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Meet the $3.3B Digital Health Anti-Unicorn

Image courtesy of David South / Alamy Stock Photo Photo of a Komodo Dragon, the namesake of digital health startup Komodo Health
Named after the last living dragon – the Komodo Dragon – this digital health startup has been so modest about its rapid success that it was dubbed the "anti-unicorn" by one of its investors.

Given the incredible growth of the digital health space over the past five years – not to mention the booming demand for digital health solutions during the pandemic – it's not easy for a digital health startup to stand out from the crowd. One such startup that is quickly gaining some overdue recognition, however, is Komodo Health.

After a whirlwind of activity in 2021, including near triple-digit year-over-year revenue growth, securing a $220 million series E round, and adding 500 new employees and more than two dozen new life sciences clients, San Francisco, CA-based Komodo is positioned for exponential growth in 2022. Oh, and that series E round last year brought the company's valuation to $3.3 billion, which is well past "unicorn" status. But in the words of one of Komodo's investors, don't call this Silicon Valley startup a unicorn. Instead, call it the digital health anti-unicorn.

In a LinkedIn post written in January 2020, Sundeep Peechu, a general partner at Felicis Ventures, described how Komodo Health co-founders Web Sun and Arif Nathoo, MD, "bucked the unicorn culture and built a great business" by focusing on capital efficiency and customers rather than "chasing valuations, massive fundraises, and a grow-at-all-costs mentality."

In fact, prior to the company's $50 million series C financing round in January 2020, Komodo Health had raised a seed, A, and B financing without ever announcing any of those rounds.

"Web and Arif were not on any X under Y lists or on the glitzy conference circuit. Their website is intentionally sparse with no marketing. Their entire focus was customers, not some vanity PR for themselves," Peechu wrote. "Anyone who meets them knows that this is exactly their authentic self."

Indeed, that authenticity came through during my recent Zoom meeting with Nathoo, the company's co-founder and CEO. During that conversation, he told me he had laughed when he first read Peechu's post dubbing Komodo an anti-unicorn.

“I laughed because there is an aspiration or an obsession with valuation as a marker for business success, and we have always felt like the best marker for business success is whether we’re around 25 years from now," Nathoo said. "Building a generational business, building a business that endures, these are not marked by how much your market cap is or how much money you raised, but effectively how well you operate a business and how much belief you have in the power of that business to transform something. So, for us this is very personal in terms of building a business. So, until this got leaked, our last round, we never announced any of that, we just quietly raised money … and when we share it with people, they understand why this matters, it’s a testament to our beliefs, and that's a gift. That's reward enough."

Komodo Health valuation chart - digital health startup.png

The story behind Komodo Health's name

Every fairy tale has a proverbial dragon that the protagonist must overcome in order to succeed. That, Nathoo explained, was the inspiration behind the name Komodo Health. The digital health company's website further details this origin story.

"But dragons in stories are often misunderstood – feared instead of revered. When the power of the dragon is harnessed, heroes are born, quests are triumphant, and the ending is always a happy one," the site states. "Given the importance, and difficulty of our mission, we named ourselves after the last living dragon – the Komodo Dragon – recognizing that it will take the power, wisdom, and just a touch of magic that only a dragon can provide, for us to successfully achieve our goals."

More than just another digital health company

Komodo Health is an enterprise software company that works with pharmaceutical companies, payers, providers, and other healthcare stakeholders.

"What we do is take a lot of data on patient health, what we call our Healthcare Map, apply algorithms to study populations, and then push that through enterprise software applications that help companies get deeper and smarter on their patients," Nathoo said.

The digital health company supports a huge range of use cases. For example, a pharmaceutical customer might go to Komodo for help find and recruit a cohort of patients with very specific characteristics for a clinical trial. Meanwhile, another customer might be interested in learning about the needs of a specific patient population in a way that is more consistent and addresses healthcare inequities.

"That’s why we believe very deeply that data combined with technology is a great democratizer of insights, and helps companies actually better address that patient need," Nathoo said.

The company's partnerships also paint a picture of what their technology is capable of. On Monday, for example, Komodo announced a partnership that will provide rare disease patient advocacy organizations in the Chan Zuckerberg Initiative's Rare As One Network with the software and analytics firepower needed to help improve earlier diagnoses, close gaps in care, and accelerate research across some of the world’s most complex and difficult diseases. With access to Komodo technology, those organizations will be able to more clearly identify patient cohorts, better understand the diagnostic odyssey for rare disease patients and how to shorten this journey, identify demographic disparities, and connect patients to appropriate healthcare providers and clinical researchers. The technology and insights will also help accelerate research opportunities for rare diseases that are often overlooked.

