Innovative HealthTech Startups Are Just What the Doctor Ordered In Phoenix

Via freeenterprise.com

His startup — launched with the aim of lowering healthcare costs (for patients and providers) and streamlining patient care and flow — was born out of both Launchpad Digital Health, a San Francisco-based accelerator, as well as Dreamit, a digital healthcare accelerator in Baltimore, Md.

“Having been accelerated on both coasts, we were faced with moving the company out of the Phoenix market,” Larsen told Free Enterprise. “What kept us here in Phoenix, and the reason I’m excited to be here as a telemedicine entrepreneur, is that there’s a really strong community here that does a phenomenal job of supporting early stage companies.”

One of the most active “cheerleaders” of area healthtech startups like his, Larson said, is the Arizona Innovation Challenge (AIC), run by the Arizona Commerce Authority. The AIC pours $3 million dollars annually into the ecosystem through technology commercialization challenges. As part of its “big-time investment in the most talented entrepreneurs who bring to market products that are literally changing the way the world works, and driving wealth and job creation for the state of Arizona,” the organization awards individual $100,000 and $250,000 grants to local innovative startups. eVisit won a $250,000 AIC growth acceleration grant in 2015.

A wealth of startup support also comes from fellow Phoenix tech startup founders, Larson, a seasoned ASU Entrepreneurship + Innovationventure mentor himself, pointed out. “One of the other things that’s incredible about launching here is how generous founders of other software companies are in particular,” he said, “with their time, with their advice, and with their expertise.”

Larsen noted that he’s been on the receiving end of exceptional network access due to the generosity and openness of several successful local healthtech venture founders, such as Brad Jannenga, CEO of WebPT, and from Clate Mask, CEO of Infusionsoft, provider of a widely used CRM, sales and marketing software tool.

“These are busy, accomplished entrepreneurs who have scaled to employ hundreds of employees,” Larsen said. “I wouldn’t get access to tech entrepreneurs in the community at that level, certainly not as easily or directly if I were in Silicon Valley. But, over here, I can pick up the phone, or write an email to Brad or Clate. I can ask them how to deal with challenges around scaling or other problems they encountered and overcame early on, and they’ll generally get right back to me with valuable first-hand insights. It’s pretty great.”

Beyond outstanding area network access and an overwhelmingly collaborative startup culture, Larsen also pointed to Greater Phoenix’s large aging population — and the many hospital systems that serve aging individuals in the city and surrounding area — for helping to stoke the sizzling medtech market. Some of the nearby medical centers health-focused tech startup founders seek to partner with include: Mayo Clinic Phoenix, Banner University Medical Center, St. Joseph’s Hospital and Medical Center and HonorHealth Scottsdale Shea Medical Center, to name just a few.

Further showing sustained, promising growth in Phoenix’s overall tech startup sector, the city of 1.5 million residents ranked among the top 25 rising American tech epicenters on the latest Innovation That Mattersstudy, a joint research effort by D.C. startup incubator and venture fund 1776, Free Enterprise, and the U.S. Chamber of Commerce Foundation.

Of the innovative startups making strides in The Valley of the Sun, also per the Innovation That Matters study, those in the health sector are some of the most vital. Clearly, the booming local digital health market demonstrates that Phoenix is well-poised to lead in this industry.

Helping to fuel the boom, some other notable healthtech startups to sprout up in the Phoenix area in recent years are: Neolight, which aims to eradicate jaundice throughout the world with its cutting-edge at-home phototherapy device; Nasseo, maker of a pioneering dental and orthopedic tissue integration system for titanium and other surgical implants; RightBio, a physician-founded firm that builds proprietary tech that measures critical biofluids; Hildeez Recovery Garments, creator of technology-enhanced orthopedic recovery garments designed to speed up recovery; and Arizona Medical Systems, developer of innovative interventional cardiology medical devices.

Barring eVisit, each of the early-stage companies listed directly above was incubated out of BioInspire, a local medical technology upstart incubator founded in 2009 with a mission to drive “economic development through providing early-stage funding and accelerating commercialization of bioscience technology and devices.”

Aiming to diversify Arizona’s economic growth, improve patient health and enhance area bioscience entrepreneurial training and mentorship, the BioAccel-affiliated incubator has infused the area’s healthtech entrepreneurial ecosystem with more than $2.4 million in seed funding thus far. The result, the organization claims, is an excess of $14 million in additional downstream funding from other local investment sources.

Several larger and longer-established healthcare companies are also contributing to the surge in digital health innovations bubbling up from the seat of what’s been dubbed “Silicon Desert.” Among them are Medtronic, a Minneapolis, Minn.-based publicly traded medical technology corporation that employs an estimated 900 full-time staffers on its nearby Tempe campus, UnitedHealth Group, a Fortune 100 health insurance corporation currently hiring for dozens of tech-related positions at its Phoenix location, and Dublin, Ohio-based Cardinal Health, Inc., a Fortune 500 healthcare services company with satellite locations in Phoenix, Mesa and Tempe, Ariz.

Doubling down on its commitment to technology innovation in healthcare from the grassroots level on up, Cardinal Health currently operates an innovation center in Phoenix where up-and-coming healthtech startups, such as Avid Radiopharmaceuticals Inc. and several others, collaborate with the corporation to develop new radiopharmaceutical technologies.

Marrying big business and small business in his own backyard, and at the national level, Larsen recently sewed up contracts with two of the largest healthcare systems in the U.S. during eVisit’s first year in operation — one with Adventist Health System and another with Ascension Health.

Looking ahead, for Phoenix’s burgeoning healthtech startup ecosystem to reach its full potential — and to compete with the likes of the medtech juggernauts that cities like Boston and Durham, North Carolina, have evolved into — Larsen said that area founders need to think and dream bigger. Most importantly, they must scale up and soon.

“Phoenix is well on its way, but it’s still lagging in entrepreneurs who are thinking bigger and are focused on growing their companies larger,” he said. “The best thing that could happen to the local startup ecosystem, in medtech and otherwise, is to have more companies growing at scale, fueled by bigger and better innovation and more venture capital.”

He continued: “It’s really about entrepreneurs getting to work and building things that are significant and not settling for a $10 million-dollar exit. They need to be zeroing in on 11- and 12-figure exits, and not just because that puts more capital into the community, but also because it shows other entrepreneurs thinking of starting up in Phoenix what’s possible here.”

Larsen’s own venture capital tally is none too shabby, totaling $4 million in seed funding for eVisit to date. When it comes to how he allocated the cash, you could say he put his money where his mouth is, using the funds to ramp up eVisit’s sales and marketing efforts, improve its telemedicine platform and, of course, grow its staff.

“Two years ago, when we first started out, we had six employees,” he said. “Today we have 55, and, by the end of the year, we’ll have 80. We’re on our way.”

 

 

 

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