healthcare industry
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Better Health raises $3.5M seed round to reinvent medical supply shopping through e-commerce
The home medical supply market in the U.S. is significant and growing, but the way that Americans go about getting much-needed medical supplies, particularly for those with chronic conditions, relies on outdated and clumsy sales mechanisms that often have very poor customer experiences. New startup Better Health aims to change that, with an e-commerce approach to serving customers in need of medical supplies for chronic conditions, and it has raised $3.5 million in a new seed round to pursue its goals.
Better Health estimates the total value of the home medical supplies market in the U.S., which covers all reimbursable devices and supplies needed for chronic conditions, including things like colostomy bags, catheters, mobility aids, insulin pumps and more, is around $60 billion annually. But the market is obviously a specialized one relative to other specialized goods businesses, in part because it requires working not only with customers who make the final decisions about what supplies to use, but also payers, who typically foot the bill through insurance reimbursements.
The other challenge is that individuals with chronic care needs often require a lot of guidance and support when making the decision about what equipment and supplies to select — and the choices they make can have a significant impact on quality of life. Better Health co-founder and CEO Naama Stauber Breckler explained how she came to identify the problems in the industry, and why she set out to address them.
“The first company I started was right out of school, it’s called CompactCath,” she explained in an interview. “We created a novel intermittent catheter, because we identified that there’s a gap in the existing options for people with chronic bladder issues that need to use a catheter on a day-to-day basis […] In the process of bringing it to market, I was exposed to the medical devices and supplies industry. I was just shocked when I realized how hard it is for people today to get life-saving medical supplies, and basically realized that it’s not just about inventing a better product, there’s kind of a bigger systematic problem that locks consumer choice, and also prevents innovation in the space.”
Stauber Breckler’s founding story isn’t too dissimilar from the founding story of another e-commerce pioneer: Shopify. The now-public heavyweight originally got started when founder Tobi Lütke, himself a software engineer like Stauber Breckler, found that the available options for running his online snowboard store were poorly designed and built. With Better Health, she’s created a marketplace, rather than a platform like Shopify, but the pain points and desire to address the problem at a more fundamental level are the same.
Better Health head of Product Adam Breckler, left, and CEO Naama Stauber Breckler, right. Image Credits: Better Health
With CompactCath, she said they ended up having to build their own direct-to-consumer marketing and sales product, and through that process, they ended up talking to thousands of customers with chronic conditions about their experiences, and what they found exposed the extent of the problems in the existing market.
“We kept hearing the same stories again, and again — it’s hard to find the right supplier, often it’s a local store, the process is extremely manual and lengthy and prone to errors, they get the surprise bills they weren’t expecting,” Stauber Breckler said. “But mostly, it’s just that there is this really sharp drop in care, from the time that you have a surgery or you were diagnosed, to when you need to now start using this device, when you’re essentially left at home and are given a general prescription.”
Unlike in the prescription drug market, where your choices essentially amount to whether you pick the brand name or the generic, and the outcome is pretty much the same regardless, in medical supplies which solution you choose can have a dramatically different effect on your experience. Customers might not be aware, for example, that something like CompactCath exists, and would instead choose a different catheter option that limits their mobility because of how frequently it needs changing and how intensive the process is. Physicians and medical professionals also might not be the best to advise them on their choice, because while they’ve obviously seen patients with these conditions, they generally haven’t lived with them themselves.
“We have talked to people who tell us, ‘I’ve had an ostomy for 19 years, and this is the first time I don’t have constant leakages’ or someone who had been using a catheter for three years and hasn’t left her house for more than two hours, because they didn’t feel comfortable with the product that they had to use it in a public restroom,” Stauber Breckler said. “So they told us things like ‘I finally went to visit my parents, they live in a town three hours away.’ ”
Better Health can provide this kind of clarity to customers because it employs advisors who can talk patients through the equipment selection process with one-to-one coaching and product use education. The startup also helps with navigating the insurance side, managing paperwork, estimating costs and even arguing the case for a specific piece of equipment in case of difficulty getting the claim approved. The company leverages peers who have firsthand experience with the chronic conditions it serves to help better serve its customers.
