On Monday, January 13, like a swarm of honey bees, thousands of health tech entrepreneurs, health care execs, venture capitalists, bankers, regulators and business media will descend upon downtown San Francisco as the 38th Annual J.P. Morgan Healthcare Conference gets under way. And, as is the case with any multi-day industry gathering worth its salt, an entire ecosystem of satellite events has popped up around the main attraction, which has created a seemingly endless circuit of networking events, summits and other health care-related shindigs—all offering ample excuses to down lattes during the day and throw back a shot or two at night.
Even though only a select few are invited to attend the official main stage, marking one’s presence at J.P. Morgan is paramount, as the four-day confab has positioned itself as not only the first, but perhaps the most important event of the global health care conference calendar year.
Ahead of last year’s J.P. Morgan gathering, Observer was among the first to point out a trend that was beginning to emerge across the health industry—the rise in interest from both large health care players, as well as hungry venture capitalists, for health tech plays originating in cities not typically associated with startup culture, places like Minneapolis, Nashville and Chicago. Observer even coined a new term for these disruptors from Middle America: Flyover Tech.
And, judging by the pre-conference buzz, by all accounts, last year was not a fluke; many of the entries from the 2019 list have emerged as some of the biggest and most important players in their respective sectors over the past 12 months. Some of them have even carved out completely new niches within the vast health care ecosystem that didn’t exist a year ago.
As some informed observers of the high-flying health tech space quipped, “Flannel is the New Black,” when it comes to innovation in health care and big bets in health tech.
Take for example Bind, a Minneapolis-based startup health plan that has already raised a jaw-dropping $82 million. After occupying last year’s top position on the list for its ability to use data science and artificial intelligence (AI) to analyze existing claims data, Bind had a banner year. The company has been expanding its services across multiple new areas of coverage, while empowering customers to understand what they are really paying for with their health plans, which makes it easy to compare treatment options, prices and quality. Bind, along with fellow Minnesota wunderkind health insurance startup Bright Health—which just announced the closing of $635 million in Series D financing in December, on top of over $400 million of funding in previous rounds (putting its total raise now over the billion dollar mark)—have chiseled out completely new offerings in the health insurance space, a sector that, less than a decade ago, was considered nearly impenetrable due to the vast resources needed to scale a business of that nature.
“It still amazes me the number of investors that haven’t taken full advantage of the ‘flyover tech’ ecosystem,” observed Jodi Hubler, managing director of Lemhi Ventures, a venture capital firm that invests primarily in early- to mid-stage health companies in the Midwest and Rocky Mountain regions. “Many places in Middle America are actually centers of innovation and deep domain knowledge not only in health care, but in medtech device and services as well,” added Hubler, referring to the largest players in health care and medtech, like UnitedHealth Group, Medtronic, Cardinal Health, Humana and Anthem—all of which have main bases of operations in between the coasts.
“It’s common sense economics—every dollar of capital goes further in these locations, and the access to talent from developers to board members comes with differentiated experience and knowledge,” Hubler told Observer. “In places like the Midwest, people don’t play in health care, they’ve lived it… that experience and intuition is invaluable.”
Another big winner from last year’s list was Nashville-based SmileDirectClub, a tele-dentistry startup that produces direct-to-consumer 3D-printed clear aligners. In September, the teeth-straightening startup went public, raising more than $1.3 billion at an initial market cap of roughly $10 billion, more than three times its most recent private valuation. And although the stock price has since clawed back some of those ebullient IPO gains, it’s yet another shining example of a flyover tech success story.
Flyover Tech Is Now a ‘Badge of Honor’ in Health Tech
For serial health care entrepreneur and founder of San Francisco-based Roam Analytics Alex Turkeltaub, there is gold to be mined in Middle America. “Hubs like Raleigh, Columbus and Nashville, just to name a few, are quickly becoming known as exciting centers of innovation in health care. With strong legacy technology and health care systems, it’s only natural that these local ecosystems will fuel the next generation of disruptors in digital health,” observed Turkeltaub, who recently stepped down as CEO of Roam and is setting up a venture fund that focuses on the intersection of AI and health care. The fund will look to make strategic investments in major health tech hubs across the country, as well as in emerging overseas markets like Brazil.
