After a seed round last June, Josh Walsh wasn’t looking to raise more funding this year for BranchLab, an AI startup for health care marketers that he co-founded in early 2024.
But then he met Lance Armstrong, and that changed his mind.
On Monday, BranchLab announced a strategic capital investment from Next Ventures, an early-stage venture firm co-founded by the former professional cyclist that backs startups in consumer health and healthcare markets. The amount was undisclosed.
Next Ventures has more than 20 companies in its portfolio, including smart ring maker Oura; Pair Team, which connects underserved communities with medical care; Trial Library, an AI platform that helps match cancer patients to clinical trials; and Outside, a media company with a focus on sports, recreation and active living.
“It happened pretty quickly over the course of one week,” Walsh told AdExchanger. “We met, and then Lance and team told us they wanted to partner and see us through to our larger vision.”
Pedal to privacy
That vision, Walsh explained, involves training neural networks on deidentified health data from health care providers to discern patterns, like whether people with certain symptoms or proclivities respond better to a specific medication or treatment.
BranchLab applies this AI model to general, nonhealth data, like age, location and nonhealth-specific shopping habits, to identify and target groups of people who might benefit from a particular health care product or service.
For example, say a dermatology brand wants to reach people with atopic dermatitis about a new therapy. Rather than buying third-party audience data, the brand could use BranchLab to analyze its own CRM data and find segments of the population that either likely have or seem likely to develop the condition.
“Demographics, firmographics and sociographic characteristics can be predictive of a given health outcome,” Walsh said. “And from an efficacy standpoint, it works just as well if not better than targeting actual medical data, which feels, honestly, gross, and is rapidly becoming illegal in certain states.”
Take Washington’s My Health My Data Act, which went into effect last year and prohibits the collection, use or sale of any consumer health data without explicit, opt-in consent. The law even covers nonhealth data if it can be used to infer aspects of a person’s health status.
Buying a blood pressure cuff, for instance, could indicate someone has hypertension, while purchasing prenatal vitamins is a strong sign someone is pregnant or trying to conceive.
According to Walsh, BranchLab avoids making what would be considered illegal inferences about individuals by assigning probability scores to groups of people as opposed to linking anonymized IDs to inferred health traits.
Data-driven care
This approach appealed to Next Ventures, Armstrong told AdExchanger, because it fits with his firm’s overarching thesis that health care should be proactive and interconnected, treating the whole person instead of just reacting to illness.
The ZIP code where people live and social factors, like exercise, nutrition and mindfulness, play a major role in health, but are often overlooked in traditional heath care models, leading to poorer outcomes and higher costs.
At the same time, Armstrong said, there was a clear cultural shift in how people think about their health as a result of the pandemic, including paying more attention to their overall well-being and lifestyle choices.
But awareness alone isn’t enough, which is where BranchLab comes in, Armstrong said.
“They can act upstream on the pharma side to get new drugs and therapies into the hands of patients much earlier and with more precision,” he said. “It’s not just about access; it’s about reaching people earlier in their care journeys and doing it in a privacy-conscious way.”
Staying the course
BranchLab will use the majority of its new funding to hire more data science and AI engineers.
“Those folks tend to be pretty expensive these days,” Walsh said.
But the relationship with Next Ventures is about creating a strategic partnership more than just having it serve as a source of capital. The investment was primarily opportunistic, and the plan, he said, is still for BranchLab to pursue its Series A, likely sometime early next year.
“We’re just on our same trajectory, which is building infrastructure that protects consumer privacy,” Walsh said. “We’re not selling data; we’re selling a service layer that makes your data more useful.”
Still, we live in a, shall we say, weird world made weirder and more unpredictable by a secretary of health who rejects mainstream vaccine science while pushing his controversial MAHA plan to tackle chronic disease through prevention and lifestyle changes.
So, what’s it like operating a health-focused venture fund with RFK, Jr. as the US health czar?
“There are pieces you have to root for and other pieces … well,” Armstrong said. “We just have to find ways to work within the system, and it might be a different system in three years. Regardless, it can’t stop us from trying to do the best work and helping the most people we can.”
