Healthbox Investor Day Part 2 4/6/12


I posted earlier this week about the Healthbox Investor Day in Chicago, but only included the five startup presentations that I saw. I’ve heard from several people at the event about the other presentations and also wanted to update a couple of things from my last post.

Regarding Cara Health. I was informed that the name “Cara” means “kind” or “friend” in Gaelic, a reflection of the way that patients perceive the personal touch of Cara’s human phone calls vs. the automated calls or messages of its competitors. I was also informed that Cara forgot to put the ask in the presentation, but that it is seeking $1.2 million and has already had $300,000 committed, which probably means it will launch a US pilot soon if it hasn’t already. Anybody know of Cara pilots in the US? Also, I’d love to see the money used to hire a salesperson, preferably one with US healthcare experience.

Regarding the high amounts of money Healthbox companies are seeking, I was reminded of a non-dilution clause that Healthbox has in its contract with companies. When Healthbox invests and takes 7% equity, Healthbox shares are not diluted until companies raise $1 million or more. Strategically, companies want to hit $1 million so Healthbox gets diluted with the founders. That explains why most of the Healthbox companies were looking for investments of $1 million or more, numbers I think are too high given the stage of the companies. I knew about the clause, but somehow forgot and didn’t put together that it was the reason for the high capital needs. I’m curious — do other incubators have these non-dilution clauses?

Below are summaries of the the second five companies that presented Wednesday. I didn’t see these presentations myself, so it’s second hand.

DermLink. I was interested to see how this company would do. The value to patients is getting a fast response from a real dermatologist without having to wait six weeks for an appointment. It offers a concierge package so that PCPs can offer remote derm reads to patients at whatever price the PCP wants to collect. According to the DermLink website, the fee paid to the company for a dermatologist to read a photo is $99. I was told that the presentation at investor day stated the fee was $50 and the company expected to pay dermatologists $35 to look at a rash and send a prescription, if needed. I can see some patients willing to pay $50 for convenience, though I’m not really sure how many that would be. What I’d be more concerned about with DermLink is finding dermatologists willing to take $35 for diagnosis, remote treatment, and liability. If the fee is $99, the number of patients shrinks even though you might have an easier time finding providers. I think this model has to be proven in a very small geographic area before expanding or raising much money.

SwiftPayMD. Named one of 17 game-changing health startups for 2012 by Inc magazine, you must be excited to hear about this one. The company has a mobile app that allows docs to speak encounter / billing info into it. This is then used to generate billing information that is sent back to the staff at the doc’s office. The value is better, more timely charge capture leading to a shorter revenue cycle. The ideal client is a private hospitalist or specialist that sees patients in a hospital. The company wants to charge $99 per month for the service, which seems a bit high to me. I think WhitePlume offers the same mobile charge capture without the voice piece for free.

CareHubs. This was my biggest disappointment of the batch in terms on not validating the proposed concept. The company was trying to create geographically-localized online communities of care around practices. I was excited to see a company with a local approach, but apparently that didn’t work out, so the company is now using the same technology to create a community for health IT companies. The domain is www.healthcareinnovators.com. The site was used for demo day as a way for attendees to get information and share reactions from the day. To me, it sounds a little like a healthcare-specific AngelList or CapLinked, both of which are pretty awesome, though I’m not sure we need one specific for health. The site enables you to follow companies and people. I think it’s meant to facilitate more than just connections to investors, but also to business leads as well as providers that might be willing to give feedback on concepts.

Corengi. This service helps patients find clinical trials. It seems like it is leveraging the ClinicalTrials API and making it more user friendly to find and get linked to trials. I can’t imagine it is reinventing the wheel with a different list of trials. Initially it’s only for diabetes. It still needs to get consumers to the site unless it integrates it into a platform like a PHR, which you also still need to get consumers to use. Does anybody know how much money it is trying to raise?

UnitedPreference. The idea is to create prepaid cards that payers or self-insured employers can give to employees / members. The company funding the cards can customize what types of products (OTC meds, healthy foods, etc.) and merchants (gyms, natural food stores, etc.) are eligible with the card. The idea is to prioritize products and locations to maximize engagement and behavior change. The use of the card can be tracked. It’s a neat incentive concept. I’m not sure logistically how hard this is to set up with different merchants and for only certain products. Again, I don’t know how much money it is trying to raise, but I do know it has been meeting with investors.

I’d love any additional insights from people at the event. I also found a Chicago Tribune article on Healthbox, though it was mostly focused on SwipeSense.


Travis Good is an MD/MBA involved with health IT startups. More about me.

  • Paula

    Very thorough write up, Travis! Thanks for covering the HeatlhTech startup scene and the Healthbox teams in particular.

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