With an Investment in Zephyr AI, Revolution Growth Expands its Healthcare Portfolio of Companies Improving Patient Outcomes

By Revolution Growth Partners Fazeela Rashid and Steve Murray

Today, we announced our investment in Zephyr AI, a company combining a proprietary healthcare dataset (that has unprecedented breadth across disease states and data partners) with cutting-edge AI algorithms to generate novel insights in the areas of oncology and cardiometabolic diseases. The $111M Series A funding will be used to accelerate the company’s analytical speed and validation, expand scientific and commercial teams, and speed up the delivery of its pipeline of insights to the market. Additional investors in the round include Eli Lilly & Company, Jeff Skoll, EPIQ Capital Group, and additional strategic investors.

Zephyr set out to tackle two major problems across healthcare — the high cost of drug discovery and patient care — by developing machine learning models in therapeutic identification and predictive analytics. Zephyr’s therapeutic identification models provide novel predictions around a patient’s likelihood of responding positively to a specific treatment, which informs future utility for clinical trial design and additional applications for approved drugs. The company’s predictive analytics models help physicians understand a patient’s likelihood of experiencing an adverse outcome following an initial diagnosis, which helps inform treatment decisions. With an initial focus on oncology, diabetes, and obesity, Zephyr will ultimately deliver insights to pharmaceutical companies, healthcare providers, and insurers to both align incentives and optimize patient outcomes.

The company was founded in 2021 by investment and incubation firm Red Cell Partners, based in McLean, VA, and led by Grant Verstandig. Grant is an accomplished entrepreneur who has founded and scaled numerous businesses, including Rally Health, a digital tool used to access care and lower costs that was acquired by UnitedHealth Group in 2017. He previously served as Chief Digital Officer at UnitedHealth Group, where he oversaw the strategic direction, governance, and performance expectations of digital platforms.

Healthcare is a $4.5 trillion market in our country, and one in need of massive change. Healthcare spending, per person and as a share of GDP, is far higher in the U.S. compared to other high-income countries. At the same time, Americans experience higher rates of avoidable deaths and lower life expectancies. The use of technology, AI, and data hold significant promise in improving patient outcomes, while also introducing important considerations around safety, efficacy, and access.

Our firm’s sweet spot is investing in tech-enabled businesses that are disrupting legacy, multi-billion-dollar industries. Within the healthcare and AI space, we look for founders who have a firm conviction about the specific problem they set out to solve and a deep understanding of the data they set out to access.

Another example is Eric Lefkofsky, founder and CEO of Tempus, a Chicago-based company advancing precision medicine through the practical application of AI in healthcare. Tempus has used tech to address some of the most difficult diseases by creating, organizing, and analyzing data at an unprecedented scale. The company has built the world’s largest library of clinical and molecular data to help physicians deliver precision medicine.

Companies like Zephyr and Tempus will continue to play a critical role in advancing therapeutic developments and lowering healthcare costs for future generations — a priority within recently passed legislation. The Inflation Reduction Act includes several provisions to lower prescription drug costs for Medicare recipients, and the Centers for Medicare & Medicaid Services is intently focused on reducing the cost of care while improving outcomes.

Many of our strongest bets to date have been companies operating at the intersection of policy and tech. We’re proud to be early investors in Zephyr, support the mission of democratizing precision medicine, and continue to work with brilliant entrepreneurs to improve patient outcomes. For more on our latest investment, visit zephyrai.bio.