This Entrepreneur Raised $200 Million To Support Better Health Outcomes With Intelligent Technology

Daniel Nathrath has had an exciting entrepreneurship journey building and exiting companies. He went on to build Ada Health, a revolutionary clinically-driven AI application that provides patients with in-depth health information.

In this exclusive interview, Daniel discusses drawing inspiration from Alejandro Cremades’ book, The Art of Startup Fundraising. He also talks about Alejandro’s expertise that helped him raise funding worth $200M for Ada Health.

Listen to the full podcast episode and review the transcript here.

Childhood in Germany and Early Influences

Daniel Nathrath’s journey began in a small town in Germany, surrounded by a family of doctors. His father was an ophthalmologist, which gave Daniel an early exposure to the healthcare industry.

Despite this, he wasn’t initially inclined to follow in his father’s footsteps due to the demanding nature of the profession, which involved long hours in a dark room.

Unsure of his path, Daniel chose to study law in Germany and then in the United States, thanks to a Fulbright scholarship that took him to Houston, Texas. Daniel also took the bar exam in New York.

During this time, in the mid-90s, he discovered the internet, a revelation that would shape Daniel’s future career. Initially, he simply enjoyed being able to stay on top of what was going on in German football or soccer.

The Dot-Com Boom and Lycos Europe

Soon after, Daniel returned to Germany and despite getting a few offers to join international law firms, he opted to join Lycos Europe, a leading internet company at the time.

Lycos was a joint venture between Lycos US and Bertelsmann and was one of the earliest search engines and portals competing with Yahoo. Joining Lycos in 1999, Daniel played a pivotal role during its IPO and subsequent rapid growth.

The company acquired about 50 companies across Europe and went from 40 employees to 1,500 in a very short period. This period was marked by numerous acquisitions and integration challenges, providing Daniel with a crash course in the highs and lows of a fast-growing tech company.

Lycos USA’s founder, Bob Davis, led Lycos to the fastest IPO ever on the NASDAQ. Initially, Daniel had joined Lycos Europe as a lawyer but transitioned quickly to a higher position, taking on a more business-focused role in the company.

Lessons in Integration and Growth

As Chief of Staff to the CEO and later overseeing post-merger integration, Daniel witnessed firsthand the chaos that often accompanies rapid expansion.

The motto Speed is Life, inspired by a book the founder of Lycos wrote, underscored the company’s approach, often at the expense of thorough due diligence.

Despite the eventual decline of Lycos due to competition from more focused companies like Google, Daniel gained invaluable experience. As he recalls, almost all the companies they acquired were run by very young and often, first-time founders.

The challenges of integrating diverse companies, especially in different countries with varying tech platforms and cultures, taught him crucial lessons about scalability and the importance of careful planning. He basically experienced the whole life cycle of a company in fast-forward.

One year later, Lycos had to go through restructuring and went back down to 600 to 700 people. The company went through a lot of acquisitions and fast growth but also made many mistakes along the way.

However, many of the former Lycos team members went on to become extremely successful founders, building companies like King.com (the maker of “Candy Crush”) and dating platforms. One of them also became the President of Europe of DoubleClick.

Transition to Business and Consulting

Daniel’s next step was to deepen his business acumen. Coming from a medical family with little financial literacy, he pursued an MBA at the University of Chicago’s global executive program. His objective was to develop an understanding of what entrepreneurship means.

This experience spanned Barcelona, Chicago, and Singapore, enriching his understanding of global business practices. Post-MBA, Daniel joined the Boston Consulting Group (BCG) to gain exposure to various industries.

He made it clear from the outset that his tenure at BCG was a stepping stone to launching his own venture. This period allowed him to explore banking, insurance, and other sectors, but his passion for tech and entrepreneurship remained strong.

Founding and Selling a Startup

The entrepreneurial itch led Daniel to co-found a startup in the skill gaming sector, a venture born from casual conversations with MBA classmates over beers in Barcelona.

