OpenEvidence has raised nearly $700 million since it was founded in 2021. Last month, the Miami-based company closed a $250 million Series funding round that brought its valuation to a whopping $12 billion.
What about the startup has so captivated investors?
They point to OpenEvidence’s bottom-up, doctor-first model, which has prompted more than 430,000 doctors to sign up for the service. The startup provides clinicians with a free AI-powered search platform that gives them answers to medical questions — a platform they can access easily by signing up directly, without going through hospital IT or lengthy enterprise sales processes.
This drives fast adoption and daily engagement among clinicians. That scale — combined with strong pharmaceutical ad monetization — appears to have convinced investors that OpenEvidence is on the path to becoming the default platform that doctors go to for medical knowledge.
Putting doctors first
OpenEvidence CEO Daniel Nadler said his company is unique because it is building its product for doctors, not hospital CIOs.
“Doctors sign up directly, allowing us to be by their side and help them wherever they go — in the hospital, between shifts, on their way to work, at night when reviewing patient files,” he stated.
Nadler explained that from its conception, OpenEvidence has been focused on earning clinician trust and making it clear the platform is designed to meet their needs.
“Doctors know that we are working with them and that we are aligned with them — we are active in the communities, we are in constant conversation, we listen to their feedback and their ideas,” he remarked.
The tool is gaining traction among all doctors, from new residents to esteemed physicians — with notable users including Dr. Robert Wachter, chair of the department of medicine at UCSF, and Dr. Aneesh Singhal, vice chair of neurology at Massachusetts General Hospital’s stroke center.
Nadler noted clinicians appreciate that OpenEvidence has content and data partnerships with peer-reviewed medical sources they already trust, including JAMA, the American Medical Association and the New England Journal of Medicine. Doctors know how the platform is sourcing its answers.
Appealing to doctors has led to clinical use at scale, Nadler added, saying that on average, OpenEvidence users ask a question at least once a day.
Last year, an independent study involving more than a 1,000 physicians across 106 specialties found that 45% of their reported AI usage was on OpenEvidence.
“Physicians are savvy consumers. Some healthtech companies might be able to fake activity with email engagement, but you can’t fake the number of clinical conversations physicians are having within OpenEvidence — now over 20 million per month. We had over 900K one day last week,” Nadler declared.
With all due respect to Nadler and entrepreneurs intending to make a difference in healthcare, it could be argued that faking it is a rite of passage for many startups. Plenty have taken the “fake it til you make it” approach, and for worse offenders, faking it has landed them in prison, like Elizabeth Holmes. The founders of Outcome Health are another example, with one sentenced to prison and another sent to a halfway house. Both companies were once healthcare unicorns, and the latter’s revenue model is somewhat similar to that of OpenEvidence.
Bottom-up approach
In an interview last month about trends shaping this year’s digital health investment landscape, Morgan Cheatham, partner and head of healthcare and life sciences at Breyer Capital, pointed to OpenEvidence’s bottom-up adoption model as a key strength. He said that approach resonates in today’s market, where real-world engagement matters more than aggressive sales cycles.
Instead of navigating slow, complex procurement processes at health systems, Cheatham thinks it’s wise for OpenEvidence to reach users directly with a product they like and trust. Other companies providing medical evidence at the point of care, including Atropos Health and DynaMed, sell to health systems.
The strategy isn’t entirely new — Doximity also grew quickly by reaching doctors directly and built one of the largest clinician networks in the U.S. But investors see OpenEvidence as distinct because it is embedded in day-to-day clinical decision making, not just networking and professional communication.
Under the bottom-up model, the tool often gets adopted by clinicians quickly and then later scaled across institutions, Cheatham noted.
Another investor — Katie Jacobs Stanton, general partner at Moxxie Ventures, which has not invested in OpenEvidence — agreed.
“While institutional adoption still matters, the strongest healthcare companies are driven by pull from clinicians and caregivers who feel the pain firsthand. That bottoms-up demand creates trust, habit and defensibility in a system where attention and workflow access are scarce. When a product becomes embedded in how care is actually delivered, scale follows naturally,” she explained.
