After seeing significant growth in Canada during the pandemic, Toronto-based PocketHealth is ready to ramp up its presence in the United States (US).
Since closing its first round of venture financing in early 2020, PocketHealth has grown the user base of its medical imaging storage and sharing solution from 150,000 to over 600,000 patients—the majority of which are based in Canada—and increased its revenue run rate sevenfold.
“We started off with a pretty simple idea, which is that medical imaging is the spark to every healthcare journey in North America.”
Now, armed with $20 million CAD ($16 million USD) in Series A financing led by healthcare-focused, US-based investor Questa Capital and supported by existing Toronto investor Radical Ventures, PocketHealth plans to scale up its US expansion efforts. The startup also sees an opportunity to move beyond just facilitating access to medical imaging and into helping its users understand them.
In an interview with BetaKit, PocketHealth co-founder and CEO Rishi Nayyar described COVID-19 as an “accelerant” for the startup’s business, given that the pandemic exacerbated the problem PocketHealth aims to address: facilitating easy and secure digital access to medical images for patients and their health providers.
“Our product was the right product for the time,” said Nayyar. “We worked extremely hard in the years prior to the pandemic to get to that scale, and then it put us in a position where [the] pandemic hit, we had just raised a large round of funding, and we were able to hit the gas pedal.”
PocketHealth’s all-equity Series A round closed in February, and was financed entirely by Questa and Radical. The raise brings the startup’s total funding to $29 million CAD.
PocketHealth’s app allows patients to access, share, and store their own medical image records like X-rays, ultrasounds, CT scans, and MRIs securely using “bank-level encryption technology.” The company, which describes itself as “the world’s first patient-centric image sharing platform,” was founded in 2016 by Citigroup alum Rishi Nayyar and his brother, former Google software engineer Harsh Nayyar.
“We started off with a pretty simple idea, which is that medical imaging is the spark to every healthcare journey in North America,” said Rishi Nayyar. “It’s what diagnoses you, and what’s so unsettling and what stuck out to us so much was that getting access to that critical information was just so difficult.”
PocketHealth has a flexible model, offering its service for an annual subscription of $50, or a pay-as-you-go basis for $5 to access all imaging from a single medical site, storing any records accessed through its platform permanently for free. “If any patient can’t afford it, they can call in, and no questions asked, the fee is waived for them,” said Nayyar, adding that the startup has done this “thousands and thousands” of times over the years.
The Nayyar brothers bootstrapped PocketHealth until April 2020, when the company secured $9.1 million in seed capital led by Radical.
“We doubled down because PocketHealth helps unlock the future of personalized healthcare by giving patients control of their health data,” Radical co-founder and Managing Partner Jordan Jacobs told BetaKit. “The amazing organic growth across Canada and the US since we first invested exactly two years ago shows patients and healthcare providers love and trust PocketHealth.”
As part of the round, Questa founder and Managing Partner Ryan Drant has joined PocketHealth’s board, which already includes Jacobs. Nayyar said Questa brings “key” healthtech expertise and experience to the startup’s table.
“The biggest thing is just deep, deep expertise in scaling growth-stage digital health businesses, especially in radiology,” said Nayyar, citing Drant’s network and past experience serving on the board of Radiology Partners. “He really comes with a lot of knowledge that we can benefit from as we hit this inflection point through COVID.”
According to Drant, PocketHealth’s “technical elegance and simplicity” makes the startup’s app “an appealing choice for any forward-looking health system invested in improving care experiences for their patients and their families.”
In Canada, Nayyar claims that PocketHealth is the only provider of its kind. “We walk in, and we are always, in every scenario, competing against CD-ROMs.” South of the border, however, Nayyar acknowledged that the startup faces some competition.
“There are competitors in the US, but they’ve historically always focused on just provider-to-provider sharing, so, connecting hospital systems together,” said Nayyar. “They’ve traditionally excluded the patient, or they do have a patient access experience, [but] it’s definitely an afterthought.”
With most of its customers currently based in Canada, PocketHealth began expanding into the US last year. Going forward, Nayyar described US expansion as a “key” focus for the startup. Although the startup also serves smaller clinics and community hospitals, PocketHealth’s American growth strategy involves targeting larger hospitals and health systems—which offer a faster path towards scaling. “[It’s] where we’ve seen that we can make the biggest impact the fastest,” said the CEO.
To support its expansion, PocketHealth plans to double its 60-person team over the next year.
PocketHealth’s plans also involve moving beyond just facilitating access to medical records—the startup also wants to help patients understand them. Earlier this month, the company launched Report Reader, a new tool that enables its users to easily surface “patient-friendly terminology” inside of their radiology reports.
Nayyar described Report Reader as “the first step of many steps towards helping patients become more in control and actually understand what’s happening.”