[Updated 5:42 pm PT] Redmond, WA-based Mobisante has pulled in some new cash to support its dream of making ultrasound technology available on low-cost, lightweight smartphones and tablets.
Mobisante has raked in $4.2 million of equity financing out of a deal that could ultimately be worth as much as $5.3 million, according to a filing with the Securities and Exchange Commission. A portion of the deal—$2.3 million—represents the conversion of prior debt financing into equity stakes, according to the filing. A total of 25 investors participated in the round. Mobisante has previously gotten investment from Seattle-based WRF Capital.
The company, which I first profiled in December 2010, went on to win FDA approval for its novel ultrasound-on-a-smartphone device in February 2011. The firm saw an early surge of interest in its tool among physicians in rural parts of the U.S. and around the world, where doctors have limited access to some of the more expensive portable ultrasound machines made by companies like SonoSite and GE, or the more powerful and expensive cart-bound ultrasound machines found in hospitals. Mobisante has been working on various iterations of its device, to provide the right balance of cost and capability to find a niche in the market.
[Updated comments from CEO]
Mobisante plans to use the money to expand its sales and marketing efforts, and to build up new cloud computing capacity to enable its customers to easily store, share, and analyze the ultrasound images they capture on their devices, CEO Sailesh Chutani says. The company currently has just under 10 employees, and a network of about 30 consultants, he says.
Chutani isn’t disclosing how many devices it has sold since the original product debut in November 2011, but said he’s seen “steady growth.” Mobisante has made a number of adjustments, however, based on feedback from customers in its early days. It now offers both a smartphone and tablet-based device, both of which typically sell for under $10,000 in various configurations, and offers its products for leases between $400-$700 a month, Chutani says. Customers made it clear they wanted the larger images, and the high image quality, they can get on a tablet device.
Mobisante is also aiming its product lineup at two distinct market segments—musculoskeletal medicine (sometimes called orthopedics/sports medicine), and point of care medicine, like in the emergency room. Those markets make the most sense, Chutani says, because they aren’t already saturated by existing ultrasound products, and Mobisante is able to offer a strong value proposition—a low cost product that can offer clear benefits.
While Bothell, WA-based SonoSite spent years educating physicians about the benefits of portable ultrasound for point of care medicine—for example, using ultrasound to help guide the placement of catheters so that patients wouldn’t get bleeding episodes or infections—this market largely didn’t materialize. Part of what’s different now, Chutani says, is that hospitals are facing penalties under the Affordable Care Act for making errors in those type of everyday procedures, so they they are being forced to think about how to get more efficient, and more serious about avoiding those complications.
The cloud computing piece could end up being the most innovative thing Mobisante does. Currently, the big proprietary systems sold by companies like GE, Philips, and Siemens produce vivid images, but they can’t easily be uploaded to cloud servers, making it extremely difficult for physicians to consult with peers who aren’t right next to them.
Unlike systems based on proprietary hardware, Mobisante’s system was built from the start on commodity electronics parts from smartphones and tablets, which benefit from Moore’s Law style computing improvements, and are equipped from the get-go to share images. So by coupling that hardware with cloud servers to handle the images, Mobisante believes it can get a competitive edge. Mobisante’s next task is pretty clear. Capture at least a small slice of of an overall market opportunity worth an estimated about $1.7 billion worldwide.
