Watson kicks it up a notch for Welltok

CaféWell Concierge to answer consumers’ most pressing health questions
By Bernie Monegain
01:00 AM

Welltok, says CEO Jeff Margolis, is leading a transformative movement in healthcare – pioneering health optimization. Now, it has a little help from its friend Watson.

In a third round of funding, Welltok, developer of CaféWell, what the company calls its health optimization platform, has raised $22.1 million.

New Enterprise Associates led the funding with new participation from IBM  – here's where Watson comes in – and Qualcomm, through its venture capital arm, Qualcomm Ventures’ life fund portfolio.

The IBM investment was the first from the recently formed Watson Group.

The investment supports IBM’s partnership with Welltok to build CaféWell Concierge, a new application infused with Watson’s cognitive computing capabilities. Welltok’s app will call upon Watson’s unique ability to uncover insights from big data by understanding the complexities of human language, reading millions of pages of data within seconds and improving its own performance by learning.

“IBM selected us to partner with, and thought that the application of cognitive computing would be the next wave of computing, would be something wonderful to work with,” Margolis told Healthcare IT News.

“Watson is one of IBM's most prized innovations, and by sharing it with organizations like Welltok, we aim to fuel a new ecosystem that accelerates creativity and entrepreneurial spirit," said Mike Rhodin, senior vice president, IBM Watson Group, in a statement. "This investment and partnership represent IBM's dedication to fueling innovation that improves lives and our mission to advance the field of healthcare into the new era of cognitive computing.”

IBM recently created the Watson Group to advance new cognitive computing capabilities. As part of the new group, IBM is investing $100 million to spur innovation for entrepreneurial organizations – ranging from startups and VC-backed companies to established players – who, like Welltok, will collectively bring forward a new generation of applications and solutions infused with Watson's cognitive computing intelligence.

“The importance of cognitive computing – and particularly the Watson solution, when you’re navigating complex things like health,” Margolis said, “is that normally when you ask a question using search you get a whole list of things, which is pretty hard for a consumer to decipher or know which one is right or which one is better for them.”

“With Watson, you ask the question, and you get the answer,” Margolis said. Just one answer.  The response is drafted in natural language, and it can be adjusted to understand what the consumer is likely to be able to understand.

The beauty of the Watson-powered offering, CaféWell Concierge, as Margolis sees it, is that it can handle complexity.

Suppose someone asking about his best option for improving his health at the moment has a knee injury from a skiing accident, is overweight and has high blood pressure, CaféWell Concierge can respond to that kind of intricacy.

“Because Watson is spatial – that is it knows where you are because it’s temporal and knows what time of day it is, and because it can ingest or read the information about you that we have on the platform – while maintaining your privacy – CaféWell Concierge works with you; it nudges you,” Margolis said. “It gets you at the right time and places to make you most effective.”

Margolis founded TriZetto in 1997. The company built a software platform that helped achieve “a very effective distribution of payments” to hospitals, physicians, pharmacies and medical supplies. “I also call that the sickcare supply chain,” he said. “What I learned there is that you actually had to have a different model – a B-to-B-to-C model,” the “C” standing for consumer.

As Margolis sees it, the healthcare system has been about helping people get back to a normal state when they get sick or injured. That has to happen, he acknowledges, but the industry also has to shift its focus on how it can help people achieve optimal health.

“That’s a very different and valuable thing to be doing,” he said, noting only 15 percent of the U.S. population is in patient mode at any given time, while everyone else is in consumer mode.

“We are excited to lead Welltok’s new round of expansion capital and believe that its success to date promises enormous potential going forward,” said Mohamad Makhzoumi, head of NEA’s healthcare IT investing practice, in a Feb. 12 news release. “As Welltok’s vision and the market are rapidly converging, the company is poised to drive optimal health for millions of consumers while delivering significant value for the healthcare system.”

Additional participants in the C-round of funding include existing investors Emergence Capital Partners, InterWest Partners, Miramar Venture Partners and Okapi Venture Capital. This brings Welltok’s funding in the last nine months to more than $40 million, making it one of the past year’s best capitalized digital health companies, Margolis noted.

Welltok’s core platform – Café Well Rewards, CaféWell Connect and CaféWell Insights – would do well in the marketplace without Watson’s participation, Margolis said in response to a question. “But, how exciting is it to be able to add natural dialogue,” he asked, “to be able to make it even easier for consumers, and how exciting is it to be able to really move to that next level of being able to mix complex things together so that they appear to be really simple?”

In his view, it has the potential to change the way consumers think about healthcare, moving the needle from what he calls, “sickcare” to health optimization.