9 Healthcare Tech Startups To Watch
As venture capital flows into healthcare startups, look at some new companies that should be on your radar.
Investors poured billions of dollars into health technology startups in 2014, fueling companies that plan to reshape everything from clinical trials to analytics to payment processes.
In 2013, funding for digital health reached $2.83 billion across 578 deals, compared with $999 million for 139 deals in 2010, according to HIT Consultant. Digital health funding skyrocketed to $5.3 billion for the first three quarters of this year, HIT Consultant reported.
"There was over $400 million dollars of VC financing for mobile health in just the first quarter of the year," BridgeCrest CEO Nathan Klarer told InformationWeek.
All this healthcare money comes from multiple sources. Venture capital firms that invest in at least 10 healthcare companies and reap 50% or more of their deals in this vertical include OrbiMed Advisors, Alta Partners, Versant Ventures, SV Life Sciences, and VenBIO, while other VCs with broader investments continue to fuel medical-oriented technology firms. Healthcare organizations -- such as GE, Blue Cross/Blue Shield of Florida, and CVS -- are investing in startups, while mainstream technology businesses like Google and Apple are funneling money into young healthcare companies. Even regions are getting into the act, setting up investment hubs that spotlight healthcare startups in cities including Philadelphia, Boston, and Manhattan.
In December, McKesson launched McKesson Ventures "to invest in early- and growth-stage companies addressing both current and emerging business challenges facing the healthcare industry," the company said. Healthcare and life sciences captured more than one-third of Google Ventures' monies in 2014, compared with only 9% each in the past prior years, the Wall Street Journal reported.
The federal government is encouraging entrepreneurs to leverage its investment in new discoveries and devices. The Neuro Startup Challenge, sponsored by Heritage Provider Network and orchestrated by the Center for Advancing Innovation, encourages university scholars, private industry, entrepreneurs, and others to commercialize neuroscience inventions, said Bryan Sivak, chief technology officer at the US Department of Health and Human Services in an interview. Last year, the challenge focused on breast cancer.
"We believe this proven challenge framework creates a new pillar for HHS to impact human health by launching startups from promising HHS conceived and developed inventions," he said. "The challenge uses a novel model that gets tangible, expeditious, and efficient results; we hope to see this approach institutionalized across all federal labs."
Within one year the challenge has grown, Rosemarie Truman, founder and CEO of the Center for Advancing Aging, told InformationWeek. This year, 560 individuals competed in about 70 to 77 teams, compared with 476 in 2013, she noted, and of those, 70% focus on STEM while the remainder are serial entrepreneurs. The challenge includes creating an elevator speech and two-minute video, plus executive summary and crowdsourced feedback. Later stages -- which include fewer participants -- create a business plan and actually enter the startup phase, including finding funding and getting a National Institute of Health license.
Startup energies
Medical devices and equipment capture the biggest share of one group of investors' fortunes, reaping more than one-third of funds from CB Insights' Investor Mosaic's 2014 ranking of top 20 healthcare venture capital firms. These products received about $4 billion across 270 transactions. Biotechnology and drug development each garnered 20% of the money, while pharmaceuticals and drugs collected one-tenth of the venture capital.
This money is critical to deliver on their dreams, but many startup entrepreneurs envision changing the world through their technologies. "I participated in a few clinical trials myself and saw how they are currently conducted, even in the heart of Silicon Valley. There are still a lot of manual processes and heavy usage of paper, a lot of which results in the huge amount of time [15 years] and money [$1.8 billion] that's currently needed to take a drug to market," Avik Pal, founder and president of CliniOps, told InformationWeek.
Founding members of the 14-month-old firm, which wants to transform clinical trials, raised about $100,000, Pal said. "The clinical trial industry is at the point of inflection, and cutting-edge technology innovation leveraging social, mobile, analytics, and cloud can bring a paradigm shift in how the operations would be carried out. At CliniOps, we want to lead the transformation."
For its part, BridgeCrest saw the advent of wearables -- from traditional fitness bands to tattoos and emerging products -- and focused on capturing data from these devices for its infectious disease analytics solution, initially targeting Ebola. Likewise, startup Nanobiosym's Gene-Radar diagnostic technology can test for any disease -- such as Ebola, HIV/AIDS, or cancer -- via an iPad-size device, without requiring running water, a trained staff, or electricity.
Other startups focus on the complexities of healthcare billing and invoicing, trying to reduce the errors and complexities associated with today's processes. Some tackle problems created by the system's growing reliance on electronic health records -- clinicians' decreased productivity, the flood of data, and patient frustrations, for example -- while others target patient compliance, population health, or improving overall wellness.
We've collected some of the helathcare startups worth watching. Who else would you include?
Founded in October 2013, CliniOps of Fremont, Calif., leverages social media, mobile, analytics, and cloud to transform clinical trials, Avik Pal, founder and CEO, explained in an interview. Pal, who was shocked at the manual, time-consuming processes involved in traditional clinical trials, also recognized the challenges associated with gathering information in emerging markets that lack broadband Internet access, widespread computer literacy, and knowledge.