“The term ‘flyover’ used to be somewhat derogatory, but now it’s a badge of honor in health tech. Entrepreneurs in the middle of the country know that technology can’t exist for its own sake; it has to be combined with functional business models to deliver real value to patients and investors alike,” added Turkeltaub. “Any serious health care VC who isn’t making monthly visits to places like Minneapolis or Chicago is completely missing the boat.”
Chicago, Nashville and Minneapolis Are Emerging as the New ‘Silicon Valleys’ of Health Tech
Although there are entries on this year’s list from a wide swath of cities across the country, experts and insiders repeatedly point to the surfeit of companies emerging from three major hubs of innovation in health care from Middle America: Nashville, Chicago and the Twin Cities of Minneapolis and St. Paul.
“With a diverse set of headquartered legacy companies spanning the entire spectrum of health care, regional hubs such as Nashville, Chicago and Minneapolis will continue to produce industry-leading innovation and transformation in the sector. These are the new hotbeds in health care,” noted Sara Ratner, a veteran health care industry insider who is one of the nation’s foremost experts on government-run Medicare and Medicaid programs.
Observer spoke with health care experts from across the U.S. to offer their thoughts about the biggest emerging trends at the 2020 J.P. Morgan Healthcare Conference and the sector’s continued interest in flyover tech. They were also asked to highlight some of the hottest companies in between the two coasts that will be feted in San Francisco this week. Like last year, the current list is not a ranking in the traditional sense—the companies singled out are in different stages of development and growth and, for the most part, are positioned in non-competing verticals; rather, the list is a snapshot of 20 early- to mid-stage startups that have caught the attention of health care insiders from around the globe and have one thing in common: they all hail from what many a New Yorker might describe as ‘flyover country.’
And now, here is Observer’s 20 Hottest Companies in ‘Flyover Tech’ at the 2020 J.P. Morgan Healthcare Conference.
1. HistoSonics (Ann Arbor, Michigan); Capital Raised: $87 Million
Non-invasive cancer treatment. Let those words sink in. By using technology similar to an ultrasound, this new interventional therapy will transform nearly all forms of cancer detection and eradication. In some respects, the company’s flagship product is not unlike the “healing machine“—the technology central to the plot to the 2013 Matt Damon thriller Elysium set 134 years in the future.
Led by veteran health care executive Mike Blue, the company’s non-invasive robotics platform and novel sonic beam therapy is awaiting full FDA clearance, but the company has already announced reams of promising new clinical and preclinical data, including successful human trials in Spain. In April of last year, HistoSonics closed a $54 million C-Round led by Varian Medical Systems, Inc., the global leader in radiation therapy and oncology solutions, and included Johnson & Johnson Innovation and the State of Wisconsin Investment Board, among others. Initially targeting liver and pancreatic cancer, HistoSonics’ Robotically Assisted Sonic Therapy (RASTSM) combines advanced robotics and imaging with a proprietary sensing technology to deliver personalized treatments with unparalleled precision and control. In layman’s terms, the tech uses sound energy to generate pressures strong enough to liquify and completely destroy targeted tissues at sub-cellular levels.
Meanwhile, HistoSonics is busy building a new HQ in a Minneapolis suburb. “Our tech was born in the labs of the University of Michigan, but we quickly realized we needed to be at the epicenter of health care innovation, which is why we decided to move our base to Minnesota,” explained Blue. “This is where all the action is right now in health tech.”
2. Olive AI (Columbus, Ohio); Capital Raised: $72.8 Million
Over one trillion dollars are spent every year in the U.S. on health care administration. Not on doctors, needles, meds or IVs, but on pens, paper, IT and something called ‘system integration.’ It’s a huge outlay—and the fact that much of that spend could be better directed toward treating patients and saving lives is what constitutes the driving force behind Ohio-based startup Olive AI.
CEO Sean Lane and the team at Olive understand that hospital employee time is money, which is why in the last year, their AI-powered workforce has become the utility player for over 500 individual hospitals around the U.S., handling high-volume, administrative workloads. Olive’s automated workforce takes on the minutia of the often repetitive paperwork that plagues nearly all sectors of health care—from human resources and IT to supply chain management and revenue cycle tracking—allowing employees to focus on the important, big picture aspects of their work. Convenient, efficient, fast and accurate, Olive AI is an overworked employee’s dream assistant, and the venture world, which has plowed over $70 million into the company thus far, seems to agree.
