Latest news with #SummaHealth
Forbes
27-05-2025
- Business
- Forbes
This Top VC Wants To Use Main Street America As An AI Lab
Sitting in the offices of General Catalyst, overlooking Oracle Park—where the San Francisco Giants play—and the sweeping bay stretching beyond it, CEO Hemant Taneja explains how his venture capital firm is going to transform how Americans access health care: by buying and running a hospital. Last year, the firm announced its $485 million purchase of Summa Health, an 8,000-employee hospital system based in Akron, Ohio, with the aim of plugging it into Silicon Valley's innovation engine. That means injecting tech and artificial intelligence into almost every step of the health care process, from checkups to insurance. No hospital system was going to do this on its own, so the thinking was simple: 'We have to go buy one and do it ourselves,' Taneja says. 'And live it.' That ballpark view is fitting because Taneja, No. 8 on this year's Midas List, Forbes' annual ranking of America's top venture capitalists, is no stranger to proverbial big swings (even if the India-born Taneja prefers cricket). Buying a hospital is jaw-dropping for a VC. Tech investors preach disruption, but they are deeply conservative when it comes to running their own funds. Little has changed since venture's grandfather, Arthur Rock, started cutting funding checks to the likes of Intel and Apple. Entrepreneurs such as Gordon Moore and Steve Jobs might 'think different,' but Rock himself was a buttoned-down Harvard MBA who started his career on 1950s Wall Street. General Catalyst wants to break that mold. Since 2018, it has morphed from a typical VC partnership to a multi-hyphenate investment house: There's the firm's 'creation' fund, which spins up new AI companies aimed at remaking dusty industries like accounting or customer service. Then there's the General Catalyst Institute, a think tank looking to shape technology policy around the world, and GC Wealth, a white-glove broker meant to woo well-heeled founders away from private banks. That makes Taneja, 50, one of the champions of a new class of venture capitalist. 'Mega funds' are the sometimes-sniffy label for General Catalyst and peers like Andreessen Horowitz, Lightspeed and Thrive Capital, Josh Kushner's outfit. Mana-ging tens of billions of dollars, they are still minnows compared to Blackstone ($1 trillion in assets) and KKR ($660 billion), but Taneja's ambition isn't to be the biggest investor. Instead, he wants General Catalyst to be a 'strategic conglomerate.' Says Neil Sequeira, a former General Catalyst managing director: 'It's an exciting new animal.' Taneja has his critics, too. General Catalyst's industrial-scale investing barely resembles venture capital, some say. Others snipe, discreetly, about General Catalyst's focus shifting from generating returns from financing startups to 'farming fees' from ever-multiplying funds. Taneja's supporters are willing to back his bold vision thanks to a near-15-year winning streak. Since moving to Silicon Valley from Boston in 2011, Taneja has backed payment giant Stripe (last valued at $91 billion), defense startup Anduril (in funding talks at a $28 billion valuation) and a string of health care unicorns like Commure (valued at $6 billion). General Catalyst tapped its backers for $8 billion last year—more than some Midas List veterans have raised in a lifetime, cementing its status as a venture powerhouse. Assets have ballooned to over $36 billion from $3.8 billion just 10 years ago. And the scaling is accelerating: General Catalyst, along with archrival Andreessen Horowitz, claimed around 20 cents of every dollar invested with U.S. VCs last year, according to Pitchbook data. Silicon Valley gossip normally focuses on which startup will go public next, but recently chatter has circulated that General Catalyst itself will have an IPO. Taneja flatly denies the rumors. 'It's not even on the agenda,' he says. 'We've never discussed it.' For a VC firm, Taneja has loads of money on tap, but his grand strategy may require even larger amounts. Blackstone, KKR and Apollo grew more than tenfold after going public as they used their freshly minted shares to fuel growth, fund takeovers and cash out old partners. But there's still a taboo around venture funds going public: Valley graybeards still remember dot-com bomb Internet Capital Group listing on Nasdaq in 1999. The VC shop's valuation ballooned to nearly $60 billion before plunging 99.5% in less than two years. Taneja now rubs shoulders with business leaders, prime ministers and royalty (he cohosts an annual ball at new hire Jeannette zu Fürstenberg's family castle in Germany). It's a long way from the aisles of the suburban Massachusetts CVS where he worked in high school to help his parents make ends meet. When he was 15, his parents moved to Boston from New Delhi. During the recession of the early 1990s, his father wound up managing a KFC. 'I probably ate that almost every day,' he says. 'I can't look at a KFC anymore.' After high school, he landed at MIT. He cofounded and sold a mobile software startup after graduating, landing him on the radar of General Catalyst cofounders Joel Cutler and David Fialkow in 2001. The pair were looking for a founder to kickstart new business ideas. 