Pre-AI startups are receiving less investor attention, but not all SaaS companies face the same fate. Workflow SaaS can be replicated more easily, while a data provider at its core is harder for AI to replace. H1 collects detailed physician data globally and sells it to pharma companies, hospital systems, and health insurers. The CEO expects AI model makers to become customers for that data rather than competitors. CVS Health Ventures led a $40 million funding round, reflecting confidence in H1’s durability. H1 turned cash flow and EBITDA profitable, forecasted growth above 40%, and pursued profitability after earlier high valuations in 2021. It also expanded through acquisitions.
"“If you're a workflow SaaS company, you could vibe code that,” he told TechCrunch. What AI cannot easily replicate, according to Katz, is a company that is a data provider at its core. That's a self-serving viewpoint - H1's entire business is built on selling detailed information about doctors to pharma companies, hospital systems, and health insurers - but it doesn't mean he is wrong."
"“I don't worry about Claude ever doing what we do,” Katz said, referring to Anthropic's popular AI model. He thinks that the data H1 collects on physicians globally could actually be so valuable to AI model makers that they are more likely to become customers than competitors."
"CVS Health Ventures, the corporate venture capital arm of the CVS/Aetna health giant, must agree that H1 is in no danger of becoming a victim of the “SaaSocalypse.” The investor just led a $40 million round into H1. H1 wasn't looking to raise capital, Katz said. The startup turned cash flow and EBITDA profitable last year and is forecasting to grow over 40% this year."
"H1 was last valued at $750 million when it raised $100 million in funding led by Altimeter Capital at the height of the Covid-era tech bubble in November of 2021. Like other companies that secured capital just before valuations plummeted in 2022, H1 has focused on becoming profitable. The startup has also grown through acquiring smaller competitors and complementary businesses."
Read at TechCrunch
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