Already, Better Health is a Medicare-licensed provider in 48 states, and it has partnerships in place with commercial providers like Humana and Oscar Health. This funding round was led by 8VC, a firm with plenty of expertise in the healthcare industry and an investor in Stauber Breckler’s prior ventures, and includes participation from Caffeinated Capital, Anorak Ventures and angels Robert Hurley and Scott Flanders of remote health pioneer eHealth.
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Color raises $167 million funding at $1.5 billion valuation to expand ‘last mile’ of US health infrastructure
Healthcare startup Color has raised a sizable $167 million in Series D funding round, at a valuation of $1.5 billion post-money, the company announced today. This brings the total raised by Color to $278 million, with its latest large round intended to help it build on a record year of growth in 2020 with even more expansion to help put in place key health infrastructure systems across the U.S. — including those related to the “last mile” delivery of COVID-19 vaccines.
This latest investment into Color was led by General Catalyst, and by funds invested by T. Rowe Price, along with participation from Viking Global investors as well as others. Alongside the funding, the company is also bringing on a number of key senior executives, including Claire Vo (formerly of Optimizely) as chief product officer, Emily Reuter (formerly of Uber, where she played a key role in its IPO process) as VP of Strategy and Operations, and Ashley Chandler (formerly of Stripe) as VP of Marketing.
“I think with the [COVID-19] crisis, it’s really shone the light on that lack of infrastructure. We saw it multiple times, with lab testing, with antigen testing and now with vaccines,” Color CEO and co-founder Othman Laraki told me in an interview. “The model that we’ve been developing, that’s been working really well and we feel like this is the opportunity to really scale it in a very major way. I think literally what’s happening is the building of the public health infrastructure for the country that’s starting off from a technology-first model, as opposed to, what ends up happening in a lot of industries, which is you start off taking your existing logistics and assets, and add technology to them.”
Color’s 2020 was a record year for the company, thanks in part to partnerships like the one it formed with San Francisco to establish testing for healthcare workers and residents. Laraki told me they did about five-fold their prior year’s business, and while the company is already set up to grow on its own sustainably based on the revenue it pulls in from customers, its ambitions and plans for 2021 and beyond made this the right time to help it accelerate further with the addition of more capital.
Laraki described Color’s approach as one that is both cost-efficient for the company, and also significant cost-saving for the healthcare providers it works with. He likens their approach to the shift that happened in retail with the move to online sales — and the contribution of one industry heavyweight in particular.
“At some point, you build Amazon — a technology-first stack that’s optimized around access and scale,” Laraki said. “I think that’s literally what we’re seeing now with healthcare. What’s kind of getting catalyzed right now is we’ve been realizing it applies to the COVID crisis, but also, we started actually working on that for prevention and I think actually it’s going to be applying to a huge surface area in healthcare; basically all the aspects of health that are not acute care where you don’t need to show up in hospital.”
Ultimately, Color’s approach is to rethink healthcare delivery in order to “make it accessible at the edge directly in people’s lives,” with “low transaction costs,” in a way that’s “scalable, [and] doesn’t use a lot of clinical resourcing,” Laraki says. He notes that this is actually very possible once you reasses the problem without relying on a lot of accepted knowledge about the way things are done today, which result in a “heavy stack” versus what you actually need to deliver the desired outcomes.
Laraki doesn’t think the problem is easy to solve — on the contrary, he acknowledges that 2021 is likely to be even more difficult and challenging than 2020 in many ways for the healthcare industry, and we’ve already begun to see evidence of that in the many challenges already faced by vaccine distribution and delivery in its initial rollout. But he’s optimistic about Color’s ability to help address those challenges, and to build out a “last mile” delivery system for crucial care that expands accessibility, while also making sure things are done right.
“When you take a step back, doing COVID testing or COVID vaccinations … those are not complex procedures at all — they’re extremely simple procedures,” he said. “What’s hard is doing them massive scale and with a very low transaction cost to the individual and to the system. And that’s a very different tooling.”
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Osso VR raises $14 million to bring virtual reality to surgical and medical device training
It seems that distance learning is even coming for the healthcare industry.