'He was the full package. We knew early on that Hemant could be a tremendous leader,' Fialkow says. General Catalyst had a handful of early wins like travel booking site Kayak (which went public for $1 billion in 2012), but its East Coast base was away from the entrepreneurial center of Silicon Valley. So in 2011, the firm's founders tapped Taneja, along with a handful of other partners, to build a beachhead in Palo Alto. He had his work cut out for him. Taneja's outsider status was apparent when he was elbowed out of an early Snap investment by Valley vets. His fortunes changed after an early Stripe hire sat in on a guest lecture Taneja gave at MIT and connected him with the startup's cofounder brothers, Patrick and John Collison. He first invested in 2010, then led the startup's Series B two years later. While Stripe's cofounders initially saw the company as a 'little developer-oriented credit card payment thing,' Taneja saw the bigger opportunity in simplifying digital transactions more generally, CEO Patrick Collison says. 'He perceived more in Stripe than we did.' (Taneja got into one of Snap's later rounds, too.) Taneja's new path was set over a bottle of Brunello during a 2017 dinner at Vicolina, a now-shuttered Manhattan trattoria, with Ken Chenault. The former Amex CEO had just been hired as General Catalyst's chairman, partly to help manage the handover from the fund's cofounders to heir apparent Taneja. As they dined, Chenault, who was one of the first Black executives to run an S&P 500 company, leaned across the table and pressed Taneja on what he wanted his impact to be. 'I want to be a leader, not just in business,' Chenault recalls Taneja telling him. To some, General Catalyst's strategy looks like private equity with a coat of shiny AI paint. Taneja took over as CEO in 2021 and began transforming General Catalyst from a clubby partnership into a firm that could address social problems. Goodbye to Mark Zuckerberg's motto of 'move fast and break things.' Hello 'responsible innovation.' It's not as catchy, and it hasn't always earned Taneja a warm reception from some of the Valley's loudest voices and deepest pockets. General Catalyst's advocating for guardrails on new AI systems was met with hoots of disapproval, notably from Andreessen Horowitz billionaire cofounder Marc Andreessen. 'They're very smart, they're very opinionated. All that is positive in my book,' Taneja says of the rival firm. 'They're playing a different game than us.' (Behind closed doors, Andreessen and Taneja played nice when they both sat on the board of now-public freight tracking company Samsara, says CEO Sanjit Biswas.) Guardrails or not, AI is central to the firm's strategy of doing rollup mergers in sectors long considered too stodgy for Silicon Valley, like IT services and human resources. Buyout funds have been doing this for decades, cutting costs by moving jobs offshore. Taneja wants to use AI. Last year, a General Catalyst startup called Crescendo bought PartnerHero, a $80-million-a-year call center company, and automated calls with bots, handing over only tricky cases to human workers. The result is as much as 30% savings for customers, says Crescendo CEO Matt Price. Dwelly, a London-based real estate startup cofounded by General Catalyst, bought a handful of property management companies and added AI tools for managing open houses and maintenance requests. Not only is AI cheaper, but the wait for fixes for leaky taps and other repairs is down 40% to 30 days, says Dwelly CEO Ilia Drozdov. To some, the strategy looks like private equity with a coat of shiny AI paint. Taneja shrugs off the notion, saying that while private equity is more focused on cost-cutting, General Catalyst's rollups are about instilling a culture of 'innovation,' albeit the type that also happens to cut costs. Taneja is the driving force behind these rollups, and he wants General Catalyst to cofound the firms executing them. The lodestar is Livongo, the diabetes management startup he cofounded in 2014. It went public in 2019 for $3.6 billion. That would be a home run for most investors, but Taneja was just warming up. A year later, Livongo was acquired for $18.5 billion by Teladoc, resulting in a paper gain of $3.4 billion for the fund. The outsize return was almost entirely thanks to General Catalyst's large ownership stake (18.3%) as a cofounder. Still, Taneja is treading a difficult path. He needs to overcome local protests against his yet-to-close hospital takeover before turning around the $2 billion (2024 revenue) operation. And while Taneja is a savvy investor, he's by no means infallible. A series of bets on climate startups resulted in a $100 million wipeout, and health insurance claim specialist Olive, once valued at $4 billion, is a total bust. And General Catalyst ended up banking only an estimated $1.8 billion from Livongo, with Teladoc's share price crashing 97% from its peak. But perhaps the biggest risk is that General Catalyst is doing too much. 'I get that question a lot,' Taneja says. He says it's a matter of having 'leadership bandwidth' and a good operating model, comparing the company to Amazon, which expanded from books to data centers to grocery stores to moviemaking. Taneja has stretched himself to the brink in the past. At MIT, his counselor warned the triple major (computer science, biology and math) that he might not finish with such a demanding courseload. He not only graduated but went on to earn master's degrees in engineering and operations research a few years later. It's a pattern he has carried with him throughout life, Taneja says, laughing. 'I'm always trying to do too many things at the same time,' he says. 'I push myself to the max.'
