Austin Walters of SpringTide Ventures has backed 40 early-stage health tech companies since 2018—including OpenLoop, now valued at $1.4 billion. His playbook for turning a seed-stage idea into a market-defining company comes down to three things: the right leader, vertical integration, and cracking the patient engagement problem that payers won't solve for you.
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Key takeaways
- SpringTide's #1 investment criterion is the 'cheetah CEO'—a founder who moves fast, drives commercial results, and doesn't need the investor to succeed.
- OpenLoop grew from ~$2M to over $1B in annual revenue by providing white-label virtual care infrastructure ('picks and shovels') including 25,000 fractionalized clinicians and pre-negotiated payer coverage.
- Payer contracts have shifted from per-member-per-month (PMPM) to per-engaged-member-per-month (PEMPM), making patient activation the central revenue challenge for digital health companies.
- Vertical integration—not point solutions—is SpringTide's thesis for building defensible, multi-billion-dollar health companies, as demonstrated by portfolio exit Pathology Watch capturing 80% of state skin biopsy volume.
- Utah's deep sales execution culture, when paired with tech-forward healthtech products, creates a geographic arbitrage advantage for consumer-direct patient engagement.
- Trumi's AI chatbot Trudy uses phone behavioral data to detect youth mental health risk and can escalate to live therapy, representing a preventive care model that operates outside traditional healthcare.
- The healthcare industry's shift toward outpatientization, decentralization, and cost reduction is creating significant entrepreneurial opportunity—but patient acquisition and engagement remain the hardest problems to solve.
What SpringTide Ventures Looks for in Seed-Stage Healthtech
Austin Walters founded SpringTide Ventures in 2018 with a mandate to fund the future of health—broadly defined. That means backing companies well outside traditional sick care: wearables, behavioral tech, and safe smartphone platforms like Trumi, which recently crossed $10 million in annual revenue after SpringTide led its seed round when the company was doing just a few million.
When evaluating seed-stage companies, Walters narrows his conviction to three criteria:
- The cheetah CEO — a founder who moves fast, drives commercial results, raises capital, and frankly doesn’t need the investor to succeed. As Walters puts it, the best founders have a reality-distortion-field quality that’s hard to define but impossible to miss.
- Vertical integration — point solutions rarely build defensible, multi-billion-dollar businesses. The most compelling investments reinvent an entire slice of healthcare by combining technology, regulatory insight, and owned infrastructure.
- Unit economics with a path to scale — SpringTide runs comprehensive due diligence memos that triangulate technology, strategy, finances, and management claims against objective reality.
OpenLoop: Picks and Shovels for Virtual Care
OpenLoop, founded by physician-entrepreneur John Lensing in Des Moines, Iowa, is the clearest example of SpringTide’s vertical integration thesis in action. The company provides white-label infrastructure for virtual care providers: a network of 25,000 fractionalized clinicians, credentialing, billing and revenue cycle management, and pre-negotiated payer coverage across nearly all states.
When SpringTide led OpenLoop’s seed financing in 2022 at a $32 million post-money valuation, the company was doing a few million in revenue. It has since grown to over $1 billion in annual revenue, 70% gross margins, and a $1.4 billion valuation at its Series B—with a Series C targeting roughly $5 billion expected next.
The Patient Activation Problem Payers Won’t Fix
Winning a payer contract is only the first mountain to climb. Early digital health contracts paid on a per member per month (PMPM) basis—providers were handed a member list and paid regardless of engagement. That model has largely shifted to per engaged member per month (PEMPM), meaning activation is now the provider’s burden entirely.
The patients most likely to benefit from preventive and virtual care are often the hardest to reach and engage—creating a genuine last-mile challenge that technology alone can’t solve. This is where Walters sees Squeeze’s Utah-based sales talent as a critical lever: converting aged, dormant member lists at rates comparable to live inbound leads.