As remote work becomes the order of the day in the COVID-19 era, any tool that can bring training and education services to folks across industries is gaining a huge amount of investor interest — and that includes healthcare.
Virtual reality tools like those on offer from Osso VR have been raising investor dollars at a rapid clip, and now the Palo Alto, California-based virtual reality distribution platform joins their ranks with a $14 million round of financing.
The money came from a clutch of investors led by the investment arm of Kaiser Permanente, a healthcare giant whose network of managed care facilities and services spans the country. Previous backers and new investors like SignalFire, GSR, Scrum Ventures, Leslie Ventures and OCA Ventures also participated in the funding.
Osso has seen its adoption skyrocket during the pandemic as medical device manufacturers and healthcare networks turn to training tools that don’t require a technician to be physically present.
According to company founder Dr. Justin Barad, the market for medical device education services alone is currently around $3 billion to $5 billion and growing rapidly.
Staffed by a team that comes from Industrial Light and Magic, Electronic Arts, Microsoft and Apple, Osso VR makes generic educational content for training purposes and then produces company specific virtual reality educational videos for companies like Johnson & Johnson. Those productions can run the gamut from instructional videos on vascular surgery to robotic surgery training tips and tricks.
While Kaiser Permanente Ventures’ Amy Belt Raimundo said that the strategic investors’ decisions to commit capital aren’t based on what Kaiser Permanente uses, necessarily, the organization does take its cues from what employees want.
“We don’t tie our investment to a deployment or customer contract, but we look for the same signals within Kaiser Permanente,” said Belt Raimundo. But the organization did have employees interested in using the Osso technology. “We made the announcement that we are looking at [Osso VR] technology for use. And that’s where the investment and commercial decision was signaling off of each other, because the response showed that there was an unmet need there,” she said.
Osso VR currently has around 30 customers, 12 of which are in the medical device space. The company uses Oculus Quest headsets and is deployed in 20 teaching hospitals across 20 different countries. In a recent validation study, surgeons training with Osso VR showed a 230% improvement in overall surgical performance, the company said in a statement.
The goal, according to Barad, a lifelong coder with a game development credit from Activision/Blizzard, is to democratize healthcare. “This is about improving patient outcomes, democratizing access and improving education,” said Barad. “Now that the technology is growing and maturing and VR is growing as a platform, we can attack the broader problems in healthcare,” he said.
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Thirty Madison raises $47 million for its direct to consumer treatments of hair loss, migraines and indigestion
Thirty Madison, the New York-based startup developing a range of direct to consumer treatments for hair loss, migraines and chronic indigestion, has raised $47 million in new financing.
After last week’s nearly $19 billion merger between Teladoc and Livongo, remote therapies and virtual care companies are all the rage among the healthcare industry, and Thirty Madison’s business is no exception.
An indicator of just how important these companies are to the future of the healthcare business can be seen in the presence of Johnson & Johnson Innovation – JJDC, Inc. (JJDC) in the latest round for Thirty Madison.
Existing investors Maveron and Northzone also returned to back the company in a deal led by Polaris Partners. Thirty Madison has raised a total of $70 million so far.
Founded just three years ago by Steven Gutentag and Demetri Karagas, Thirty Madison expanded from treating hair loss with its Keeps brand in 2018 to migraine treatments in early 2019 with Cove, and launched Evens (the company’s acid reflux treatment service) later that year.
Thirty Madison has just begun offering urgent care consultations for users on a pay-what-you-will model.
And the company’s founders differentiate Thirty Madison’s business from their better-funded competitors like Hims and Ro by emphasizing that their company provides continuing care after a diagnosis and offers a range of treatment options for the conditions that the company treats. That, coupled with the more narrow focus on a few specific conditions, distinguish Thirty Madison from its peers in the industry.
“Over 59% of Americans suffer from at least one chronic condition, but few resources exist to help them connect the dots of their care,” said Amy Schulman, a partner with Polaris Partners and new director on the Thirty Madison board.
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Tyto Care raises $50 million as it looks to buy and build new services during COVID-19 demand surge
Tyto Care, the provider of a home health diagnostic device and telemedicine consultation app, said it has raised $50 million in a new round of funding.
