Rishi Nayyar, co-founder and CEO of PocketHealth, is photographed outside Toronto General Hospital on Sept 20, 2022. Hospitals and healthcare sites across North America use the company’s platform to help patients access their medical images.Fred Lum/the Globe and Mail
PocketHealth Inc., a Toronto company that is transforming how patients receive digital medical images from health care providers, has raised $45-million in venture capital.
The deal, announced Wednesday, was led by Toronto’s Round13 Capital, and backed by new investors Deloitte Ventures and Samsung Next as well as past investors Questa Capital and Radical Ventures.
The parties wouldn’t disclose PocketHealth’s valuation or financial details. But PocketHealth chief executive Rishi Nayyar said in an interview that the deal valued the company “materially higher” than when it raised $20-million two years ago.
That would make PocketHealth an exception during what has been a prolonged slump in the tech sector since late 2021, as many funders exacted tougher terms from startups that needed fresh funding.
The eight-year-old company, founded by Mr. Nayyar and his brother, Harsh Nayyar, provides an online platform for patients to access their digital medical images from health care providers over the internet. That replaces a cumbersome, antiquated, costly and time-consuming process where hospitals and imaging centres burned copies of the files onto compact discs that patients had to physically pick up.
It also saves patients the time and effort of retrieving their images in person, then having to keep track of the discs if they need to share the images with other doctors. That’s particularly useful for Kirsty Dickinson, a mother of three in Burlington, Ont., who has to visit 11 specialists in three hospital jurisdictions to manage care for a rare connective tissue disorder that leaves her prone to bone dislocations.
“No matter where I am in our health care systems, I have all my CT scans, my MRIs and Xrays handy” – 62 in all – available on Pocketlink, she said. “Having access to those records in a timely manner means continuity of care and reduction of redundancies for our health care systems.”
PocketHealth is now offered through 775 hospitals and imaging centres, including Toronto’s University Health Network, Southern Illinois Healthcare and several hospitals in the greater Ottawa area. About 1.5 million people have received images using its service.
Ellen Odai Alie, director of medical imaging with the Ottawa Hospital, said that more than 400 people have used PocketHealth since it rolled out in January, “which tells us clearly this was a good initiative for our patients. People are seeing the value already. We anticipate it will grow as more patients see it.”
She said the hospital plans to start retiring its CD-burning service this year, which typically provides discs to more than 2,500 patients annually. Toronto’s Unity Health was able to save more than $120,000 a year by closing its image-burning operation and redeploy staff to other tasks.
The Nayyar brothers were inspired to start a company and modernize medical image-sharing after Harsh, the chief technology officer, had to retrieve images the old-fashioned way in person after injuring his ankle while working in Silicon Valley in 2013. They built PocketHealth with no outside funding for four years, until demand for their secure service took off early in the pandemic, as people were discouraged from visiting hospitals except when necessary.
PocketHealth tapped its first outside funding in early 2020, raising US$6.5-million from Radical, an artificial intelligence-focused venture capital firm in Toronto. It increased annualized revenues seven fold over the next two years, then quadrupled them in the following two years as it expanded across Canada and into the U.S. and added features to its platform. The new tools, which incorporate AI, provide lay explanations for medical terms in radiology reports, and suggest follow-up recommendations for patients and questions they can ask their doctors.
Mr. Nayyar, the CEO, said three times more patients are now enrolling on the platform – tens of thousands a month – now than nine months ago thanks to the new features: “When you do a lot more for the patient you grow your total addressable audience. Instead of just giving patients access to the thing that sparked their care journey, we’re helping them understand what’s happening and continuing with them.”
The company relies on its health care partners to advertise to patients, providing posters with QR codes they can post in their imaging wings, and providing tools they can use to link to PocketHealth from their electronic medical records systems that patients access online.
Mr. Nayyar said the company is looking to double its 110-person headcount in the next two years, and invest product and engineering to build new functions. PocketHealth charges patients $10 a month or $49 a year, although it also offers a free version and waives fees for people who can’t afford the service.
The investment is the first in the health care space for both Round 13 and Deloitte Ventures. The investment “was the culmination of a year long process to find the best Canadian health care technology opportunity,” said Brahm Klar, Round 13′s managing partner, in an interview.
He added that PocketHealth provides value for both patients and health care providers: “If you do that well, there’s an amazing business model.”