3. NightWare (Minneapolis, Minnesota); Capital Raised: Undisclosed
The highly secretive NightWare was on last year’s hot list, and while it is still not disclosing its fundraising totals (one of the advantages of not raising with institutional investors), the company continues to make big strides in the treatment of PTSD and nightmare disorder, a condition affecting over five million Americans and hundreds of thousands of U.S. vets. Over the past 12 months, NightWare received official “Breakthrough Status” designation by the FDA, which is only given to treatments that, according to the FDA, “demonstrate substantial improvement on a clinically significant endpoint over available therapies.” In plain English, NightWare might very well become the first prescribable digital therapeutic for a key symptom of PTSD. It’s a big deal coming to an Apple Watch near you.
4. Eyesafe (Eden Prairie, Minnesota); Capital Raised: $9 Million
Projecting Apple’s resurgence and ultimate market dominance in consumer tech, years before the iPhone, made tech-watcher Gene Munster something of an oracle on Wall Street. Now a founding partner at tech-focused VC Loup Ventures, Munster has become a regular fixture on the business news circuit as he shares his hot takes on Tesla, Apple, Amazon and the tech industry at large. Munster believes Eyesafe, a privately held company that is advancing consumer electronics with its blue light protection technology, has become an influential player, building standards for safeguarding users’ eyes from the intense, albeit invisible, blue light that Harvard Medical School says “has a dark side.”
“I don’t have a financial stake directly or indirectly in Eyesafe,” cautioned Munster. “But brands like Dell, HP and Lenovo are becoming increasingly aware of the health dangers posed by blue light. Eyesafe sits atop a very short list of solutions that large tech companies are turning to for help in designing and implementing safer displays that maintain color performance. While nascent today, Eyesafe’s long-term addressable market is significant, given that over time, some form of blue light protections will likely be mandated in all displays.”
In fact, Eyesafe has already cut impressive deals with Dell and aftermarket screen-protector leader ZAGG, distributed in Verizon, AT&T and T-Mobile stores across the nation, as well the major component suppliers in the electronics industry. And with the passage of the State of California’s recent “Blue Light Resolution,” it seems Munster’s prediction of regulation is happening fast, putting Eyesafe in pole position to own the low blue light market and, in the process, seize the mantle as the “Intel Inside” of health and safety across consumer electronics.
5. MyMeds (Minneapolis, Minnesota); Capital Raised: $8 Million
Your doctor prescribes some medication and tells you to pick it up at the local pharmacy. Once you show up at the Duane Reade or CVS, an officious-looking individual in a white lab coat gives you a brief glimpse of an amber colored pill container, mumbles a word or two of advice and then places your prescription in a white bag, along with an intimidating piece of paper full of fine print, sending you on your way. Now, you are on your own; it’s just you, a dozen or so pills, and a piece of paper written by a lawyer who went to medical school, or maybe the other way around.
Sound familiar? Today’s medication experience is broken, and with the phenomenon of medication non-adherence emerging as the biggest issue driving up health care costs across the entire sector, MyMeds is bringing to market a suite of solutions unlike any other in the digital health space.
“We are redefining the medication experience so people are never alone and always have access to their own data,” said MyMeds founder and CEO Dr. Rajiv Shah, whose company was recently selected to join SAP’s prestigious accelerator program in New York City. “Our patented Digital + Human ACE Medication Experience is an ecosystem that connects patients, caregivers, providers and payors in real-time.” In more plain speak, Shah’s MyMeds is laying pipe that connects doctor, pharmacist, you and your health insurance in ways that have never been possible before, savings costs and ensuring better health outcomes.
The experts Observer spoke to believe that 2020 will be a breakout year for MyMeds, as it rolls out its integration with SAP, launches a new real-time Medicare Stars product and unfurls the much-anticipated MyMeds Connect™, a secure real-time prescription data connectivity engine—a real game changer in light of Washington’s focus on medication history data rights. According to Fox Business Network analyst Ethan Bearman, who follows the booming medication non-adherence space, MyMeds has the potential to become a billion-dollar company in the coming years.
“Some health companies are really smart with their tech or business model, while others are just plain lucky in that the regulatory environment sways in their direction at just the right time,” Bearman told Observer. “MyMeds is both smart and lucky, which is why it wouldn’t surprise me if Dr. Raj is able to launch his own version of Tres Comas Tequila sometime in the next few years.”