The round was led by Insight Partners, Olive Tree Ventures, and Qualcomm Ventures, according to a statement, and brings the startup’s total capital raised to more than $105 million.
The funding comes just as Tyto has seen a dramatic surge in demand brought on by the global response to the COVID-19 pandemic. Tyto Care’s toolkit is being used as a telehealth diagnostic solution that was already seeing three times sales growth in 2019 alone.
Last year, the company inked a deal with Best Buy and works with most of the major telemedicine providers, including American Well, Teladoc and others.
Previous investors Orbimed, Echo Health, Qure, Teuza and others also participated in the new financing, the company said in a statement.
With the financing, Tyto Care is well-positioned to both buy and build new tools based on its existing diagnostics platform, as well as expand its home health testing kit into new areas.
Companies like Scanwell Health are providing at-home diagnostic tests for things like urinary tract infections, and Tyto Care chief executive Dedi Gilad definitely sees options for new products around different kinds of at-home tests, the Tyto Care founder said in an interview.
All of this new capital comes with surging demand where Tyto Care’s telehealth technology is being used by every hospital in Israel to provide remote examinations of quarantined and isolated patients infected with COVID-19. Other hospital networks are also turning to the company’s diagnostics tools for similar applications, the company said.
The remote medical exams can protect health providers from exposure to SARS-Cov-2, the virus that causes COVID-19, and enables uninfected patients to get an examination of their basic health remotely, without needing to go to a medical facility.
“Over the past two years, Tyto Care has increased momentum faster than ever before and is playing a leading role in changing how people receive healthcare. Telehealth is heeding the call of the COVID-19 pandemic and we are proud that our unique solution is aiding health systems and consumers around the world in the fight against the virus,” said Gilad, in a statement. “This new funding comes at a pivotal moment in the evolution of telehealth and will enable us to continue to transform the global healthcare industry with the best virtual care solutions.”
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As demand for mental health services soars, SonderMind raises $27 million to expand its services
“Our real focus is on democratizing mental healthcare,” says SonderMind co-founder chief executive, Mark Frank.
His company, founded back in 2017, is having a moment. With the restrictions and economic stresses caused by the government’s efforts to mitigate the spread of the COVID-19 epidemic in the U.S., demand for mental health services is soaring. And it’s compounding what was already a mental health crisis in the U.S.
A 2019 article from Bloomberg Businessweek laid out the scope of the problem in stark terms. In 2017, 47,000 people died by suicide in the U.S. and there were 1.4 million suicide attempts — a suicide rate that’s the country’s highest since World War II, according to the Centers for Disease Control and Prevention. Drug overdoses, another measure of the nation’s anguish, killed 70,000 people in 2017. Another 7% of U.S. adults reported suffering at least one major depressive episode in 2018.
Taken together, the data points to a tremendous health problem. One that the current healthcare system is only now grappling with.
SonderMind’s chief executive sees his company as part of the solution.
Most mental health practitioners don’t operate within a healthcare network or take insurance, which means that the only folks with access to care are the ones that can afford the high price of therapy. SonderMind changes that equation by offering practitioners a toolkit and back office services so they can bill insurance providers and take care of the operational side of running a healthcare practice. It also acts as a funnel, gauging the needs of potential patients and connecting them to the therapists that are best suited to provide them the care they need. That lets practitioners focus on seeing patients, the company said.
The company currently counts 500 providers on its marketplace, which operates in Colorado, Arizona and Texas, and has raised $27 million in its latest round of financing to extend its services to other parts of the U.S.
The San Francisco-based investment firm General Catalyst led the financing, which also included additional new investors F-Prime Capital and participation from previous investors like the Kickstart Seed Fund, Diōko Ventures (managed by FCA Venture Partners) and Jonathan Bush.
“This financing provides the fuel to support our growth objectives and advance our mission to make behavioral health more accessible, approachable and utilized by building a modern marketplace that holds great appeal to both clinician and patient,” said Frank in a statement.
