Life Image has won further investor support after more hospitals have bought its new technology for exchanging medical images via the Internet cloud. The Newton, MA-based software startup has closed $5.2 million of a planned $10 million Series B funding round to finance increased sales, marketing, and product development, company co-founder and chief executive Hamid Tabatabaie told Xconomy.
Princeton, NJ-based Cardinal Partners, a new investor in the company, led the round. The round also included investments from all of the company’s previous backers, Tabatabaie said. Those investors that the startup has named include Long River Ventures, Massachusetts Technology Development Corporation, and Partners Innovation Fund. He said he expects to raise the rest of the planned financing round in the coming months. The firm has now raised about $12 million since its founding in 2008, the CEO said.
Life Image has stood out among the recent health IT startups to emerge in the Boston area. For starters, the firm has an ongoing alliance with the Hopkinton, MA-based storage giant EMC (NYSE:[[ticker:EMC]]) to develop online services for doctors and patients to exchange and store their CT scans, MRIs, and other medical images. Also, more than 20 hospitals have signed on to use the company’s technology, including renowned medical centers such as Massachusetts General Hospital (where some of its software was originally developed) and Memorial Sloan-Kettering Cancer Center in New York.
“We’ve proven the fact that large healthcare institutions like the Mass Generals and the Sloan Ketterings of the world are interested in leveraging the cloud to exchange imaging information,” Tabatabaie said. “Now we want to expand our market penetration.”
The company’s first software product, called Lila, enables hospitals to take patients’ medical exams stored on compact discs and upload them into the hospitals’ computer systems. Its technology also aims to get patients and doctors to use the power of the Internet and the cloud to exchange and store medical data. For both hospitals and patients, Tabatabaie has told me, CD storage of medical images is problematic because the images on them can be damaged and require physical transportation between locations.
In February, the firm launched a new service built on EMC’s Atmos cloud storage technology that gives trauma centers the ability to securely accept medical images over the Internet. It’s a step toward the consumer-focused service the firm has in the works to allow individuals to set up their own accounts to manage their medical images online, something that Tabatabaie has discussed with Xconomy since June 2009. The release of that offering is slated for next year.
There’s been a growing chorus of healthcare stakeholders saying that electronic sharing of medical images will save money. Last June, a group of healthcare providers and companies called the Image e-Ordering Coalition announced its formation and claimed that the U.S. healthcare system wastes between $3 billion and $10 billion per year on unnecessary imaging procedures. Tabatabaie said that his firm is a leader in providing services that enable electronic exchange of medical images. Yet others like eMix, a spin-off of San Diego-based DR Systems, are promising to provide hospitals and patients with similar capabilities.
Now Life Image has some additional financial firepower to take on its rivals.
