Healthcare staffing shortages are a near-universal problem for healthcare providers. The demand for health workers is expected to continue rising faster than the supply driven by rapid population aging and high attrition.
The U.S. faces a projected shortfall of millions of health workers by 2030, including medical assistants, home health aides and nursing assistants.
The founders of online healthcare training startup Stepful saw the need to modernize medical education and upskilling, creating an AI-powered healthcare talent pipeline that helps health systems build, train and retain their workforce. The startup aims to provide accessible pathways to healthcare careers while also addressing the healthcare labor shortage.
Stepful secured $55 million in series C funding, led by Oak HC/FT, to scale its AI healthcare talent infrastructure platform. New investors Foresite, Hearst Ventures and the Citi Impact Fund also backed the round, alongside existing investors SemperVirens, Y Combinator and Intermountain Health.
News of the series C funding round was shared first with Fierce Healthcare.
The company has raised $105 million to date, picking up $31.5 million in series B funding in November 2024.
Stepful, launched in 2021, offers accelerated, affordable training for healthcare careers. The company offers employer-sponsored, debt-free pathways for students, and through partnerships with health systems and other providers nationwide, it connects graduates directly to job opportunities after certification.
Stepful’s programs currently include medical assistant, pharmacy tech, medical administration, practical nursing, dental assistant and surgical tech with plans to expand into more advanced programs.
The traditional education model requires enrolling in a community college or trade school that can cost up to $20,000 and take up to two years, which creates barriers for individuals who want to get into entry-level healthcare jobs, Carl Madi, CEO and co-founder of Stepful, told Fierce Healthcare.
"Stepful focuses on training people with a high school education to get access to healthcare jobs. Essentially, we're an AI-powered learning platform, and using technology and using AI, we're able to make that education much more cost effective, so it can be like 10x cheaper and it can be four times shorter for the medical assistant program," Madi said.
"We're both an academic institution and a technology company. The whole point for us is we're actually centering the education on the employer, so the employer will get to choose who to train, when to train, and then we can give them our technology and our accreditation status to be able to train someone," he said.
Health systems also can upskill their healthcare staff to more advanced positions.
The demand for healthcare workers is outpacing the education and training pipeline as legacy trade schools operate under enrollment caps and manual workflows, according to Stepful executives. Health systems have grown dependent on contract staffing, spending $97 billion annually largely because the credentialing and training pipeline has never been built to scale.
Stepful built a vertically-integrated platform that delivers school-as-a-service to health systems, replacing low-tech, human-bottlenecked processes with an always-on training and intelligence layer, according to executives.
The company aims to build the next generation of allied health professionals, and Madi asserts that Stepful's employer-facing model is unique. And Stepful offers individuals a more affordable, accelerated path to healthcare careers, he noted.
"We're taking high school graduates, having the healthcare system hire them, and then train them and upskill them, which means that that high school graduate can get to six figures within six to eight years, and without taking on any debt, while still working in a full-time capacity. I think that's a different way of how the education system works, and I believe it's going to be a very powerful way for us to make dents in the workforce shortage," he said.
The company currently works with more than 35 major healthcare systems including Ochsner Health, Providence Foundation Health Partners, Ohio State University Physicians and Mount Sinai. Stepful has graduated over 32,000 practice-ready healthcare workers since its founding and is reporting meaningful revenue growth.
Last year, the company acquired the St. Louis College of Nursing Careers in St. Louis, Missouri to add accredited academic programs to its education and training programs.
With the fresh funding, Stepful plans to build up its healthcare system partnerships and launch advanced degree programs in nursing and respiratory technology, Madi said. The company also plans to ramp up its AI capabilities.
Madi spent 10 years scaling operations of high-growth start-ups, including Uber, Airbnb and Amino Apps, and lead the direct to consumer business of Handy, an online marketplace for cleaning staff. He teamed up with Tressia Hobeika, who previously worked at Udacity, and Edoardo Serra, an ex-Apple engineer, to launch Stepful.
Stepful's platform works across every dimension of clinical education, from instruction and simulation to assessment and workforce planning. The company integrates AI into its workforce development and educational pipeline through personalized learning, interventions and evaluations. Stepful combines AI-driven support and live, instructor-led sessions and its AI platform delivers bite-sized, interactive learning modules.
The company's technology also provides AI-powered clinical simulation using high-fidelity avatar-based patient encounters that replicate real-world clinical scenarios, enabling immersive training without the constraints of physical infrastructure.
Historically, clinical skills required simulation labs at physical trade schools. Stepful uses AI to guide and evaluate students on hands-on clinical skills remotely by providing students with at-home medical kits. Stepful also can conduct remote evaluations. Through autonomous clinical competency evaluations, the platform can conduct real-time, multimodal assessments of a students' physical and verbal performance, with no delay in feedback loops.
For the employers, Stepful offers a platform layer that helps health systems screen, map and upskill their existing staff.
"We're able to produce practice-ready graduates at scale," Madi said. "By partnering with employers, we enable them to train their own employees or train members of their own community. We can bring the school to the healthcare systems and help them train their staff in the skills they want and that removes the model from a highly centralized education system to a centralized education system, which is central on the employer."
Mount Sinai is working with Stepful to establish a specialized patient care associate training program with a focus on training workers for ancillary clinical support roles with skills in electrocardiography (EKG), phlebotomy and direct patient care.
"This collaboration supports the development of a broader, more sustainable pipeline of ancillary staff from the communities we serve. By investing in these roles, we are reinforcing our care teams today while helping to ensure we are prepared to meet the needs of patients in the future," Jane Maksoud, RN, Senior Vice President and Chief Human Resources Officer of the Mount Sinai Health System, said in a statement last month.
"Stepful is the only company we have seen that combines online education with a sophisticated AI engine to solve the talent supply problem at scale," said Vig Chandramouli, partner at Oak HC/FT, in a statement. "This team has sustained an extraordinary pace of growth, with 30+ major healthcare system clients including Ochsner, Advent Health and Providence. Our continued investment reflects our conviction in both the leadership and the platform they've built."