6. Regroup + InSight (Chicago, Illinois); Capital Raised: $19 Million + Undisclosed Private Equity Backing
While it may be unorthodox for two companies to be named in one spot, a recent merger between Regroup Telehealth and InSight Telepsychiatry deserves the spotlight. The two companies merged in late 2019, and the combined company is now packing a lot of heat, making it one of the largest and most comprehensive telepsychiatry service providers in the U.S. The new entity is tackling mental health care disparities head on with their unique suite of individualized telehealth services.
Many times, being geographically, economically or socially isolated means that patients with mental health issues don’t have access to the specialized psychiatric care that they require. Regroup + Insight is connecting patients from one end of the country to the doctors and specialists they need to see, irrespective of their physical location. With a high-capacity data pipe from the physicians’ location to the clinical setting, the Regroup + Insight tie-up enables doctors to treat, consult and prescribe medication from afar and coordinate remotely with the patient’s local health care support team.
Like several other companies on both this year’s and last year’s lists, Regroup was born inside of Chicago’s Health Incubator, Matter, which has emerged as a breeding ground for some of the most innovative and fast-growing companies in digital health. Now all their C-Suite needs to do is come up with a name for the new combined entity.
7. Revel Health (Minneapolis, Minnesota); Capital Raised: $17 Million
Revel Health is rewriting the playbook for how health plans talk to their members. Gone are the days of the robocall with a voice that sounds entirely too enthusiastic reminding you that it’s time for another prostate exam or a mailed form letter that looks like an audit notice from the IRS reminding you that it is flu-shot season.
After initially catching Observer’s eye late last year, the experts we spoke to were impressed with not only the company’s tech, but also its savvy application into real-world, actionable results. Revel uses lessons that consumer marketers and Big Retail pioneered and is applying them across the health care marketplace. Revel helps members stay healthier by connecting them with their health care support system through sophisticated AI, which culls and analyzes mind-boggling Big Data sets and translates them into personable and highly personalized health action communication. Under the leadership of veteran health care CEO Jeff Fritz, Revel is leading a revolution in preventive health care and is quickly becoming a secret weapon for major health plans.
8. Owlet (Lehi, Utah); Capital Raised: $48 Million
Perhaps it isn’t a coincidence that Utah-based Owlet Baby Care was started in the same state that has the largest average household size in the U.S. Or maybe the team at Owlet just knows how hard it is raising a child, much less two or three, which is why they are betting big that over-protective parents want more than a simple nanny cam to keep an eye on their brood.
Owlet is gaining traction with a product set that provides parents with real-time, non-invasive video and audio monitoring, allowing for the child’s blood oxygen level, heart rate, temperature and sleeping patterns to be monitored and tracked by an app easily accessible on any worried parent’s smartphone. Founded by a team of passionate parents in 2013, this Silicon Slopes company is taking the baby monitoring game to an entirely new level and investors love it.
The company’s newest innovation, the Owlet Band Pregnancy Monitor, is on track to be the hottest product in baby-care tech this year, having already won two distinctive awards at the Consumer Electronics Show for Best Wearable and Tech to Change the World.
9. PhysIQ (Chicago, Illinois); Capital Raised: $25 Million
PhysIQ can detect the smallest, most subtle changes in an individual’s biosensory data and can alert care teams to potential problems far before they would surface during a regular check-up. The technology enables doctors to see around corners by applying sophisticated, FDA-cleared physiological analytics to extract personalized health insights. This Windy City startup uses software that was originally designed for data-tracking on jet engines and nuclear power plants, where the smallest performance deviations can pose immensely profound dangers. Now, PhysIQ is taking that same approach to performance calibration and applying it to the human body; it tracks data around the clock to capture a patient’s standard bodily rhythms and tempos and packages the data into neat, digestible bundles for clinical teams all around the country. Like several other entries on this year’s list, PhysIQ is a product of downtown Chicago’s Matter health incubator.
10. Pops! Diabetes (Oak Park Heights, Minnesota); Capital Raised: $8 Million
Siri and Alexa: Meet Mina—every diabetics’ new best friend and one of the latest products from Minnesota-based Pops! Diabetes, a company which is upending the consumer side of the nearly $200 billion global diabetes market. CEO Lonny Stormo believes that while self-care should take precedence, life oftentimes gets in the way, which is why his consumer-first approach to diabetes management has focused on platforms such as Mina that can step in and do important monitoring on a patient’s behalf. “Mina sent an alert to my wife when my blood-sugar read 60. She was able to get in touch with me and my doctor immediately and make sure we addressed the situation promptly,” Stormo recounted to Observer. “Mina really helps me own my diabetes, and not let the diabetes own me.”
