Spotify CEO’s Medical Startup Neko Health Gets Big-Name Backers

Neko Health, the medical diagnostics company co-founded by Spotify Technology SA Chief Executive Officer Daniel Ek, raised €60 million ($65.4 million) in venture capital to expand outside its home country of Sweden.

Neko Health, the medical diagnostics company co-founded by Spotify Technology SA Chief Executive Officer Daniel Ek (Livemint)

Neko Health, the medical diagnostics company co-founded by Spotify Technology SA Chief Executive Officer Daniel Ek, raised €60 million ($65.4 million) in venture capital to expand outside its home country of Sweden.

Skype co-founder Niklas Zennstrom will join the company's board as a result of his investment vehicle, Atomico, participating in the round, as will Klaus Hommels, whose VC firm Lakestar led the early-stage investment. Palo Alto-based General Catalyst also participated. Neko Health didn't disclose a valuation.

“I've spent more than 10 years exploring the untapped potential of health-care innovation,” Ek said in a statement ahead of the announcement on Wednesday. “We are dedicated to building a health-care system that focuses on prevention and patient care, aiming to serve not just our generation, but those that follow.”

Neko Health runs private clinics kitted out with proprietary and off-the-shelf diagnostic products, most notably its own full-body 3D scanner. It incorporates dozens of sensors that, when combined with the company's artificial intelligence software, can give instant results about potential skin conditions, such as moles, as well as warning signs related to cardiovascular health.

The company's first clinic opened in February in Stockholm. Patients pay €250 for a full-body examination that takes 10-to-20 minutes, followed by a review with a doctor. The company has performed more than 1,000 scans since launch, but Nilsonne said thousands more are on a waiting list. About 80% of customers have pre-paid for follow-up scans in a year's time.

“We have our own nurses, doctors and specialists,” Hjalmar Nilsonne, Neko Health's other co-founder and its CEO, said in an interview. “We have dermatologists employed just to review the skin images. We have a doctor on site who can make qualified medical judgments for anything that comes up.”

Covid-19 had been a boon for companies like telehealth startup Ro — also backed by General Catalyst — as patients sought virtual care from the safety of their homes. But Neko Health will focus on in-clinic assessment for now, with on-site medical experts to review and advise client results, Nilsonne said.

“I come from a family of doctors,” he said. “My grandfather had his own clinic here in Stockholm over a hundred years ago, both of my parents are doctors and professors, and my oldest brother is a doctor and a neuroscientist. This is very much the world I grew up in.”

The same couldn't be said of Elizabeth Holmes, the disgraced founder of blood-testing startup Theranos. Investor scrutiny of health-tech startups is likely to be heightened in the wake of that scandal, but Nilsonne said he's confident Neko Health's backers see how different an approach he and Ek are taking.

“Everything they did was a secret,” he said of Theranos. “We're pretty darn transparent about what we do and how it works.”

Nilsonne said Ek contacted him in 2018, around the time of Spotify's IPO and as Nilsonne's previous company, Watty, was being wound up ahead of a sale to a German buyer, although that deal ultimately fell through.

“Dan was thinking about ‘how do I do something good for the world?'” Nilsonne said. “It was 2018 and there was no plan for what to do really, but we started talking and he was saying ‘you know, we should really do something in health care.'”

Nilsonne said the additional investment will go toward building clinics in other countries across Europe. The careers page on the company's website on July 3 included an opening for a doctor in London, whose main responsibilities include “managing the process of opening a private medical clinic.”