McLean AI health care startup raises $111 million

A McLean-based health care tech startup wants to provide more targeted medical treatments for people with cancer, heart disease and other common diseases.

Zephyr AI, founded in 2020, is a precision medicine company on a mission to democratize personalized medicine and is doing it by developing artificial intelligence-powered algorithms that can glean insights from health care data.

“We can’t wait for the next generation of high-fidelity data to deliver on the promise of precision medicine,” says Jeff Sherman. A Zephyr co-founder and chief technology officer, he’s also been the company’s interim CEO since February. “We believe patients need solutions today, so a core tenet of our company has [been] to operate it with a sense of urgency.”

Precision medicine is an approach that uses an individual’s genomic, environmental and lifestyle information to guide decisions related to medical management.

In March, the McLean-based company announced it had raised $111 million in a Series A funding round from about 30 investors, including Revolution Growth, Eli Lilly & Co., Jeff Skoll and Epiq Capital Group.

The company’s co-founders include Grant Verstandig, an entrepreneur who has founded health care and defense companies, and Yisroel Brumer, an entrepreneur who was a past acting director of cost assessment and program evaluation for the Department of Defense.

“We’re bringing in new sources to produce, fine-tune and generate the next version of our algorithms for new, more nuanced precision medicine insights. So that’s on the data and buildout front,” Sherman says.

With 45 employees, Zephyr AI plans to grow its staff significantly over the second half of the year in science and engineering as well as building out a business development and commercial team.

In March 2022, Zephyr AI raised $18.5 million in seed funding, led by Lerner Group Investments and M-Cor Holdings. The company used it to develop core algorithms and put infrastructure in place to host a massive dataset as well as establish its core team.

Discussing his company’s success with investors, Sherman describes how Zephyr AI’s algorithms won them over during a demo.

“We were able to correctly identify how patients who are considered the same clinically actually respond differently to different drugs,” he says. “So, we’re able to demonstrate that in this real-world context, which I think is a pretty high bar for these kinds of companies.”