Our Investment in Ferrum Health

Our healthcare system stands at a critical juncture. Skyrocketing costs, widespread physician burnout, and overwhelming administrative complexities lead to limited access to quality care and, ultimately, compromised patient outcomes. Health systems are acutely aware of these issues and urgently seeking a better way forward. The promise of technology, particularly AI, offers the potential for transformation toward a more efficient and effective healthcare system.

If data is the fuel of AI, our healthcare system is sitting on an untapped oil field of epic proportions. Healthcare produces 30% of the world’s data volume: more than 2 zettabytes (that’s 2 trillion gigabytes!) annually. By 2025, healthcare data volume is expected to grow at a compound annual rate of 36%. 

This mountain of data, however, has not yet translated to better healthcare outcomes because most of it sits dormant. According to the World Economic Forum, 97% of the data produced by hospitals each year goes unused. This is rapidly changing, however, with an estimated $83 billion invested in FDA-cleared healthcare AI models, not to mention the volume of models in the FDA-clearance process. 

With this growing supply and arguably existential demand, one would expect significant adoption in this market. But…healthcare. Stringent patient data regulations, antiquated IT infrastructure, and persistent budget constraints create a massive bottleneck to the deployment of technology in healthcare. As for AI, adoption by health systems has been slow, currently estimated at just 5% of approved use cases.

Ferrum Health is building the platform to solve the adoption problem for AI deployment. Think “Plaid for healthcare AI” or, in Foundry parlance, “glue” for healthcare AI. 

Ferrum’s platform offers validation, orchestration, security, and management capabilities to enable health systems to securely and scalably deploy AI. The platform is vendor-neutral and privately deployed. It empowers clinicians to validate the performance of AI on local datasets and deploy AI more broadly into their existing workflows, all without protected health information (PHI) leaving the health system firewall. Ferrum is starting with imaging AI, serving specialties including radiology, oncology, neurology, musculoskeletal, women’s health, and cardiology.

With Ferrum, health systems are deploying AI to augment providers. This powerful combination of humans and technology can lead to earlier and more accurate detection, better health outcomes, and reduced cost of care. One early health system partner saw a 77% higher rate of early lung cancer detection using AI models delivered through Ferrum. The company powers these outcomes in a cost effective way, delivering a 75% reduction in internal IT staffing and compute costs and a 98% reduction in AI implementation timelines, from an average of six weeks to less than a day. 

Ferrum was co-founded by Pelu Tran (CEO) and Kenneth Ko (CTO) in 2018. Prior to Ferrum, Pelu was co-founder of Augmedix, also bringing technology to the clinical setting. Pelu was inspired to start Ferrum after a missed diagnosis resulted in the death of a loved one. The company’s mission is simple and deeply aligned with their health system customers: to achieve better patient outcomes.

At Foundry, we believe in the power of technology to unlock and augment human potential in critical industries and use cases. We’ve seen this first hand in healthcare through our investments in Meru Health (improving provider capacity and patient outcomes through a digitally native mental healthcare solution) and Regard (closing the clinical insights gap through an AI-powered physician co-pilot focused on documentation and diagnostics). 

To accelerate the company’s growth and to address these market needs, we recently led Ferrum’s $16M Series A, alongside Catalyst by Wellstar, Headwater Ventures, UnitedHealthcare Accelerator, and our friends at Urban Innovation Fund, who were seed investors and helped introduce us to the company. You can learn more about Ferrum and the financing here.

We’re thrilled to partner with this mission-driven team in unlocking the power of AI to transform our healthcare system.