Mina is a state-of-the-art chronic care management platform that tracks health management for diabetics and its always on; cloud-based accessibility means that an individual’s care support team, from loved ones to doctors, can be instantly alerted about a potential crisis by receiving an alert from Mina.
Simplifying the diabetes management business is a huge area of focus for both medtech and health care.
Stormo, a Medtronic alum, will be kicking off a new round of capital raising at this year’s J.P. Morgan Healthcare Conference, and his dance card is filling up quickly. “We have been fortunate to be coming to market just as the interest in virtual care and diabetes management is near or at the top of the shopping list of many digital health VCs,” offered Stormo.
11. DispatchHealth (Denver, Colorado); Capital Raised: $68 Million
They seem like genius ideas: Need a ride? Hail an Uber. Hungry? Ping GrubHub. But what about if you need a doctor? Colorado-based DispatchHealth is proving that with technology, on-demand health care at your doorstep is not only possible, but also a viable business model. In a few taps, via the Disptach app, a board-certified medical team will come to your home, office or wherever you need them to be, equipped with all the tools necessary to tackle whatever specialized care you might need.
As access to medical care becomes increasingly consumer-focused, it seems that many health tech investors believe that visits to traditional brick-and-mortar health care facilities will be reserved only for the most serious of situations.
12. Learn to Live (Minneapolis,Minnesota); Capital Raised: $9 Million
There is no shortage of well-funded startups looking to stake out their own territory in the red-hot digital mental health therapy space. Health plans, large employers and universities, governments and branches of the military, as well as the VA, among many others, are keen to offer online CBT (cognitive behavioral therapy) to their members, students and employees.
In a recent Observer profile of the digital mental health space, Learn to Live was highlighted as one of the innovators in the sector, pushing the industry to adopt more serious, evidenced-based approaches to digital mental health treatment in contrast to many of its competitors, which, despite having raised significant amounts of capital, seem to be dabbling in what can best be described as different flavors of “pop psychology.” 2019 was a banner year for Minneapolis-based Learn to Live, inking scores of key new accounts, including a collaboration with Blue Cross Blue Shield of Massachusetts, as well as landing a coveted billing in Express Scripts’ Digital Health Formulary.
Learn to Live’s co-founder and CEO Dale Cook grew up in Bogotá, Colombia, the son of missionaries, and the first-time entrepreneur has certainly infused Learn to Live with a sense of mission and purpose. The company recently announced the launch a new product tackling substance use, which makes it among the first to market to address this clinical need.
13. Lifesprk (St. Louis Park, Minnesota); Capital Raised: $36 Million
Senior or geriatric care is among the fastest growing segments in health care. The nearly $740 billion elderly-care market is ripe for disruption, and Minnesota-based Lifesprk has adroitly carved out a commanding position to capitalize on this burgeoning segment of the health care landscape. At its core, Lifesprk is all about bringing a comprehensive suite of support services to elderly patients, empowering them and their families to stay in control and enabling them to live the life they want and to retire on their own terms. But behind the scenes—and this is why founder and CEO Joel Theisen has become something of a superstar within the national senior care marketplace—is the data.
Lifesprk is collecting and integrating data that has either been siloed, or not even captured at all, to develop a personalized Electronic Life Record, or ELR, an innovative platform that is as revolutionary to senior care as the Bloomberg Terminal was to global financial markets. By aggregating huge data sets focused on the individual, Lifesprk can quickly identify and even suggest personalized services at the appropriate price point to meet the needs any life scenario a senior might encounter. The result is longer, fuller lives, lower costs and a booming company.
14. IDx (Iowa City, Iowa); Capital Raised: $55 Million
The eyes are all-important gateway into our mind, body and, some might say, soul. IDx’s flagship product, the IDx-DR, is the first FDA-approved autonomous artificial intelligence (AI) platform that uses software to analyze images from a high powered camera for evidence of retinal lesions typically associated with the early onset of blindness from diabetes. Founded by an ophthalmologist originally from the Netherlands who moved to the Midwest to practice medicine at the University of Iowa, this startup is revolutionizing the early detection of blindness, a common affliction associated with diabetes, which afflicts roughly 8.5% of the global population.
