From Found Revenue to Found Health

When SmarterDX was recently acquired for over $1B in under four years, it marked a milestone that made me reflect on Floodgate’s own healthcare journey. Michael Gao, Josh Geleris, and their team built an extraordinary company that embodies many of the themes we believe will drive massive outcomes in healthcare and we had had a chance to witness that growth from seed to exit.

But our story in healthcare started long before this acquisition. About six or seven years ago, we recognized that while we hadn’t yet made many bets in the sector, healthcare was too important and too large to ignore. We also recognized our limitations—we’re not medical doctors or biotech PhDs. What we are experts in is software. So the question became: what does a Floodgate-style investment in healthcare look like?

Our Investment Lens

Over the years, we developed a clear set of rules:

1. Software-first – we back businesses where software is the primary lever of change.
2. No medical expertise bets – we avoid diagnostics or companies whose value rests on prescribing or dictating a care path
3. No FDA dependency – regulatory timelines are outside our core expertise.
4. Free-market dynamics – wherever possible, we want companies where buyers have agency and skin in the game.

This lens guided our investments in SmarterDX, Uno Health (recently acquired by Find Help), Counsel Health, and a stealth company we’re excited about.

Themes That Continue To Excite Us

1. Found Revenue

SmarterDX created magic by helping hospitals find revenue that was already theirs. Their platform surfaced coding and documentation gaps that meant millions in missed reimbursements. This theme of “found revenue” is powerful in healthcare and beyond—it’s not just efficiency, it’s free money for customers improving their margins and increasing their top line.

2. Seamless Consumer Logistics

In consumer healthcare, people control thousands of dollars in annual spend. The barrier isn’t willingness, it’s logistics: finding the right doctor, scheduling an appointment, navigating insurance. Companies that dissolve these friction points (like Counsel Health) unlock massive value.

3. Empowered Consumers

We’re living in a world where patients are more informed than ever. Every day, over a billion health-related questions are asked on Google —and now ChatGPT and other AI tools are taking an even bigger share of those queries. We aren’t going back to the days when consumers deferred entirely to their PCPs. That’s why we backed Counsel Health. Founded by Muthu Alagappan (a practicing physician and Mayfield Fellow alum), Counsel is building an AI-enabled, text-based care model with physicians in the loop. It takes the reality of how patients already seek care—via Google, ChatGPT, and casual PCP messaging—and turns it into a safe, scalable system. We believe that AI native healthcare will fundamentally be a different experience.

Counsel represents the next stage of empowered consumers: giving patients the tools, guidance, and validation to have a vital role in advocacy of their health, without abandoning the trust and oversight of a physician.

On a personal note: I have pre-diabetes and used ChatGPT to ask how Japanese populations are treated compared to the U.S. The insights I uncovered led me to explore GLP-1 treatment over the default heavy metformin protocol. That’s a concrete example of how information access is reshaping patient agency and was a moment of clear consumer delight.

Authentic Founders Matter Most

But if there’s one principle I’ve learned above all, it’s this: healthcare rewards authentic founders.

Michael Gao and Josh Geleris were physicians who had lived the frustrations of clinical documentation at New York Presbyterian. They understood how they could serve the people inside the health system while also building a big business.

That empathy made all the difference. It showed up in how they designed their product, how they spoke with Chief Quality Officers and CFOs, and how they rolled out SmarterDx inside hospitals.

In healthcare, authentic founders who combine lived experience with entrepreneurial drive are the ones who build enduring companies.

Looking Ahead

We will continue to look for companies that:

• Create found revenue for providers or payers.
• Unlock latent consumer demand through better logistics.
• Empower patients to be owners of their health journey.
• And are led by authentic founders with deep empathy for the problem they’re solving

SmarterDx’s $1B+ exit proves that these some of themes are not just theoretical—they can be transformative, market-defining, and massively valuable.

At Floodgate, we believe the next generation of healthcare companies won’t just make the system more efficient. They will reshape the way revenue is discovered, the way patients access care, and the way consumers take control of their health.