The investment extends General Catalyst’s funding into healthcare services in recent years and represents a continued emphasis on healthcare services for the firm. “Healthcare is obviously a really important thesis for GC as a whole,” says Holly Maloney, a managing director at General Catalyst. “This is going to be one of the largest value drivers for VC this decade.”
General Catalyst already had a robust portfolio of healthcare-focused companies — including Livongo, OM1 and Oscar Health.
For Maloney, the investment in SonderMind grew out of the firm’s exposure to mental health investment through another portfolio company, Mindstrong Health. “Mindstrong forced us to explore… access to care and finding care,” says Maloney.
The General Catalyst investor sees the investment in SonderMind as also helping to open doors for more people to join the profession.
“It helps people to start their business for sure. It helps more people pursue it as a career path,” she said. And that’s good for a country where more mental health professionals and better access to care are desperately needed.
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Flagship Pioneering raises $1.1 billion to spend on sustainability and health-focused biotech
Flagship Pioneering, the Boston-based biotech incubator and holding company, said it has raised $1.1 billion for its Flagship Labs unit.
Flagship, which raised $1 billion back in 2019 for growth-stage investment vehicles, develops and operates startups that leverage biotechnology innovation to provide goods and services that improve human health and promote sustainable industries.
“We’re honored to have the strong support of our existing Limited Partners, as well as the interest from a select group of new Limited Partners, to support Flagship’s unique form of company origination during this time of unprecedented economic uncertainty,” said Noubar Afeyan, the founder and chief executive of Flagship Pioneering, in a statement.
In addition to its previous focus on health and sustainability, Flagship will use the new funds to focus on new medicines, artificial intelligence and “health security,” which the company says is “designed to create a range of products and therapies to improve societal health defenses by treating pre-disease states before they escalate,” according to Afeyan.
Flagship companies are already on the forefront of the healthcare industry’s efforts to stop the COVID-19 pandemic. Portfolio company Moderna is one of the companies leading efforts to develop a vaccine for the novel coronavirus which causes COVID-19.
In the 20 years since its launch, Flagship has 15 wholly owned companies and another 26 growth-stage companies among its portfolio of investments.
New companies include: Senda Biosciences, Generate Biomedicines, Tessera Therapeutics, Cellarity, Cygnal Therapeutics, Ring Therapeutics and Integral Health. Growth companies developed or backed by Flagship include Ohana Biosciences, Kintai Therapeutics and Repertoire Immune Medicines.
Two of the companies in the Flagship Labs portfolio have already had initial public offerings in the past two years, the company said. Kaleido Biosciences and Axcella Health raised public capital in 2019, and Moderna Therapeutics conducted a $575 million secondary offering earlier this year.
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UCLA now has the first zero-emission, all-electric mobile surgical instrument lab
Electrification in the automotive industry isn’t just about consumer cars: There are plenty of commercial and specialist vehicles that are prime candidates for EVs, including in the healthcare industry. Take the new UCLA mobile surgical lab developed by Winnebago, for instance — it’s a zero-emission, all-electric vehicle that will move back and forth between two UCLA campuses, collecting, sterilizing and repairing surgical instruments for the medical staff there.
Why is that even needed? The usual process is sending out surgical instruments for this kind of service by a third-party, and it’s handled in a dedicated facility at a significant annual cost. UCLA Health Center estimates that it can save as much as $750,000 per year using the EV lab from Winnebago instead.
The traveling lab can operate for around eight hours, including round-trips between the two hospital campuses, or for a total distance traveled of between 85 and 125 miles on a single charge of its battery, depending on usage. It also offers “the same level of performance, productivity and compliance” as a lab in a fixed-location building, according to Winnebago.
Aside from annual savings on operating costs, UCLA also got some discounts toward the purchase of the lab from a few grant programs, including the Hybrid and Zero-Emission Truck and and Bus Voucher Incentive Project (an admitted mouthful, but it does have its own acronym luckily — HVIP). These programs all encourage the adoption of electric vehicles through financial incentives that help defray the upfront costs, which is yet another good reason for industries like healthcare to look at EVs as a way to not only reduce costs long term, but upfront as well.
