A wave of startups are popping up in the healthcare IT sector. As more doctors use iPads and patient records are being digitized, opportunities are opening up in this field.
Medivo, a virtual healthcare company in New York, is successfully exploring those opportunities. Sundeep Bhan, CEO and co-founder of the company is finding his second venture into the world of healthcare startups a lot easier than the first startup he was involved in.
"I have never seen this kind of an uptake," says Bhan.
Previously, Bhan was the CEO and co-founder of Medsite, a physicians' relationship-management platform, which was acquired by WebMD Health in 2006 for $41 million.
The experience and contacts Bhan and his management team have from Medsite have been useful in getting Medivo up and running.
“We know a lot of people that we didn’t before," he says. "We can get into place that first time around were hard to get into.” With the Medsite success in 2006, the team behind Medivo is no longer an unknown. It has seen a significant spike of interest in the company after the recent fundraising round.
“A lot of these opportunities are coming to us at this point," says Bhan. "As we evaluate ... we are starting to see additional areas that we could expand into.”
The Medivo founders owned most of the company prior to its Series A financing. Safeguard is Medivo's primary investor, with additional funding from Mentortech Ventures, Arc Angel Fund and Esther Dyson.
Bhan describes himself and his management as opportunistic entrepreneurs. They are always looking for potential targets and he says the company welcomes pitches from investment bankers.
In June 2010, Medivo acquired Wellness Physicians Network, a provider of compliance services for consumer lab tests. The acquisition was handled internally.
"This is not a roll up. That was not the idea," insists Bhan. But he says that acquiring bolt-ons makes sense if a potential target helps enhance Medivo’s core product PatientPath. It provides physicians with a patient-population overview and lab summary report.
Medivo works with physicians to enroll patients in PatientPath. It highlights patients whose lab results are out of ordinary, who are not in compliance with the doctor's orders or who might need extra attention from their physicians.
It brings them back into the practice by scheduling follow-ups and setting reminders, based on individual patient records. Bhan says that the company also enrolls the patients into support programs related to their conditions.
PatientPath launched on Feb. 16. PatientPath is free for patients and physicians, with health plans and pharmaceutical companies covering the costs.
Pharmaceutical companies are “moving beyond the pill” into management and compliance, while health plans aim to drive down costs, explains Bhan.
In March of 2011, the company started to receive revenue from pharmaceutical companies and is now focused on “delivering on” established contracts and expanding the sales force. The new sales will help market PatientPath to physicians and increase patient enrollment. The contracts in place are with top three health plans and three of the top 10 pharmaceutical companies.
Medivo is not interested in a sale at this time, though Bhan admits he and his team have thought about an exit strategy.
In the first quarter of this year, the company is deciding whether it will raise additional funds through another capital campaign, says Bhan. After closing its Series A financing round of $7 million in November, Medivo has been approached by number of interested investors and proposals for strategic partnerships. Clinical research organizations (CROs) have contacted Medivo in the past few months with approaches for strategic partnership.
Large traditional healthcare companies are looking for growth and Medivo demonstrates the opportunities in the current climate. He says that prior to such approaches Medivo has not considered partnerships with CROs.
“We are sub $5 million [in revenue] now but will be over $5 million [in 2012],” says Bhan. Within this year, the company expects to double in size, increasing the current number of employees from 25 to 50, as well as double its revenue. He expects that the company will make $100 million in five to seven years.
“We are onto something,” says Bhan.
Image credit: Medivo