Olive, one of the biggest and a well-funded AI startup, which had raised $848 million and a valuation of $4 billion shuts down its operations, and has sold the remainder of its assets. The company laid off 450 employees last July and had about 630 employees remaining before the most recent round of layoffs, as per Axios.
Details
Colombus, Ohio, based AI company Olive has sold its remaining business lines to Waystar and Humanta Health and is closing business operations as per the memo released on Olive’s website.
- “Olive is announcing that it has sold its Clearinghouse and Patient Access business units to Waystar and its Prior Authorization business unit to Humata Health.”
- “With the sale of our core business units, Olive will wind down the remainder of its business.”
As stated in the memo.
Olive’s Backstory
Olive was valued at $4 billion and had raised $800 million+ in venture funding from high-profile firms like General Catalyst, Vista Equity Partners, and Tiger Global, it was the highest-profile startup in healthcare automation.
What was Olive supposed to do?
- Olive’s solutions were supposed to speed up the time-consuming process of revenue cycle management (RCM) tasks for health systems and insurers such as prior authorizations and patient verifications.
- In just 10 years Olive promised to reduce its client’s administrative spending by roughly 5X the cost of installing the software which got the attention of some of the largest health systems in the U.S.
- Olive’s sales process consisted of evaluating a health system’s processes to assess potential savings.
- Olive claimed to automate administrative tasks for pharmacy and supply chain management and said its efforts in those categories employed AI and machine learning.
What went wrong?
Olive relied on rough estimations for its calculations and inflated its capabilities but failed to deliver on those promises. The savings it promised to clients were based on rough estimates and the company did not comprehensively track its progress unless a customer specifically requested it. As per an investigation by Axios.
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