"Since about 20% of Phase 3 clinical trials are done outside of the US to ensure a heterogeneous mix of subject populations, an efficient design of a software with a focus to work in those conditions is absolutely needed -- [and that is] what I bring to the table: a strong background in technology with on-the-ground experience and understanding of how technology innovation can work in those conditions."
CliniOps software also includes checks and balances to ensure companies maintain compliance and ethical standards, he added, especially in regions known for unethical practices. The startup won several awards last year and was a finalist in the North Bay Innovation Summit, IBM SmartCamp 2014, and EPPICon 2014.
Telehealth visits may become a little easier with devices like MedWand. The device includes an in-ear thermometer, heart rate sensor, blood oxygen sensor, camera, digital stethoscope, and disposable specula, and it records clinical data into a HIPAA-compliant electronic health record (EHR), according to the developer.
The six-person company, headed and founded by family physician Dr. Samir Qamar, expected to close on its first round of funding earlier this year, using the money for manufacturing and advanced distribution. No shipping date was announced, nor did the company address whether its device needed regulatory approval. Multifunctional devices like this, however, are an important part of telehealth, giving patients with chronic conditions an affordable way to monitor their vital signs from home.
(Image: MedWand)
Physical therapy is a critical, yet often ignored component of post-surgical or post-release recovery. If not fully complied with, patients risk relapsing or never recovering full strength. But PT can involve weeks (or months) of painful, repetitive exercises with little apparent gain to the patient.
RespondWell hopes to change that with its gameification approach. Designed for use at either a clinic or home, RespondWell's rehab platform targets therapists, providers, and patients, and includes modules for fall prevention, pulmonary, seniors, and general fitness. Based on Microsoft Kinect, sessions are delivered via touchscreen 3D and patients can customize the trainer, music, and background. A therapist avatar delivers instruction, while the system collects feedback and results for review.
Google Glass appears to have faded from mainstream view -- but that doesn't mean it isn't carving its rightful place among vertical industries like healthcare. Augmedix channels Glass to eliminate the time-consuming task of transcribing patient notes into electronic health records (EHRs). The startup uses Glass to seamlessly push records into most EHRs and verbally query information from them, according to its website.
Augmedix -- which has funding from Rock Health, Emergence Capital Partners, Great Oaks Venture Capital, and Stanford Venture Studio, among others -- partnered on a trial at Dignity Health earlier this year, where it showed that the technology helped increase patient satisfaction by enabling doctors to spent more time with patients.
(Image: Augmedix)
One of the most common reasons patients return to the hospital or suffer medical setbacks is lack of adherence to their medication plan. This is exactly the problem startup AdhereTech targets with its smart, wireless pill bottles. The wireless bottles collect and send data to companies, analyzes the information, and shares it via dashboard, sending customizable alerts -- such as texts or alarms -- when patients miss doses.
AdhereTech is a member of GE's Startup Program and a graduate of Blueprint Health, and its bottles are currently being used by patients in pharmaceutical trials and research programs. Potentially, this type of system could be useful in non-research situations, particularly for patients suffering from chronic illnesses or taking critical medications.
Founded by a member of the original team behind Uber, Pager brings old-fashioned doctor house calls back, courtesy of today's mobile and scheduling software.
Currently available only to iPhone users in Manhattan and Brooklyn, the company said it plans to expand to Android and other areas and is currently recruiting clinicians. The first visit costs $49; subsequent doctor visits start at $199. Pager also focuses on improving patient wellness.
San Diego-based BridgeCrest Medical developed a data analytics service that garnered lots of attention during this year's Ebola crisis. The company -- which focuses on infectious disease tracking and fatigue management -- teamed up with JAJ International to bring one-step mobile Ebola testing to market.
Butterfly Network aims to transform today's diagnostic and therapeutic imaging through the use of devices, deep learning, and the cloud. The company, which has raised $100 million in funding, has developed and image scanner that's about the size of an iPhone, according to MIT Technology Review.
Such a tiny and inexpensive imaging device would revolutionize imaging and care, some experts predict. For example, as noted in the article, it could generate new ways to destroy cancer cells or transmit information to brain cells.
Michael Serbinis, League CEO
League
By putting patients at the center of care and giving them control over data, healthcare professionals, services, and payments, startup League hopes to reduce complexity and expense while improving outcomes and population health.
Slated to debut early next year, League received about $4 million in seed funding from Blackberry's Mike Lazaridis of Quantum Valley Investments, OMERS, Foundation Capital, and Real Ventures. The mobile platform will allow patients and healthcare providers to connect, and patients can choose to share their stored data with any clinicians or care providers within their "league," the company said.
"Healthcare costs are massive and growing at an unsustainable rate. While nearly half of those costs are preventable, next to nothing is spent on prevention -- this needs to change," said Michael Serbinis, League CEO and founder, in a statement. "The future of health is preventative, and it's about the consumer."
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