Investors are increasingly looking for companies that tackle “the hardest and most important problems” in healthcare, including diagnosis, treatment, patient safety, referrals and claims, Stanton added. She said investors have a large appetite for technology that can help clinicians do their jobs better so they can ultimately improve patient outcomes.
A revenue model that delivers
It’s clear that doctors are turning to OpenEvidence to answer their questions, but they’re using it for free, which begs the question: How does this startup make money? And how does it make enough money to justify a $12 billion valuation?
Ads, of course.
OpenEvidence monetizes by selling ads on its platform to pharmaceutical companies, explained Michael Robinson, partner and head of the investing team at Craft Ventures, which participated in OpenEvidence’s Series D last month.
“We looked at the [total addressable market] for digital pharma ad spending. There is roughly a $20-25 billion U.S. digital ad market for pharma, and this doesn’t include global expansion. As query volume increases, it drives additional ad inventory that can be monetized,” Robinson explained in an emailed statement.
According to its privacy policy, OpenEvidence collects information about how clinicians use the platform, including engagement with particular topics and device data. This data can then be used to tailor ads to each user’s specialty and interests.
Nadler, OpenEvidence’s CEO, pointed out that the way all AI search works is that it takes a few seconds to find and collect the evidence that is used to generate an answer.
“We take advantage of that moment to display the ad. The reason physicians don’t feel this is intrusive is that they would have to wait for the answer in that time anyway. The ad and the answer are always separate — once the answer is generated, the ad disappears,” he explained.
Robinson noted that OpenEvidence is “one of the fastest companies” to hit $100 million in runrate revenue in less than 12 months — faster than other major AI players like Wiz, Sierra and Perplexity, and certainly the fastest among healthcare-focused AI companies.
“The potential here is huge, and they are already working with major pharma companies who have signaled a desire to increase spend,” Robinson stated.
The user base is not only growing, but they are also highly engaged and continue to increase their total searches per month, he added.
This helps differentiate OpenEvidence’s bottom-up physician adoption model from Doximity’s approach — essentially, doctors use OpenEvidence more regularly, so they’re more likely to be exposed to ads on the platform.
As for further growth potential, Robinson pointed out that OpenEvidence has initially been focused on the U.S. physician market, but inroads exist across other user groups like pharmacists, nurses and medical students, in addition to global expansion with the platform’s multilingual capabilities.
Product expansion could be another opportunity for growth down the line too, Robinson noted. OpenEvidence could continue to launch new products that integrate into the physician workflow to help with tasks like documentation and care coordination.
What’s ahead?
Robinson believes in OpenEvidence’s ability to maintain its competitive edge because its value proposition is aligned with both physicians and pharmaceutical companies. For physicians, the platform is free and easy to use, as well as trustworthy. For drugmakers, the ads can be served right at the time of a search, when intent and engagement is high.
This gives the company “more precise targeting than other channels,” according to Robinson.
In his eyes, the startup’s Series D validates the trend of mega fundraising rounds in category leaders.
“We’re seeing more investment dollars being concentrated in consensus winners. The timeline in which companies are becoming perceived category winners is getting shorter and is driving huge funding rounds in rapid succession. This is true across every category, not just healthcare,” he stated.
Nadler said that he views time as the company’s main competitor going forward. Nadler described his company’s priority as “getting this in every doctor’s hands” in time for their patients to benefit.
To do that, the startup will continue to invest in high quality content partnerships with the owners of trusted medical information, and it will utilize its growing scale for improvement.
“Every question represents a gap in clinical knowledge and understanding, and gives us an opportunity to fill that gap. Additionally, every clinical conversation within OpenEvidence increases our understanding of how physicians reason through tough clinical questions. The benefit there is obvious — being exposed to the clinical thought process at our scale allows us to learn from it, and in turn leverage it to improve reasoning about any and all clinical questions,” he explained.
Doctors love it, pharma funds it, and investors are taking notice — only time will tell if OpenEvidence can maintain and build on its dominance.
Photo: PM Images, Getty Images
