Derek Streat, CEO of the fast-growing healthcare patient demand and access platform DexCare, is a startup veteran with 25 years of experience under his belt.
With capital markets somewhat frozen, Streat drew on his vast experience during a recent fundraising effort, one that resulted in the Seattle company announcing $75 million in funding this week. Streat’s blunt take on the current venture capital market: “It’s pretty rough out there,” he said.
In fact, Seattle startups experienced a 6-year low in venture funding during the first quarter, as investors responded to higher interest rates and declining tech stock values by reducing their investment pace.
Even still, DexCare — a spin out of health care giant Providence which reported a 1000% increase in recurring revenue over the past two years — was able to attract investors at a valuation that was “a very healthy increase from the prior round.”
We caught up with Streat — who previously led companies such as C-SATS and AdReady and is former entrepreneur-in-residence at Seattle venture firms— to discuss fundraising, hybrid work, generative AI, and more. The conversation was edited for brevity.
GeekWire: Thanks for chatting with us, Derek. After raising in this environment, how is it different than the past companies you started?
I’ve been building companies for 25 years, and I found that if you’ve got a good company, market, team and traction — you can get over those hurdles. Quite frankly, when the environment gets more discerning, there’s just a lot less supply. The demand never seems to go down, even in a downturn. If you’re one of those companies that held it together, it actually gets a little bit better.
Are you feeling the impacts of a downward economy on your business?
We help extend the capacity of our customers’ existing resources, with more intelligent matching and load balancing orchestration. That extends their capacity by about 40% without having to add new resources. Clients are able to take care of more patients and earn more money without having to hire more people, which lowers their marginal cost per visit. The tighter the financial environment gets, the more resonant our value proposition becomes.
Can you explain how DexCare incorporates generative AI into the product?
We use quite a bit of sophisticated, AI-driven decisioning in our platform now so we can ensure patients are matched with providers and settings that will yield best outcomes, fastest visit durations, best issue resolution, lowest costs, most balanced utilization across the network, etc. All those models take training, and generative AI enables us to generate and synthesize data, as well as build the models, faster.
How are you navigating remote work vs. in-person at DexCare, and what advice do you have on that front?
Our strategy is to embrace what the tech community is doing at large, which right now is hybrid. With people spread across the country, not everyone can come into the office a couple days each week, but those that are in the Pacific Northwest do. It’s working well in terms of better collaboration and strategy alignment.
What has been the biggest obstacle navigating your fast growth?
Keeping up with demand. Enterprise healthcare is demanding, serious business with rate limiters that span well beyond the technical to political barriers and change management. It requires lots of people and processes along with the tech, and that’s always challenging to scale quickly.
What advice would you give to entrepreneurs raising capital right now?
Pretty basic stuff…Don’t if you don’t have to, be realistic on valuation, minimize burn, ride out the storm.