Yahoo
25-05-2025
- Health
- Yahoo
Group awaiting approval of Summa purchase shares extensive vision for using AI
The venture capital firm bankrolling Health Assurance Transformation Company's purchase — pending regulatory approval — of Summa Health has been lobbying U.S. government officials for new health care policies espousing greater use of artificial intelligence in medical settings. HATCo owner General Catalyst has published a range of materials advocating for policies encouraging health care providers to use AI while delivering care and equip patients with AI to monitor vital signs in their daily lives. In 2024, General Catalyst launched an initiative called the General Catalyst Institute. The institute published a March report that said AI could be implemented throughout the entire health care system — with the federal government getting rid of regulations that General Catalyst and its allies see as burdensome. The integration of AI into health care is among the chief concerns opponents of the Summa deal have expressed about the potential HATCo ownership, with fears that it will result in less attentive care and the elimination of jobs. One of the proposals in the GCI paper — which General Catalyst spokesperson Molly Gillis said via email was "drafted in collaboration with over two dozen healthcare experts and entrepreneurs" — is for the U.S. Food and Drug Administration to "create an expedited pathway for reviewing and approving AI-driven healthcare solutions." The paper also shares the firm's vision of the U.S. Department of Health and Human Services broadly supporting the "Make America Healthy Again" movement championed by President Donald Trump and Robert F. Kennedy Jr. For example, the paper said the department can create "regional healthcare innovation sandboxes" that would test "interventions that address root causes of chronic disease, including environmental factors and food additives, while maintaining rigorous scientific standards." Gillis, partner and chief of staff at General Catalyst, said the General Catalyst Institute is nonpartisan. She did not directly answer a Beacon Journal reporter's question about whether General Catalyst is concerned about Kennedy, the HHS secretary — opposing vaccines, questioning antidepressants and advocating for the removal of fluoride from public water. The effectiveness of multiple vaccines and antidepressants has been thoroughly tested and is widely agreed upon in the medical community, while new drugs go through multi-tiered government approval processes. Fluoride is added to water to prevent cavities, according to the U.S. Centers for Disease Control and Prevention. "Our engagement in Washington reflects our belief that healthcare transformation requires input from leaders across the public and private sectors, regardless of who is in office," Gillis said. More broadly, Gillis said, "General Catalyst's commitment to fulfilling and accelerating the promise of Health Assurance, which prioritizes and incentivizes keeping people well, remains steadfast. We strongly believe that accelerating innovation and advancing value-based care through patient-centered solutions will create better health outcomes for all Americans." Summa spokesman Mike Bernstein said via email that Summa is fully aligned with General Catalyst and HATCo's vision of creating a new health care model "that transforms the current sick care system into a resilient, proactive system designed to help people stay well, reduce cost through innovation and make quality care more affordable and accessible for everyone. We view this work as non-partisan and we seek feedback from people throughout the public and private sectors, regardless of who is in office or what political affiliations they hold." Summa leaders could not directly address the GCI report, Bernstein said. General Catalyst Institute also praised decisions surrounding AI by the Trump administration in a March 14 letter to the National Coordination Office at the U.S. government's Networking and Information Technology Research and Development Program. "President Trump has demonstrated his commitment — and that of his administration — to strengthening American leadership in the global AI race in a variety of ways, including prioritizing the appointment of the first ever White House AI Czar in David Sacks, and nominating and appointing many qualified individuals to shape and implement his administration's policies across this important topic," the letter said. While the March 14 letter was not fully focused on health care as the GCI report was, it cited health care as an area where AI could be applied, stating that AI can "analyze medical data, help with diagnostic tools, predict disease outbreaks, and personalize treatment plans." Matthew Charlebois, who is opposed to the proposed Summa-HATCo deal and a member of the Summa Is Not For Sale coalition, said it was "not surprising at all" to him that General Catalyst would try to curry favor with the Trump administration. "If Kamala Harris won the election, they would do something similar with her administration in terms of trying to win their support," Charlebois said. But as far as General Catalyst's proposals themselves, he said, "It very much sounds like Akron and Summa in particular is being used as an experimental guinea pig subject to test out these largely unproven