Since its founding in 2021, OpenEvidence has raised nearly $700 million. Last month, the Miami-based company closed a $250 million series of funding that valued it at as much as $12 billion.
What makes this startup so attractive to investors?
They point to OpenEvidence's bottom-up, physician-first model, which has prompted more than 430,000 doctors to sign up for the service. The startup provides clinicians with a free, AI-powered search platform that provides them with answers to their medical questions—and they can easily access it by signing up directly, without having to go through hospital IT or a lengthy enterprise sales process.
This drives rapid adoption and daily engagement among clinicians. This scale, coupled with strong pharmaceutical advertising profitability, seems to have investors convinced that OpenEvidence is becoming the default platform for doctors to obtain medical knowledge.
Put doctors first
OpenEvidence CEO Daniel Nadler said his company is unique because it develops products for doctors rather than hospital CIOs.
“Physicians enrolling directly allows us to be there for them wherever they go – in the hospital, between shifts, on the way to work, at night when reviewing patient files,” he said.
Nadler explained that from its conception, OpenEvidence has been focused on earning the trust of clinicians and making it clear that the platform is designed to meet their needs.
“Physicians know we’re working with them and we’re aligned with them — we’re active in the community, we’re in constant dialogue, we listen to their feedback and ideas,” he said.
The tool is gaining traction with all physicians, from new residents to esteemed physicians, with notable users including Dr. Robert Wachter, chair of the Department of Medicine at UCSF, and Dr. Aneesh Singhal, associate director of neurology at the Massachusetts General Hospital Stroke Center.
Nadler noted that clinicians appreciate OpenEvidence's content and data partnerships with peer-reviewed medical sources they already trust, including JAMA, the American Medical Association and the New England Journal of Medicine. Doctors know how the platform looks for answers.
Nadler added that appeal to doctors has led to large-scale clinical use, and said OpenEvidence users ask questions at least once a day on average.
Last year, an independent study involving more than 1,000 doctors in 106 specialties found that 45% of their reported AI use came from OpenEvidence.
“Doctors are savvy consumers. Some medtech companies may be able to fake activity through email engagement, but you can't fake the number of clinical conversations doctors are having in OpenEvidence – which is now over 20 million per month. We had over 900,000 conversations in one day last week,” Nadler declared.
With all due respect to Nadler and the entrepreneurs who intend to make a difference in healthcare, pretending it is the way to go for many startups is fair to say. Many people take a “fake it 'til you make it” approach, and for more serious criminals, pretending can land them in jail, like Elizabeth Holmes. The founder of Outcome Health is another example where one was sentenced to prison and another was sent to a halfway house. Both companies were once healthcare unicorns, with the latter's revenue model somewhat similar to OpenEvidence's.
bottom-up approach
In an interview last month about the trends shaping this year's digital health investment landscape, Morgan Cheatham, partner and head of healthcare and life sciences at Breyer Capital, cited OpenEvidence's bottom-up adoption model as a key advantage. He said this approach resonates in today's market, where real-world engagement is more important than aggressive sales cycles.
Cheatham believes OpenEvidence should go directly to users with products they like and trust, rather than going through the slow and complicated procurement process in health systems. Other companies that provide medical evidence at the point of care, including Atropos Health and DynaMed, also sell products to health systems.
This strategy isn't entirely new—Doximity has also grown rapidly by reaching out directly to physicians and built one of the largest clinician networks in the country. But investors see OpenEvidence as different because it's embedded in everyday clinical decision-making, not just networking and professional communications.
Cheatham noted that in a bottom-up model, the tool is typically quickly adopted by clinicians and then rolled out across institutions.
Another investor, Katie Jacobs Stanton, general partner at Moxxie Ventures, which has not yet invested in OpenEvidence, agreed.
“While institutional adoption remains important, the strongest healthcare companies are driven by the pull of clinicians and caregivers who feel the pain directly. This bottom-up demand creates trust, habit, and defensiveness in a system where attention and workflow access are scarce. When products are embedded in how care is actually delivered, scale will naturally follow,” she explained.
