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Disclosure: I am an independent journalist. I have no financial position in OpenEvidence, Doximity, Teladoc, Waystar, Clarivate, Alphabet (Google), RELX (Elsevier), Wolters Kluwer, Wiley, Epic, Abridge, Hippocratic AI, Anthropic, OpenAI, Baseten, Nvidia, Databricks, Perplexity AI, Hugging Face, SpaceX, Oura, Peloton, Hinge Health, Omada Health, Hims & Hers, Tempus AI, Veeva Systems, IDEXX Laboratories, Verily, Freenome, Commure, Atomic AI, Quadrivia AI, Heidi Health, K Health, UnitedHealth Group, Humana, Johnson & Johnson, Pfizer, Merck, Biogen, Incyte, Goldman Sachs, S&P Global, FactSet, Evercore, Altaris or any other company mentioned in this article or its charts. I have reached out to OpenEvidence and Daniel Nadler for comment multiple times and have received no response. The invitation to an interview on AI Health Uncut and on Digital Health Inside Out stands. Accounts attributed to people familiar with the company come from sources who spoke on condition of anonymity, and were verified against public records where possible. This article is my opinion, based on the sources cited, and is not investment, legal or medical advice.
On September 24, Business Insider reported that OpenEvidence raised another $250M, this time from Andreessen Horowitz and a group of hospital systems, at a $15B valuation. Three paragraphs in, the real news: OpenEvidence “could be open to an M&A deal that includes access to compute” (M&A: a merger or acquisition).
Translation: the “ChatGPT for doctors” is for sale.
But first, a word about how this work gets paid for. Independent investigative journalism comes at a significant cost, both in time and legal risk, so I have launched the AI Health Uncut Sponsorship Program. AI Health Uncut’s subscribers include prominent leaders in healthcare, technology and investment, including household names you would undoubtedly recognize. Sponsorship puts your work in front of all these people, who help shape the industry’s direction, its funding and its adoption of new technologies. Sponsorship does not buy favorable editorial coverage. But I welcome like-minded sponsors who respect my editorial independence and don’t interfere with what I write.
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Now, back to OpenEvidence. The company claims $300M in ARR (annual recurring revenue), a self-reported number I will explain below. By any comparable I can find, the business is worth ~$500M or less. Nadler wants 30 times that. And given his Goldman Sachs pedigree and his investor list, he may just pull it off.
I have written about OpenEvidence many times, and I still cannot tell you with certainty what the company is. Neither can anyone outside it. I reached out to OpenEvidence’s media department and to Daniel Nadler directly, more than once. No response. So I did what I always do: I talked to people closely familiar with the company, and I did a whole lot of my own research. What follows is based on confidential sources, court filings, the company’s own statements, and more than a year of my prior reporting.
I name names. I hope you are sitting down.
A note on how this works. Most of my investigations start with a tip from someone like you. I verify it with other witnesses, then add my own “mosaic theory” research on top. Everything stays confidential, always. I have been doing this for 3 years. What follows is a standing public service announcement that I run in every investigation. It is not directed at any company discussed in this piece, and nothing in this article alleges that OpenEvidence or any of its employees or representatives has broken the law or engaged in unethical conduct.
If you see something unethical, or even just weird, anywhere in healthtech, do not stay silent. Tell a newspaper, tell me (DMs, Signal, WhatsApp, whatever you prefer), or, if you believe a law has been broken, tell a law enforcement agency (tips.fbi.gov).
In this Part 1 of my investigation, I examine the economics of healthtech M&A, using OpenEvidence as a case study.
In Part 2, coming next week, I’ll take a closer look at OpenEvidence’s technology and raise some serious questions about whether the company has a defensible competitive moat. Assuming, of course, I won’t be swimming with the fishes by then. 😉
Here is what’s inside:
Part 1 (today):
1. The $15B Ask and the $500M Reality
2. Livongo Is a Warning for OpenEvidence: An $18.5B Windfall for Founders and VCs, Followed by a $340M Reality Check
3. Can Nadler Pull Off a Livongo in the Most Expensive Sector of the Market?
4. Daniel Nadler Is a Wall Street Guy. So Was Ali Parsa
5. The Doximity Hires Lasted 10 to 14 Months
6. OpenEvidence vs. Doximity: The CEO’s Text Messages Are Next
7. What a Buyer Would Actually Be Buying from OpenEvidence
Part 2 (coming next week):
8. What’s Under the Hood (Still Undisclosed)
9. OpenEvidence Owns None of Its Content, and the Publishers Can Pull It
10. OpenEvidence’s Accuracy: From 100% on the USMLE to Just 27% on Real-World Cases
11. The Nature Medicine Paper That Sparked OpenEvidence’s PR Meltdown
12. What 3 New Papers Say About OpenEvidence, and About RAG
13. Patients Not Allowed