scientific experiments with regards to implementing AI technology into health care." Charlebois said General Catalyst wants "less regulations on the health care industry so they can extract more profits from patients and they can work their workers even harder." The General Catalyst Institute wrote in the March 14 letter, "The adoption of intelligent AI agents allows humans to focus on work that requires creativity, emotional intelligence, and complex decision-making. As this trend continues, managing AI agents will likely become a new function, or part of an expanded role." Summa's Bernstein said, "Importantly, technology will be used to support and empower our workforce, not replace it, so that clinicians and staff can focus fully on what matters most: delivering compassionate, high-quality care. "As part of this transformation, we remain committed to investing in our people through workforce development, clinical training and enhanced engagement, recognizing that they are vital to our long-term success." Hemant Taneja, General Catalyst's CEO, and Dr. Stephen Klasko, an adviser to the firm and former president and CEO of Thomas Jefferson University and Jefferson Health, in 2020 wrote a book called "UnHealthcare." In it, they proposed that a new "health assurance" system could replace the "sick care" system. "Building health assurance is one of the greatest business opportunities in history," they wrote. "How often in any generation does a multi-trillion-dollar global industry go through a reinvention?" Many of the proposals listed in the book focus on using technology to detect symptoms so physical health assurance locations don't get crowded, consumers can make more choices about their health to improve their wellbeing and hospitals can lower costs. "Failure to take medications is one of the chief reasons patients end up back at a doctor's office or emergency room," the authors wrote. "Soon, pills will contain a tiny ingestible chip that can tell an app whether you're following through." Later in the book, Taneja and Klasko wrote, "AI-driven chat bots will 'talk' to mental health patients — we already know that many younger people are more likely to be honest with a chat bot than a psychologist. AI will help keep an eye on seniors 24/7, enabling them to live at home longer." In its March report, the General Catalyst Institute addressed concerns about privacy, safety and security as it proposed the rollout of AI throughout the health care system. Ensuring privacy, for instance, would be done in part through data encryption and anonymization, the paper said. A document signed by Summa and HATCo leaders said HATCo and its affiliates will encourage portfolio companies to "locate their headquarters in the Summa Community." The Beacon Journal obtained the report from the Ohio Attorney General's Office, which is reviewing the proposed sale. Charlebois said he doesn't see how patients, workers and the community would benefit from General Catalyst's AI push. "None of these are proposals that are about meeting the needs of Akronites," Charlebois said. "All these are proposals about, 'How can we profit our portfolio companies and ourselves and take over the health care industry and run it like a for-profit corporation?'" Meanwhile, Summa is already using AI for multiple services, Bernstein said, citing "sepsis detection, transcription, radiology interpretation and lung cancer screening." The hospital system uses a "comprehensive vetting process" before implementing new technologies, Bernstein said, adding that these are technologies from various companies, including some in General Catalyst's investment portfolio. He declined to name specific General Catalyst portfolio companies that provide the technologies, citing that "we are still in the early stages of this work and still in regulatory review" with the acquisition deal. Other Northeast Ohio hospital systems are using similar technologies, too. University Hospitals radiologists interpret results with AI, and Cleveland Clinic uses AI to transcribe provider-patient interactions. Providers from both hospital systems have talked positively of the technologies. Charlebois said Summa employees in inpatient and outpatient patient care settings have joined the Summa Is Not For Sale coalition. He declined, however, to share how many Summa employees have joined the group — saying they all want to remain anonymous. Gillis said General Catalyst's work over the past several years has had a priority of "making healthcare more accessible and affordable for all Americans." "As we work towards finalizing our transaction with Summa Health, which includes maintaining its charity care policy, community benefit, and essential services, our vision is to reimagine and evolve healthcare to work better for patients, providers, and communities in the Greater Akron region and across America — through partnership, innovation, and an unwavering focus on health outcomes for all people," Gillis said. Patrick Williams covers growth and development for the Akron Beacon Journal. He can be reached by email at pwilliams@ or on X, formerly known as Twitter, @pwilliamsOH. Sign up for the Beacon Journal's business and consumer newsletter, "What's the deal?," at This article originally appeared on Akron Beacon Journal: HATCo owner General Catalyst would bring heavy AI focus to Summa