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What tech gets right about healthcare
Why is tech still aiming for the healthcare industry? It seems full of endless regulatory hurdles or stories of misguided founders with no knowledge of the space, running headlong into it, only to fall on their faces.
Theranos is a prime example of a founder with zero health background or understanding of the industry — and just look what happened there! The company folded not long after founder Elizabeth Holmes came under criminal investigation and was barred from operating in her own labs for carelessly handling sensitive health data and test results.
But sometimes tech figures it out. It took years for 23andMe to breakthrough FDA regulations — it’s since more than tripled its business and moved into drug discovery.
And then there’s Oscar Health, which first made a mint on Obamacare and has since ventured into Medicare. Combined with Bright, the two health insurance startups have pulled in a whopping $3 billion so far.
It’s easy to shake our fists at fool-hardy founders hoping to cash in on an industry that cannot rely on the old motto “move fast and break things.” But it doesn’t have to be the code tech lives or dies by.
So which startups have the mojo to keep at it and rise to the top? Venture capitalists often get to see a lot before deciding to invest. So we asked a few of our favorite health VC’s to share their insights.
Phin Barnes – First Round Capital
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Serena Williams, Mark Cuban invest $3 million in Mahmee, a digital support network for new moms
Tennis superstar and mom to a 22-month-old, Serena Williams has joined Mark Cuban to invest $3 million seed funding in Mahmee, a startup working toward filling the critical care gap in postpartum care.
For those who’ve never given birth or who (count your blessings!) never had any mishaps in the hospital or afterwards, the weeks and months following childbirth can be extremely hard on the new mom, with estimates as high as one in five women suffering from postpartum depression or anxiety and about 9% of women experiencing post traumatic stress disorder (PTSD) following childbirth — and those are just the mood and mental health disorders.
Physical recovery, even for those with a healthy, run-of-the-mill birth, takes at least six weeks — eight weeks if you’ve had a C-section. And then there are all the medical complications. Williams, who has a history of blood clots, ended up basically shouting at the doctors to give her a CT scan that saved her life.
The real issue, at the heart of all this, according to Mahmee co-founder Melissa Hanna, is that “the data is fragmented.” She says this is why she built a network to get new moms the support they need — from their community, other moms and medical providers.
Mahmee provides not only online group discussions with other moms going through the same thing and at the same stage but also connection to your medical provider. On top of that, it adds support from a trained “maternity coach” who can flag if something is wrong.
One example Hanna used was a new mom who was exhibiting symptoms of septic shock. The co-founder says a coach was able to call this mom on the spot and get her to contact her OB-GYN right away.
There are other online services like Postpartum Support International (PSI) and the Bloom Foundation, which both provide a sort of digital network and resources for new moms, but Hanna believes it is that missing link to medical professionals after mom has gone home from the hospital that really makes a difference.
“We’re so focused on delivering a healthy baby that mom gets side-lined,” she told TechCrunch. Adding in a statement, “And this industry is lacking the IT infrastructure needed to connect these professionals from different organizations to each other, and to follow and monitor patients across practices and health systems. This missing element creates gaps in care. Mahmee is the glue that connects the care ecosystem and closes the gaps.”
While other sites mentioned above are free to use, Mahmee, which goes beyond social support to providing engagement and patient monitoring, makes money through group and individual video calls (the introductory session with a coach is free) and various support groups. There are also different payment tiers starting at $20 a month and up toward $200 per month where new parents can ask unlimited questions through a HIPAA-secure, online dashboard connecting them with their medical providers and Mahmee coaches.
Do new moms need to pay someone to help them out and monitor them medically after they get home from the hospital? Possibly. Some local hospitals and medical networks also provide various types of help — both through counseling and new parent support groups. But often it can take weeks to get a counseling session at a busy hospital and your OB may have too many patients to call and check up on you. Having this type of support could just save your life — and, if anything else, checking in with a group of moms going through the same thing could be the key to saving your sanity.
Hanna admits it’s early days for her startup, but tells TechCrunch there are more than 1,000 providers in the Mahmee network so far. She plans to use the $3 million to grow her team, including engineers, clinicians and sales staff, and hints she’s working on several partnerships within the healthcare industry right now.
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