The company’s secret sauce is its ability to scale by sidestepping the need for a clinician to interpret the results of its retinal scans, making the data more widely available by health care providers who are not normally involved in eye care.
15. Sera Prognostics (Salt Lake City, Utah); Capital Raised: $151 million
Mothers-to-be and physicians are increasingly turning to Utah-based Sera Prognostics for early prediction of a woman’s individualized risk of premature birth and other pregnancy-related complications. The company is a real game changer, having developed a suite of diagnostic tests designed to give women and their physicians the time needed to make individualized treatment and care plans. The company’s flagship product, the PreTRM blood test, is the only clinically recognized bio-marker available to the public at large.
Dr. Garrett Lam, Sera’s chief medical officer, commented, “I’ve shared in the heartbreak and tragedy caused by complications of pregnancy throughout my career. Our work at Sera, to identify risks early in pregnancy, will assist doctors, positively impact mothers and benefit the health of newborns to make a significant difference in our world.”
The health care investment community is betting big on Sera becoming the gold-standard for early-risk detection in expectant mothers and a global leader in high-value women’s health diagnostics. Like many other entries on this year’s list, Sera is solving a specific set of issues—in this case, by delivering pivotal information to patients and physicians—that will play a broader role in improving the economics of the entire health care ecosystem.
16. Aunt Bertha (Austin, Texas); Capital Raised: $22 Million
In the U.S., there are thousands of nonprofits and social care providers set up to serve those in need, but the reality is that navigating the complex maze of which organization does what is nothing short of daunting for the average person in need. For many, what should be a simple and straightforward process, becomes time consuming, leaving many frustrated to the point of giving up. Bottomline: too many Americans are needlessly suffering despite a surfeit of accessible resources from charities, NGOs and nonprofits. Enter Aunt Bertha, an Austin-based platform that connects people seeking help and the verified social care providers that serve them. Aunt Bertha is the “favorite Aunt you can trust,” powering the country’s most comprehensive online directory of social service organizations.
But Aunt Bertha is more than just a ‘Yellow Pages’ for social services; the reason the company has become a favorite among VCs is its ability to tap into a largely overlooked, but critically important, aspect of the health care ecosystem, offering big brand health care customers solutions with advanced features like EHR (Electronic Hospital Record) integrations and giving caregiver teams a more complete view of a patient’s global support environment.
17. AxialHealthcare (Nashville, Tennessee); Capital Raised: $26 Million
Presidential candidates on the campaign trail often talk about the nation’s runaway opioid epidemic. According to the 2018 National Survey on Drug Use and Health, over 10 million Americans aged 12 and older misused opioids in 2018, and the impact on communities across the country has been devastating. Nashville-based AxialHealthcare is teaming up with hospitals and caretakers around the country to combat opioid abuse by leveraging state-of-the art analytics to identify patients at risk, prevent escalation of their conditions and support appropriate treatment enrollment and adherence. Axial is on the frontline of a deadly diseases (nearly 130 Americans die each day from opioid-related abuse) and an immense marketplace; last year, over $200 billion was spent combating the opioid epidemic in the U.S.
Axial’s approach is predicated on a high-touch, community-based approach that delivers clinical metrics and financial outcomes by managing the cost of care while supporting sustained recovery efforts for patients diagnosed with opioid use disorder. Newly-minted CEO Carter Paine—the former president and COO of value-based care manager naviHealth, who brings a career’s worth of insight from his time working with companies in the IT and health services world—will look to expand the Axial platform’s reach, which now covers nearly three million people.
18. Benovate (Minneapolis, Minnesota); Capital Raised: $6 Million
Although no one can find the original tape recording, the quote, “Let food be thy medicine, and let medicine be thy food” is famously attributed to the ancient Greek physician Hippocrates—often regarded as the father of all medicine. Whether Hippocrates actually said it or not, it’s increasingly clear that our less than ideal 21st century diets are the root cause behind a host of modern health issues, and Benovate is one of the leading disruptors in the “food as medicine” movement, mixing up an elixir of tech, AI, nutrition and health care industry knowledge to market their trademarked Gx product (a riff off the pharmaceutical ‘Rx’ with ‘G’ for grocery).
Benovate is wellbeing 2.0. Its Gx app is breaking new ground in enabling the entire health ecosystem, from doctor to insurance provider, to prescribe and reimburse everyday foods, like a cucumber, which is packed with valuable nutrients. Under the seasoned guidance of company CEO Mark Walinske, a 30-year veteran of the health care space, Benovate’s Gx product aims to transform your local grocery into the neighborhood pharmacist.