Utah’s Sales Advantage in Regulated Industries
Walters draws a deliberate contrast between Boston’s academic and deep-tech strengths and Utah’s historically sales-driven culture—shaped by decades of direct selling, MLM, and enterprise SaaS growth. He argues the ideal pairing is Boston-style tech innovation matched with Utah sales execution, a geographic arbitrage opportunity that mirrors Clayton Christensen’s comparative-advantage framework for disruptive markets.
Trumi, AI Mental Wellness, and the Broader Definition of Health
SpringTide’s portfolio company Trumi illustrates how far the health definition can stretch. Its proprietary modular operating system runs on open-architecture Android devices provided free by carriers, charging families a per-line subscription. Its AI chatbot, Trudy, monitors behavioral signals on the device to detect early indicators of suicidal ideation and other mental health challenges—with the ability to escalate to real-time human therapy when needed.
In a gold rush, sell picks and shovels. That's exactly what they're doing.
— Austin Walters
The best investment performance is likely associated with a cheetah founder who frankly doesn't need you.
— Austin Walters
It's one thing to get a contract with a payer. That's only the first mountain you have to climb. Once you have the contract, guess how much activation or engagement work they're going to do for you? Zero.
— Austin Walters
The patients that are likely to benefit the most may be among the least likely to engage with you.
— Austin Walters
Episode chapters
- 00:10 — Introducing Austin Walters and SpringTide Ventures
- 01:09 — Trumi: Safe Smartphones and AI Mental Health for Kids
- 06:33 — OpenLoop and the Virtual Care Infrastructure Opportunity
- 10:08 — Picks and Shovels: How OpenLoop Scaled to $1B+ Revenue
- 19:45 — The Cheetah CEO: SpringTide's #1 Investment Criterion
- 24:06 — Vertical Integration and the Pathology Watch Example
- 25:56 — Utah vs. Boston: Geographic Arbitrage in Sales and Tech
- 32:41 — Patient Activation: The Real Challenge After the Payer Contract
- 36:05 — Closing Thoughts on the Future of Health
Frequently asked questions
What is SpringTide Ventures and what kind of companies does it fund?
SpringTide Ventures, founded by Austin Walters in 2018, leads seed financings for early-stage health tech companies. It has backed 40 ventures and takes a broad view of health—including preventive care, chronic disease management, and behavioral health tools—not just traditional clinical or hospital businesses.
What is a 'cheetah CEO' according to Austin Walters?
A cheetah CEO is a founder who moves very fast, is honest, drives commercial results, and is effective at both raising capital and closing customers. Crucially, they don't need the investor—they'll find a way to succeed regardless—which Walters says correlates most strongly with strong investment returns.
How did OpenLoop grow to over $1 billion in revenue?
OpenLoop built white-label infrastructure for virtual care providers, including a network of 25,000 fractionalized clinicians, credentialing, billing, and pre-negotiated payer contracts across nearly all states. This 'picks and shovels' model let any company stand up a telehealth practice without building that infrastructure themselves, fueling rapid adoption and revenue growth.
What is the difference between PMPM and PEMPM in digital health contracts?
PMPM (per member per month) paid providers for every member assigned to them regardless of engagement. PEMPM (per engaged member per month) only pays for members who actively use the service, shifting the burden of patient activation entirely onto the digital health provider.
What does Trumi do and how does it protect kids' mental health?
Trumi is a safe smartphone platform with a proprietary modular operating system that runs on open-architecture devices provided by carriers. Its AI chatbot, Trudy, analyzes behavioral signals from phone usage to detect early signs of mental health challenges like suicidal ideation and can initiate first-line intervention or escalate to real-time human therapy.
Why does Utah have a competitive advantage in healthtech sales?
Utah has a deep cultural and commercial history in direct selling, MLM, and enterprise SaaS sales, producing a large talent pool of skilled sales professionals. Walters and Squeeze's Carson Poppenger argue this execution capability, paired with technology-forward healthtech products, creates a geographic arbitrage opportunity for consumer-direct patient acquisition.