Stanton added that investors are increasingly looking for companies that solve “the most difficult and important problems” in health care, including diagnosis, treatment, patient safety, referral and claims. She said investors have a lot of interest in technology that can help clinicians do their jobs better, ultimately improving patient outcomes.
Revenue models offered
It's clear that doctors are turning to OpenEvidence to answer their questions, but they're using it for free, which begs the question: How does this startup make money? How does it make enough money to justify a $12 billion valuation?
Of course it's advertising.
Michael Robinson, partner and head of the investment team at Craft Ventures, which participated in OpenEvidence's Series D round last month, explained that OpenEvidence makes money by selling ads to pharmaceutical companies on its platform.
“We studied [total addressable market] for digital pharma ad spend. The U.S. pharmaceutical digital advertising market is worth approximately $20-25 billion, not including global expansion. As query volume increases, it brings more ad inventory that can be monetized,” Robinson explained in an emailed statement.
According to its privacy policy, OpenEvidence collects information about how clinicians use the platform, including engagement on specific topics and device data. This data can then be used to tailor ads to each user's expertise and interests.
OpenEvidence CEO Nadler noted that the way all AI searches work is that it takes a few seconds to find and collect the evidence used to generate an answer.
“We use this moment to show ads. The reason doctors don't find this intrusive is that they have to wait for answers during that time anyway. Advertisements and answers are always separate – once the answer is generated, the ads disappear,” he explains.
Robinson noted that OpenEvidence is “one of the fastest companies” to hit $100 million in revenue in less than 12 months—faster than other major AI companies like Wiz, Sierra, and Perplexity, and certainly the fastest among healthcare-focused AI companies.
“There's huge potential here and they're already partnering with big pharmaceutical companies who have said they want to increase their spending,” Robinson said.
He added that the user base is not only growing, but engagement is also high, and total monthly searches continue to increase.
This helps differentiate OpenEvidence's bottom-up physician adoption model from Doximity's approach – essentially, physicians use OpenEvidence more frequently, so they are more likely to be exposed to ads on the platform.
As for further growth potential, Robinson noted that OpenEvidence is initially focused on the U.S. physician market, but is also making inroads into other user groups such as pharmacists, nurses, and medical students, in addition to leveraging the platform's multilingual capabilities to expand globally.
Product expansion could also be another opportunity for future growth, Robinson noted. OpenEvidence can continue to roll out new products that integrate into physician workflows to help with tasks such as documentation and care coordination.
What's in front?
Robinson believes OpenEvidence can maintain its competitive advantage because its value proposition is aligned with both doctors and pharmaceutical companies. For doctors, the platform is free, easy to use, and trustworthy. For pharmaceutical manufacturers, ads can be served at search time, when intent and engagement are high.
Robinson said this allows the company to be “more precise than other channels.”
In his view, the startup’s Series D financing validates the trend of industry leaders raising huge rounds of financing.
“We are seeing more investment dollars concentrated in consensus winners. Companies are becoming recognized category winners for shorter periods of time and are driving huge rounds in rapid succession. This is true in every category, not just healthcare,” he said.
Nadler said he sees time as the company's main competitor in the future. Nadler described the company's top priority as “getting it into every doctor's hands in a timely manner” to benefit patients.
To this end, the startup will continue to invest in high-quality content partnerships with trusted medical information owners and will leverage its growing scale for improvements.
“Each question represents a gap in clinical knowledge and understanding and provides us with an opportunity to fill that gap. Additionally, every clinical conversation in OpenEvidence increases our understanding of how physicians reason about difficult clinical questions. The benefits of this are clear – exposure to clinical thought processes at our scale allows us to learn from them and in turn use it to improve reasoning for any and all clinical questions,” he explained.
Doctors love it, pharmaceutical companies are funding it, and investors are paying attention—only time will tell whether OpenEvidence can maintain and solidify its dominance.
Photo: PM Images, Getty Images
