It might be too early to call Bellevue, WA-based Talyst a success, but its story certainly makes for a compelling case study. The company closed $8 million last month from existing investors OVP Venture Partners, Ignition Partners, and AIG Global Investment Group, but didn’t make an announcement. Why? Things have been too busy.
“We raised money to grow new markets,” says Talyst CEO Carla Corkern, who has just been named chairman of the board. “That’s what VCs like to invest in.”
Talyst is known for making software that helps pharmacies manage the flow of medications in hospitals and clinics. The idea is to automate the process of tracking drug inventory and filling prescriptions using smart management software and a touch-screen kiosk interface—sort of like going to a vending machine—and to do it in a safe, secure, and efficient way. The new markets Corkern wants to expand into are nursing homes and assisted living facilities, as well as prisons and other correctional facilities. Those facilities have many people who need medications, but may not have a pharmacist on-site, so they need an efficient way for a nurse or caretaker to package and dispense meds to patients.
“The long-term care market is a $2 billion market for facility-based automation which has a strong return on investment—needed for these times,” says Corkern.
To appreciate the significance of this new market strategy, you need to know the history—much of which occurred before Corkern joined the company. Talyst was founded in 2002 as Integrated Healthcare Systems, and raised some $29 million in venture funding in 2005 and 2006 (a total of $37.5 million prior to the latest round). By 2007, it had become a market leader in managing medications for hospital pharmacies.
But there was trouble brewing. Talyst had grown to more than 170 employees and wasn’t bringing in enough revenues. As Corkern explains, the company had 45 percent market share in hospital pharmacies, but that market was maturing (it is now more than 50 percent captured by existing players). So in 2007, Corkern was brought on board to focus on business development, and she was soon promoted to chief operating officer. She had previously served as chief operations officer for Vykor, an aerospace supply-chain company in Renton, WA. Having lived in Texas, she was also familiar with regulations involved in long-term care—particularly around the process of dispensing medications remotely, in which Texas was the national leader. “I came in to focus on diversifying the business and take it into new markets,” Corkern says.
As is often the case, the company had to take a step back before it could move forward. In 2008, Talyst laid off a large number of employees—it is now down to 102—and replaced outgoing CEO
