Idiosyncratic Phenomenon #4: Flagler Health
As an early stage investor, it’s really hard to approach identifying promising startups just by applying general patterns based on fundamental assessment frameworks typically deployed in business. Last year we published the Idiosyncratic Phenomenon — our attempt at 186 to deconstruct part of our approach to identifying outlier early stage investment opportunities. It’s important to note that we still do apply fundamentals to each startup assessment, e.g. team, market size, differentiation, business model / economics. In this new series, we will focus mainly on what we find to be both idiosyncratic and a phenomenon
We co-led Flagler Health’s March, 2024 seed round after they had been building Flagler for nearly two years. The idiosyncratic phenomenon couldn’t have been any clearer and the company has already grown well into seven digit revenue in less than a year’s time along with a seemingly infinite pipeline of provider and patient demand.
The Idiosyncrasy:
The founders of Flagler Health, Albert Katz, Leon Anijar, and Will Hu possess the complete set of complementary super powers needed to transform the patient experience for the musculoskeletal (MsK) industry. As a collective, the founders previously ran both the strategy and clinical operations behind several MsK clinics, brought a physicians perspective on how to best treat MsK patients, and have built mass scale healthcare technology infrastructure. Through their respective healthcare journeys, not only did they work closely together and developed deep professional bonds, but they also started to formulate a thesis around how MsK providers can increase the patient experience and most importantly improve patient outcomes through the use of AI and technology. They decided to build Flagler Health, which is an end-to-end operating system for MsK clinics to help providers operating in the costliest disorder in the U.S.
We first met the founders in early 2023 when they were just getting their early treatment recommendation models off the ground after having raised $500k or so from early friends and family. It was not abundantly clear why this could be a venture scale opportunity when we first met them, but the founder market fit and the magnitude of the vision the founders had for solving for a critical gap in chronic care management was extremely compelling. After tracking Flagler for 9 months, we decided to pre-empt their seed round and ended up co-leading it with Streamlined ventures.
Aside how uniquely positioned the team is to take on this problem set that many are trying to go after, it’s important to highlight how prior to their formal seed round, the team built world class chronic care management technology and partnered with leading medical device technology companies in order to gain access to tens of thousands of MsK clinics representing a patient population north of one million patients, on less than $1M raised.
The Market Phenomenon:
129 million people in the US have at least one major chronic disease. Trillions of dollars a year are spent within the US to treat all chronic conditions, and within that $420 billion is spent annually on MsK conditions, making it the most expensive chronic condition in the country. Physicians are struggling to effectively manage patient care and keep up with the changing healthcare landscape involving automated treatment recommendation, chronic care management (CCM), and remote therapeutic monitoring (RTM), among other things that are necessary in order to improve patient outcomes within MsK. In addition to this general challenge that physicians face to keep up with how patient needs are evolving & increasing, the larger healthcare market is moving towards a Value Based Care system, which current workflow tools are not optimized for and capable of providing practitioners the tools they need to fully take advantage of new and upcoming policy. Poor EHR interoperability, redundant time spent on treatment recommendation, inability to service RTM without hiring new personnel represent existential challenges to providers aiming to remain competitive with various patient populations.
In a post COVID world, in November, 2022 the American Medical Association (AMA) unlocked new revenue streams that were never possible before specific to RTM, all in an effort to improve patient outcomes and help providers adapt to a value based care paradigm. All of this comes full circle when you factor in recent, unprecedented capability offered through the use of artificial intelligence (AI). AI is a key ingredient to being able to streamline and in some cases outright automate new, novel forms of patient care that are essential to MsK care pathways.
Concluding Remarks:
By introducing innovative revenue streams for healthcare providers and enhancing patient outcomes without necessitating changes to existing clinical workflows, Flagler aims to embed itself seamlessly into these chronic care management workflows. This strategic approach allows them to collect data that will contribute to the development of a market-leading value-based care platform. Long-term, this solution positions Flagler to build the full vertical AI stack for all MsK providers, and beyond.
In less than twelve months time, the Flagler Health team has experienced explosive growth in ARR and patients enrolled alike. Their unique co-marketing partnership with leading med-tech companies has given them consistent access to thousands of providers and millions of patients across the US. Our timing on co-leading their seed round was quite opportune; if only every venture investment could start off this way!
This is still only the beginning of a very exciting movement in the world of healthcare. Specific to Flagler, they find themselves in the midst of quintessential product market fit (PMF) where they are unable to fully service customer demand, mainly because given the sensitive nature of this clinical workflow the company wants to make sure that it can maintain the highest standards in providing their service to providers and end patients alike.
If you are an MsK provider who wants to learn more about Flagler’s enterprise grade healthcare enablement infrastructure offering that many have been signing up to use, please do not hesitate to reach out directly to the Flagler team.
Check out our last three 186 Ventures idiosyncratic phenomenon editions on Wingspan, Integrated Projects, and Glide below.
Idiosyncratic Phenomenon #1: Wingspan