19. Abilitech Medical (St. Paul, Minnesota); Capital Raised: $9 Million
Fresh off a $7.4 Million Series A financing round, Minnesota’s Abilitech Medical has a gust of arctic wind at its back. CEO Angie Conley has collected so many business awards in the last year that she is probably running out of room atop her fireplace mantle. And that’s a good thing because Abilitech is a company with a lot of heart in addition to solving a very serious health challenge—enabling those with upper-limb neuromuscular conditions to function independently.
The company’s first product, the Abilitech Assist, is a powered orthotic device providing functional assistance and support to both the elbow and the shoulder, improving the lives of those affected by muscular dystrophy, multiple sclerosis, spinal cord injury and, in some cases, those who have suffered a stroke.
In 2020, the company is poised to earn FDA registration, undergo clinical studies and begin widespread commercialization of the Abilitech™ Assist, which has made many VCs at this year’s confab in San Francisco eager to get some quality time with Conley. Observer isn’t the only publication to have realized the potential of this game-changing company; they’ve already received recognition as a Top 10 Medical Device Startup in the country by Medical Tech Outlook magazine, a Top 10 Promising Company by the Rice Alliance, and was touted as a Top 20 Medical Device Startup by MassDevice.
20. Ōmcare (Bloomington, Minnesota); Capital Raised: $9 Million
What’s the size of breadbox, looks like a coffee-maker designed by Apple and dispenses pills? No idea? It’s the Ōmcare home medicine dispenser, equipped with a pair of Wi-Fi-enabled interactive cameras that will enable caregivers to watch grandma in real-time not only handle the packet of pre-loaded pills (at the right time), but also swallow them as well (ergo the second camera!) to ensure there is none of that “hide the pill under the tongue trickery.” The Ōmcare technology, which was adapted from founder and CEO Lisa Lavin’s previous intelligent treat dispenser for pets startup, has a deadly serious mission: reduce errors in medication and maximize adherence in the elderly community.
Ōmcare was recently given a big boost by the addition of long-time health care veteran Jeannine Rivet to its board. Rivet, the former executive vice president of UnitedHealth Group, one of the world’s largest publicly-traded health care corporations, believes that remote care is the way of the future and that companies like Ōmcare, which enable elderly patients to stay independent longer, make sense not only in terms of the economics, but also by meeting the needs of seniors who desire to age in place.
“I began my career in health care as a nurse, and so I know first-hand the challenges and constraints placed upon caregivers,” Rivet explained. “Although in its early stages, Ōmcare has the potential to revolutionize medication non-adherence among elderly and others struggling to manage chronic or complex health conditions.”
Ōmcare’s Home Health Hub utilizes audio and visual messages, which lets caregivers and care teams monitor medication adherence, and its multi-dose packaging is specially designed in collaboration with pharmacies so that correct dosage consumption is no longer an issue.
Finding Diamonds in the Rough
The annual J.P. Morgan Healthcare Conference sets the tone for the rest of the year when it comes to the biggest trends crisscrossing the global health care industry. Last year, the surfeit of bold health care innovators emerging from places like St Louis, Missouri and Columbus, Ohio, for example, wasn’t a surprise to industry insiders, but it did appear to catch some of the coastal business media who only breathe in that rarified air of Silicon Valley somewhat by surprise. But this year, VCs, Big Pharma, big health care and the business media are well aware that some of the biggest stars at this year’s conference will hail from ‘flyover country.’
Aly Lovett, a partner at New York City-based Radian Capital, a growth equity firm with a strong presence in the health care software space, openly embraces looking for investment opportunities in cities typically overlooked by most traditional health care VCs. “The knowledge base required to build a leading technology company is no longer concentrated in just a few cities, and capital is starting to follow that trend. Lower costs, higher quality of living and more diffused access to great talent make these smaller cities highly desirable places to start businesses,” commented Lovett. “There are many amazing angels and seed funds in these regions that can help get companies started, and we think there is an opportunity for Radian to provide growth equity to support these businesses in their next phase of growth.”
But if Lovett has been holding on to something of a secret, it would seem that her secret is now out in the open; capital far and wide is searching for the new, new thing in health tech from flyover country, and many will be using the J.P. Morgan confab as an opportunity to get to know them.
No matter where they call home.