bubble. Since then, the company has focused on profitability and expanding through the acquisition of smaller competitors.
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