Avelios nabs $31M led by Sequoia to fix the ailing world of healthcare IT

The race is set up to build a new generation of health care software to replace Legacy Hospital systems that in some cases may not have been updated in decades. A startup from Munich, called Germany Avelios Has ambitions to build a new type of end-to-end administrative system, leaning to more modern tooling with the help of AI and cloud services. On Thursday it announced € 30 million ($ 31 million) in Serie A financing because it gained strength.

Sequoia leads the round from the London office, with investors from the seed round of Avelios who also participate, including high -tech Gründerfonds, Revent and individual investors.

The startup does not reveal any appreciation, but De Ronde is on the heels of Avelios that has grown impressively – all only € 5 million in earlier financing. To date, Avelios says that it has registered 12 customers, all on the home market of Germany, including one of the largest private hospital chains, Sana Kliniken AG; The hospital of the Ludwig-Maximilians-University in Munich and the hospital of the Hanover Medical School.

“I think we have been pretty efficient,” CEO Christian Albrecht told WAN. “We have a real, good technical team and a team of 11 doctors here.”

Albrecht-Die The company co-design at CTO Nicolas Jakob and Chief Medical Officer Sebastian Krammer-Zei In an interview that is the plan to use the financing to continue to develop his system and to work on breaking in more markets. It is in discussion with a hospital chain in Spain and says it also looks at France and the UK

Covid Beginning

Avelios follows a thorough approach to the World of Healthcare Systems, aimed at a market that has so far largely built around Siled implementations that serve specific purposes, and therefore have to be specially integrated to work together (and perhaps has never worked this before Good together).

But as a health problem can start small before it becomes all-consuming, Avelios itself did not start to know the scale and the scope of what it would build.

As Albrecht (left left, with Jakob and Krammer), Krammer had worked as a doctor during the COVID-19 Pandemie, when the creaking nature of German health care was uncovered.

“He ran through hospitals and spent almost all his time counting patients by hand and then reported the results to the authorities by hand,” Albrecht said. Krammer then consulted with Jakob, from whom he knew earlier, about how he could possibly build something to improve the report to gain better insights into emerging trends.

Nico [Jakob] Is a software engineer and a pretty expert in deep learning, “he went on. “And they tried it. They promised AI research, and they tried to expand that research, but they soon discovered, like many other people, that with outdated systems from hospitals they could not provide the data they would need to get their AI system get work. “

Albrecht was an old friend of Jakob’s – they had built an earlier company together – so he was put forward to help them be organized more about building something usable. They soon realized that repairing one should be required to repair the other, etc. – again, no different than a health problem.

“We were confronted with a fairly important decision,” he remembered. “Should we treat the ‘symptoms’ and build a point solution on top of those existing chaos, on top of the existing IT systems, or do we treat the root cause and do we build a completely new hospital information system?”

They called a big call, he said, and went for the latter, “Knowing that it would be harder, knowing that it would take us longer, but in full conviction that you could solve many of those raw affairs in this way; And in the second step, after taking that detour, you are uniquely positioned to do all the chic AI dings at the top, because you have structured data, you can integrate AI solutions. “

And so it took years, but Avelios ultimately built up a system that is end-to-end for all administrative things: it includes EPD (electronic health files), invoicing, clinical files and laboratory results, patient portal and environments for researchers and people who on different Departments or institutions work to work together.

In addition to the wake-up call from COVID-19 (which came in Germany itself with a government finance boost to update systems), there have been some other important shifts that Avelios have helped to land conversations and then deals, with care providers .

The first of these has been a change of direction for what is probably the biggest sitting competitor. SAP – one of the largest providers that dominate the old IT market in health care (and other verticals) – has been on their way to switching its $ 30 billion Enterprise Resource Planning (ERP) activities on an architecture in the Cloud Services. This has led to it being shifted from building and helping to support long -term, point -specific solutions for certain verticals, including healthcare.

More than 1,000 hospitals that use SAPs Legacy Systems must therefore change from providers when upgrading. (SAP recommends Avelios, among other things, as a transition partner, and Albrecht said they are working on trying to get into a pole position in that recommendation flow.)

The second is the great pressure on AI. Like many other industries, healthcare is not only pushed into AI solutions; It also requires them. But they cannot continue with effective AI applications without their data being used in a state of the state and useful – structured, interoperable and legacy systems are usually not built for that. That will be a new interpretation to update.

Investors’ attention over pragmatic victories

Sequoia’s attention began through an introduction of Revent, one of the seed investors.

“Avelios was under the radar that built this system for four years,” said Anas Biad, the partner of Sequoia who leads to the investment, in an interview. He said he was completely surprised to discover as soon as he started to see how many customers they had picked up, even though they were so quiet. “They managed to win some of the largest private and public hospitals in Germany. We were quite surprised and we sprint very quickly afterwards. ‘

Although Avelios makes a large and ambitious swing here, it also does this with a lot of pragmatism, the investor said. Hospitals will usually not turn around and eradicate the entire wholesaler in systems to update, not least because they have to continue to work, but also because of the costs.

Indeed, this CyberSecurity report from 2022 – The Healthcare Information and Management Systems Society – showed that the hospitals examined under the hospitals described their systems as “Legacy”. (Broken Down she included 35% with Windows Server 2008; 34% with Windows 7; 25% using a Legacy Medical device OS; 21% using an industrial operating systems (21%); and (shock horror) 20% still With the help of Windows XP;

“Some healthcare organizations may not necessarily plan to make these operating systems superfluous,” De Himss writes in the report. “Every active has a useful life, and it is important for organizations to plan for the end of life.”

Avelios approach has therefore been to keep things modular.

“We can land modularly with customers,” said Albrecht. He explained that this could first mean that software is provided for helping administrative functions related to keeping documentation, then invoicing, then patient portal or in a different order. “That is something that existing legacy players cannot offer because they would replace one monolithic system with another monolithic system, and then you only have the Big Bang option. And that is why many of those projects go so terribly wrong. “