At the time, Daniel and his friends were studying for a Master of Business Administration and intended to go back to corporate jobs like consulting, investment banking, or similar spheres.

Despite being bootstrapped, the startup became profitable quickly, but Daniel soon realized it lacked the purpose he sought.

The company was sold, providing a modest financial return but more importantly, a deeper understanding of startup dynamics. This experience reinforced his desire to create something with a more significant impact.

Combining Passion and Purpose with viagogo

Daniel’s next role brought together his passion for football, soccer, and tech, all recurring themes. He joined viagogo, a secondary ticketing platform, as the German country manager, overseeing its partnership with Bayern Munich.

Working closely with the founder, who had previously founded StubHub, Daniel gained insights into effective fundraising and commercial strategy.

After three and a half years, he yearned for a venture with greater purpose, leading him to take a sabbatical and travel the world, a move that would set the stage for his next big project.

Ada Health: Revolutionizing Healthcare

Upon returning from his travels, Daniel was approached by former Lycos colleagues about a groundbreaking idea in healthcare.

They introduced him to Martin Hirsch, a scientist with a mission to eradicate misdiagnosis, and Claire, a doctor who would become Ada Health’s Chief Medical Officer and Daniel’s wife.

Talking about the dynamics of the founders’ relationships, Daniel reveals that they had a separation of responsibilities.

Claire is a trained doctor from the UK, a pediatrician, and a geneticist and has worked in the National Health Service in England for 10 years. She is the medical brain of Ada Health.

Daniel handles the business aspect, including fundraising, getting revenues, and other challenging tasks. Together, they co-founded Ada Health, aiming to create a decision support system for doctors. Initially, the challenge was immense.

Around 10 years ago, convincing doctors accustomed to pen-and-paper methods to adopt new technology was a hard proposition, particularly in Germany, where there are lots of concerns about using technology.

Pioneering Patient-Centric Healthcare Solutions

Ada Health pivoted to focus on patients, recognizing the potential to empower individuals with accurate health information. Daniel and Claire knew that 7% of Google searches are health-related and one in five of these searches consists directly of a symptom.

At the time, the online company WebMD had a primary feature called a symptom checker, but it wasn’t very accurate. Daniel and his co-founders were confident that the application they had built was multiple times more accurate.

However, they had to figure out a way to make it easily accessible and usable for patients. That’s how they developed a chatbot, launched in 2016-2017, which became one of the first in the medical space. Essentially, Ada Health launched one of the first chatbots in the medical space.

The Ada Health Business Model

Despite initial uncertainties about the business model, Ada Health found success through partnerships with health systems, insurers, pharmaceutical companies, telehealth companies, and the government.

The app, available for free, has been downloaded by over 14 million people and processes millions of health queries globally. Ada Health has more than 35 million cases in the system and every three seconds, someone somewhere in the world enters a new case in Ada in 12 different languages.

Daniel and his co-founders settled on two main business models. One is working with health systems, governments, and payers to provide a kind of a digital front door, a triage tool at the beginning of the patient journey. That’s where Ada Health integrates the software into its partner’s environment.

For instance, Ada works with Jefferson Health, a large health system in the US. Jefferson integrated Ada’s technology where people can start their journey with Ada before they see a doctor. They can figure out if they need to see a doctor and which doctor would be the best to help them.

Ada is integrated with the electronic health record system and lets users go straight into the appointment booking. It redirects a significant percentage of people towards self-care, where that’s appropriate, so people with a cold shouldn’t go to the emergency room.

Ada also helps prepare for the doctor visit. It automates part of the doctor’s job by taking the patient’s history, saving the doctor several minutes per appointment because part of the documentation effort is already done.

The business model is a SaaS model where the partner organization pays Ada an annual license fee. These types of contracts are typically multi-year contracts and both sides invest efforts in setting up the integration.

It’s working exceptionally well and has a very high satisfaction for Ada’s partners, including the largest health system in Portugal, one of the largest health insurers in Switzerland, the most innovative health system in the US, and a province in Canada.

