Have you read the book Exponential Organizations by Silicon Valley legend Salim Ismael? It’s billed as the playbook for 10X growth and impact. When I recently met with Joe Adams, Indianapolis-based serial entrepreneur and now senior vice president for strategic alliances at 3Aware, he highly recommended that I read it. Given the senior leadership team of 3Aware is responsible for $6 billion in M&A transactions, have founded and exited multiple Indiana-based companies and is poised to profoundly disrupt yet another industry, I think I’ll tap into this source of 3Aware’s mojo. This deal came to VisionTech through an individual referral, and I’m super excited VisionTech Angels investors have an opportunity to invest. Please read my conversation with Joe and make plans to participate in his and Bill’s virtual pitch on Wednesday, August 14 at 12 noon.
BP: You’ve said you’re fiercely loyal to Indiana and that’s one reason you’re courting Indiana investors.
JA: I was raised in Indiana, am a graduate of Indiana University, and have been involved in multiple highly successful startups since the mid 1970s. My very first startup was a collaboration with Dr. Don Brown, who is among the most successful serial software entrepreneurs in the Midwest. Later I was involved with Interactive Intelligence and Software Artistry. Over the course of my career, getting investors in Silicon Valley and Boston to look at us was difficult despite the vibrancy of Indiana’s tech scene. With 3Aware, we have a potentially exponential organization with an incredible leadership team that’s rooted in Indiana. We have amazing early investors from across the country and would like fellow Hoosiers to be part of our success. That’s why we’re excited to participate in VisionTech’s virtual pitch event August 14th.
BP: Explain the problem you are solving.
JA: The medical device industry is near and dear to us in Indiana. But this $500 billion industry is in turmoil due to shrinking margins and the increasing costs and time involved with regulatory compliance. As an example, the costs associated with new EU medical device regulations around recertifications of devices are predicted to exceed 5% of sales. Because of this and already thin margins, companies may have to pull as many as 30% of their products. The U.S. FDA is hot on the heels of the EU with their own time and resource intensive regulations.
Medical device companies are in dire need of a tech-based alternative to traditional clinical trials and manual re-certifications that consume scarce resources and threaten device viability and corporate profitability.
BP: Why is 3Aware the right solution?
JA: Medtech companies need a way to quickly and easily leverage real-world data about their devices that currently exists in electronic health records (EHR) databases maintained by health systems. We have the answer. 3Aware’s aiSurveillance Platform is a cloud-based SAAS solution that:
- integrates with EHR and other business systems.
- triangulates data from a variety of sources.
- links individual patients to their longitudinal experience with devices, allowing on-demand access to device-specific cohorts of patients.
- and facilitates the mining, analysis, and surveillance of patients’ structured and unstructured real-world evidence (RWE) data to understand indications, experience and outcomes.
Our platform automates post market studies, powers ongoing vigilance, and dramatically reduces the time and money needed to achieve this. It will literally stand the world of medical device manufacturing and compliance on its head – in a good way. Instead of 12 to 18 months for a post-market study, 3Aware can deliver study results in weeks and at a fraction of the cost.
BP: The benefits seem ridiculously huge.
JA: We truly believe that 3Aware is at an inflection point for the medical device industry. By automating post-market clinical analysis of data that resides in EHRs and is largely unusable in its current form, we enable medical device companies to secure compliance in 20% of the time and at less than half of the cost of traditional methods. Our analysis also provides ongoing access to data that can be used for other studies, to extend current devices into new applications or enhanced performance as well as support more accurate patient monitoring.
BP: What is the market opportunity?
JA: Our initial focus on medtech compliance and product line optimization supports $6 to $9 billion in annual recurring revenue. From there, we can expand into regulatory and safety surveillance, which has a total addressable market of another $56 billion. Further down the road, we can leverage into clinical outcomes analytics and total cost of care for a specific device. This, of course, appeals to health systems, payers, accountable care organizations. Market value to be determined.
BP: Where are you in terms of commercialization?
JA: We launched with our initial version of the aiSurveillance Platform and are currently in conversations with two dozen medical device companies, including six of the largest. Cook Medical was our first customer, Zimmer is onboard and there are others close to finalization. We’ve identified and targeted potential customers enabling $150 million in annual recurring revenue, with an active sales pipeline of nearly $5 million including top ten manufacturers. We are moving ridiculously quickly to scale to meet demand.
BP: How is the market responding?
JA: I wish you could sit in on our presentation to medical device companies. They get it immediately. They don’t get lost in the weeds; they ask “buy” questions. It’s really exciting.
BP: What kind of IP protection do you have?
JA: Our platform is enabled by proprietary technology. The basic platform infrastructure was initially developed by HC1. Less than two years ago, the 3Aware aiSurveillance platform application was developed as a joint venture with Cook Medical, Health Cloud Capital and the Mayo Clinic. Since then, 3Aware has been developing the 3Aware WorkBench, which has a patent application filed that protects systems and methods for managing, storing, organizing, and classifying clinical health data associated with medical devices. Soon to follow will be patent applications that cover a host of human assisted adjudication processes and procedures, which will lead to the holy grail of real-time adverse event notification and active surveillance.
BP: Any competitors?
JA: We are first to market. There are other companies out there, but they don’t have the breadth of capabilities or the automation that 3Aware already has or the future vision of 3Aware.
BP: Your leadership team is impressive. Let’s touch on that.
JA: 3Aware’s leadership team has combined experience of more than $6 billion in merger and acquisition transactions. Plus deep, deep experience in tech, medical devices and life sciences. Our CEO Bill Moss alone has five successful exits. Chris Brown, our CFO, is a founding executive of hc1 Insights, whose technology we use. Prashant Thumma, our CTO, was senior director at TelaDoc where he led enterprise architecture. David Kates, our chief data officer, is a leader in the linkage and analysis of healthcare data. And Amelia Hufford, our senior vice president of scientific affairs, came to us from Cook Medical where she led multiple clinical and regulatory science teams. We’ve stacked the deck!
BP: What investment round is this?
JA: This is an $8 million seed funding extension round.
BP: What is your planned use of funds?
JA: Pretty simple – we’re scaling to meet market demand.
BP: Give me three reasons VisionTech investors should invest in 3Aware?
JA: 3Aware is truly an inflection technology with the potential to redefine the medical device industry and how devices are validated, certified, and monitored for safety and performance. There is overwhelming market interest as evidenced by the global corporations we’re engaged with, the strength of our pipeline and current recurring revenue. We also have the leadership team to get it done.
VisionTech’s Wednesday, August 14 Pitch Event will have one virtual session only at 12 noon ET. Plan to join me, Bill Moss, Joe Adams and fellow VisionTech investors. Please register here.