What sets Komodo Health apart from legacy 'big data' companies?

Arif Nathoo, Komodo Health, quote about big data in healthcare, digital health.png

A lot of digital health companies have been launched over the past couple of decades with the intention of harnessing "big data" but Nathoo says a lot of those legacy companies exist to aggregate data and re-sell it to the market.

"The challenge with that is, honestly, the data, once it's packaged and sold, it's very difficult to know what it represents," Nathoo said. "We don't know if the data represents 5% of the patient’s life or 95% of the patient’s life. We often don't have a lot of good demographic characteristics on the patient that allow us to do equity research." 

When the data lacks those patient characteristics, it's difficult to piece together their patient journey.

"So, we took the approach of starting to work with different providers and payers to look at data. We think about the longitudinally of that patient journey as a starting point because it allows us to really understand what's happening to their care. And then we think about all the sociodemographic characteristics of that patient that allow us to study unmet needs better," Nathoo said. "… Komodo grew up in the era of big data … Nobody talked at the time about big insights or big patient outcomes. They talked about big data as if data was the remedy."

Komodo Health, founded in 2014, wanted to not only harness that big data, but do it in a way that improves outcomes, he said. The emergence of artificial intelligence (AI) and machine learning (ML) has certainly helped, but neither big data nor AI/ML alone leads to better patient outcomes.

"When we start to work with the data, we realize that so much of the issue is that people don't know what to do with it," Nathoo said. "You have all this data, you don't know how to convert it, you don't know what's truly signal versus noise, you don't know whether an observation is real or not, and so we spend a lot of time really analyzing it in a way that leads to better outcomes. We serve up the right kinds of answers, we do it efficiently, we do it in a way that a business decision maker can make a better decision, and that was a huge part of where we felt like the missing need was."

As data becomes increasingly liquid, Komodo Health believes that these types of systems need to be open and accessible, while maintaining patient privacy, of course.

"So, how do we make more and more data available to folks? How do we make sure they can be linked to other characteristics that we can maintain de-identification where that's appropriate? So, we've built a lot of the instrumentation that truly democratizes access to this type of insight, and that allows companies to get really, really smart at the right level around their patient needs. … So, that's what makes us a little bit different is that our business model from day one was software enabled, was really focused on democratizing access, and we’re seeing that play out now."

Last year, Komodo acquired Mavens, a leader in cloud-based technology solutions, which has helped the company penetrate deeper into the life sciences enterprise, allowing its real-world patient data and analytics software to integrate directly into drug development and research workflows. Komodo also acquired Breakaway Partners, creating the first enterprise market access solution combining robust real-world patient data with comprehensive insights on formulary and prescription policies.

Another 2021 milestone for the digital health company was its partnership with Blue Health Intelligence. This multi-year agreement integrates Blue Health Intelligence’s longitudinal, de-identified, real-world patient data into Komodo’s Healthcare Map, which provides a comprehensive view of patient encounters with the U.S. healthcare system. Together, the combined Komodo database captures the patient journeys of more than 325 million de-identified individuals – creating the largest, deepest, and most diverse single source of real-world patient data in the U.S.

"The acquisitions and the financing rounds are just a reaffirmation of where we're going as a business," Nathoo said.

The challenges of working with de-identified patient data

While de-identification of data in digital health provides a slew of benefits, it's also associated with some unique challenges.

"Number one is just managing the security and the privacy of de-identified data," Nathoo said. "When you say something is de-identified, it needs to stay de-identified. Every time you get an additional piece of information you increase the probability – even if it's coming to you de-identified – you increase the probability of re-identification. So, there's almost a whack a mole that you play with the probability of re-identification, but what’s most important is that if you have structures and systems and you can use AI and machine learning to really identify where those risks exist, you can stop those risks from manifesting in your de-identified data."

Another challenge is in the process of de-identification of the data, he explained, because by suppressing certain dates or information, or even transposing certain pieces of information just to scramble it up, that dilutes the value.

"So, we have to reassemble truth," Nathoo said. "I always tell folks that we're like truth seekers. We go out there, we have to figure out what's real, what's not, and a lot of that work, when we do it right, preserves the de-identification and creates ground truth."

A third big challenge when working with de-identified data is that every time you want to do something else with the data set, such as answer a question on health equity, it's difficult to add features into a model without re-identifying the entire data set, he said.

"So, there's a huge push to make that easy," Nathoo said. "We've actually built a very large and flexible schema, we have principles in place that allow us to bring in new features very efficiently, and we think that the more technology we can employ to make that process quick and yet preserve de-identification, the easier it is for folks with great ideas to come to the table and be able to exploit those."

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