InTouch Health, a developer of technologies that enable physicians to remotely perform real-time consults and diagnosis with hospital patients, recently raised $10 million in a private placement. $6 million of the funding came through Beringea, Michigan’s largest venture capital firm, through its InvestMichigan! Growth Capitol Fund, and will be used to open an R&D center in Michigan, as well as further fuel the company’s product development, sales, and marketing efforts. The remainder of the round was led by Galen Partners, and included returning investors InvestCare Partners, Twenty One East Victoria Investments, and others.
According to the funding announcement, the investment will also be used for “infrastructure investment in preparation for a public offering.” But even without this notice, it was clear that InTouch was positioned for going public. Since InTouch was founded in 2002, the company has raised more than $33 million and attracted over 250 customers for its healthcare telepresence systems. Over the last two years, the company has worked to “set the table” for a public offering, including expanding its product line, securing patents, and building its board and management team.
At this time, many companies are seeking to monetize mobile telepresence. I have my doubts about systems, particularly home-based systems. Technology issues are not my biggest concern; it’s the business model. For example, who pays for the systems and what does a mobile telepresence system have over webcam equipped netbooks, particularly as new technologies provide for high-quality HD video conferencing over general-purpose IP or 3G networks? How long before cell phones offer two-way video? Already, providers of mobile telepresence systems for healthcare offer low-cost models that are wheeled into the patient’s room instead of driving in itself. Telepresence? “Yes!” Mobile telepresence? “I’m not so sure.”
For InTouch Health the business model is clear. Physicians anywhere in the world can consult in real-time with hospital-based patients. Cost savings, improved physician effectiveness, and enhanced quality of care are the result. The payees are the hospitals themselves or insurance providers. For those companies looking to monetize mobile telepresence, and there are many, InTouch Health provides an example of a mobile telepresence business model done right.