Mapping Chicago's early-stage healthtech startups

At nearly 10% of Chicago's venture activity, healthtech is one of the city's most dynamic startup sectors. TechNexus maps the early-stage ventures applying AI, telemedicine, and data analytics to transform healthcare delivery, diagnostics, and patient outcomes.

As a firm, TechNexus Venture Collaborative is actively tracking over 1,000 early-stage startups in Chicago. Through our Reinventing Industries series, we're breaking down the specific verticals that see the highest amount of venture activity in the city.

To kick things off, let's examine Chicago's healthtech venture landscape. At nearly 10%, healthtech accounts for the highest volume of early-stage companies funded in Chicago. All founded in the last ten years, this collection of startups has raised over $400 million in total, according to Pitchbook.

As one of the largest categories of burgeoning companies in Chicago, innovation areas include:

• Novel medical devices for surgical, diagnostic, or therapeutic purposes
• Digital platforms democratizing healthcare access
• Remote monitoring systems
• AI-powered tools for medical imaging, disease prevention, and bioanalytics

GOING DEEPER: Healthtech sub-verticals gaining steam:

• Operations Management: The healthcare industry is long known for being inefficient and slow. Seven Chicago-based operations platforms have raised a total of $44 million since 2023 to help health professionals manage workflows, share information, and track patient care with greater efficiency. Praia Health, for example, has built a personalization platform that provides healthcare providers with an e-commerce-like experience to engage more effectively with patients.
• AI-Powered Analytics: 97% of all global data produced by hospitals annually goes unused. Several of Chicago's AI-healthtech ventures are working to unlock this data and create valuable insights around diagnostics, medical imaging, and bioanalytics. Of the 12 early-stage startups in this category, eight have raised a funding round in the last 15 months. One example is Hoppr, which is building an API for the first AI foundation model to revolutionize medical imaging.

Chicago has the right ingredients for healthtech ventures to thrive through every stage of the startup journey, including:

• Company Formation and Early Stage Support
  • Accelerators—MATTER, mHub's MedTech Accelerator
• Access to Key Customers
  • Corporates—Walgreens, GE Healthcare, Baxter, Allegiance, Abbvie, Abbot
  • Hospital/Health Systems—Northwestern Memorial, Rush University Medical Center, Endeavor Health
• Availability of Talent and Cutting-Edge Research
  • Universities—Northwestern, University of Chicago, Loyola
• Scaling
  • Venture Firms—7wireVentures, 2Flo Ventures, Blue Venture Fund
• Exit Pathways and Long-Term Growth
  • PE firms—Shore Capital Partners, Thoma Bravo, GTCR
• Integration of Emerging Tech
  • Quantum Hub—Healthcare is a primary market for real-world applications, such as drug discovery/synthesis and medical imaging.

Over the last two decades, Chicago has had no shortage of healthtech success stories. Serial entrepreneur Glen Tullman has been behind a handful of successful ventures. He was the CEO of Allscripts from 1998 through 2012, led Livongo through an exit to Teladoc, and is now leading growth-stage startup Transcarent, which is valued at over $2 billion. Other examples include Merge Healthcare, which was acquired for $1 billion by IBM in 2015. VillageMD raised $5 billion from Walgreens. And Tempus hit the public market earlier this year in an IPO that valued the Chicago startup at more than $6 billion.

The big question is...Which early-stage ventures will follow in their footsteps?

By Joey Alfieri at TechNexus Venture Collaborative