A Second Business Model

The second business model is working with life sciences companies to match the patient to the most appropriate underlying condition. Ada helps pre-assess the patient and then directly connect to a healthcare professional who can then prescribe treatment.

Essentially, it’s about creating awareness for the patient and can be lifesaving ensuring they get the right treatment. This process works in the commercial interest of the pharma companies. It also helps find patients for clinical trials.

As Daniel explains, Ada is like a doctor in your pocket and is very good at finding the undiagnosed population. It serves the interests of life sciences companies and individual patients needing care.

Navigating the Fundraising Landscape

The fundraising journey for Ada Health was atypical. The first five years were funded by high-net-worth individuals mostly from Germany, who believed in the mission. Daniel explains how he has always believed in the doctor-led, science-led, and responsible approach.

He is a big fan of the lean startup approach, building an MVP, generating revenues, and iterating from there. Since the Ada product could have a massive positive or negative impact on users’ health, he exercised complete caution with the MVP.

A Private Video Call with the Author of The Art of Startup Fundraising

Institutional funding began in 2017, coinciding with Daniel’s engagement with thought leaders and resources, including Alejandro Cremades’ The Art of Startup Fundraising. Daniel remembers Alejandro’s private Facebook group in 2016 and the small community of entrepreneurs.

A private video call with Alejandro where he imparted some of his wisdom on fundraising was very helpful for Daniel. The insights he gleaned were different from what Daniel had been doing and were inspirational. And, they provided valuable direction for his fundraising journey.

Ada Health has raised approximately $200M and turned profitable last year, a testament to the team’s dedication and strategic vision.

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A Vision for Global Health Equity

Looking ahead, Daniel envisions a world where everyone has access to accurate, personalized health information at their fingertips, regardless of their geographic or economic circumstances.

Ada Health aims to integrate data from various sources, including wearables and genomic information, to provide proactive and preventative healthcare solutions.

By doing so, Daniel hopes to address health issues early, reducing the burden on healthcare systems and improving outcomes for individuals worldwide.

Ada already has a reach of 50 million people today. His target is to reach more than a billion people in a few years from now. Currently, billions of people cannot afford or access a doctor but have internet access.

Daniel iterates that Ada is not about replacing doctors but supporting doctors and people who don’t have access to doctors. He would like to see a world where healthcare is more equitable. Ada should not only look at the symptoms but eventually integrate data from all relevant sources.

The app should gather data and address the problem, identifying it as a $100 problem which is not yet a $100,000 problem. Getting an early diagnosis can save lives. Ada saves the patient’s medical history and applies probability modifiers to detect the problem based on the symptoms.

When combined with direct-to-consumer lab tests, technology can help patients understand and manage their health more efficiently.

In Conclusion

Daniel Nathrath’s journey from a small town in Germany to leading a transformative health tech company underscores the power of passion, resilience, and vision in creating lasting impact.

His story is a testament to the potential of technology to revolutionize healthcare and improve lives on a global scale.

Listen to the full podcast episode to know more, including:

• Daniel Nathrath’s early exposure to healthcare and his legal studies in Germany and the US set the stage for his diverse career.
• During the dot-com boom, Daniel played a key role in Lycos Europe’s rapid growth and IPO, gaining valuable tech industry experience.
• His time at Lycos taught him crucial lessons about scalability, integration, and the importance of careful planning in fast-growing companies.
• An MBA from the University of Chicago and a stint at Boston Consulting Group deepened Daniel’s business acumen and prepared him for entrepreneurship.
• Daniel’s first startup in the skill gaming sector was a profitable venture, reinforcing his understanding of startup dynamics despite its lack of personal fulfillment.
• At viagogo,, Daniel combined his passions for tech and football, gaining insights into effective fundraising and commercial strategies.
• Co-founding Ada Health, Daniel aims to revolutionize healthcare by providing accurate, patient-centric health information, raising $200M and achieving profitability.

 

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