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Philly Digital Health Notes 2/5: Tiny startups & Giants

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Haystack Informatics, a digital health startup spun off from Children's Hospital of Philadelphia, was acquired last week by Massachusetts-based Iatric Systems, itself recently acquired by Harris Healthcare.

Haystack's behavioral analytics use data taken directly from activity log data from hospitals' electronic health records, to identify activity patterns and areas where EHRs can be improved. These patterns can then be used to improve population health data.

Haystack completed a financing round in 2017 led by Rittenhouse Ventures, with participation from DreamIt Ventures and CHOP.

Productivity within hospitals is often bogged down by an endless routine of waiting for the right people and equipment to be together at the right place at the right time.

The premise of new venture TrekIT is to improve upon that by making internal communications simpler.

Penn Medicine decided to partner with the care coordination technology vendor, which was initially developed in 2016 at Penn as a product called Carelign to reduce clinicians' reliance on paper in clinical workflows and communication. It has been successfully adopted by almost all the inpatient services at Penn Medicine's hospitals.

TrekIT Health's co-founders are CEO Brendan McCorkle (ex-CEO of CloudMine) and CMO Dr. Subha Airan-Javia, who was with Penn Medicine.

HIMSS 2019 , the HealthCare IT industry's major annual conference, will run from February 11th to 15th in Orlando, and there will be a large Philly presence as usual.

A week ago, BioTelemetry (Malvern) announced it was acquiring remote monitoring startup Geneva Healthcare for $45 million upfront with a minimum earnout of $20 million. Geneva brings a cloud-based system for monitoring all telematic devices a patient or group of patients are using.

Of course, many people are watching BioTelemetry (NASDAQ: BEAT) because of its role in Apple's recent Apple Heart Study, which used Apple Watch to monitor wearers for signs of possible cardiac arrhythmias. BEAT provided the remote monitoring technology. Although there's been no indication of what BioTelemetry's long-term role might be if that rolls out, the company is in good shape regardless.

BEAT is currently valued at $2.4 billion, and is considered a takeover possibility.

Analysts have been anticipating Amazon plunging into nationwide online pharmacy services, through its acquisition of Pillpack last year.

Pillpack’s Phoenix, Arizona facility has been granted nine additional state pharmacy licenses in the past two months, allowing that site to sell into other states, according to a research note from financial services firm Jefferies.

It will likely take more scale to serve the entire nation, but this is a significant step in that direction.

The Pillpack acquisition's cost was $753 million, according to SEC filings .

The healthcare venture of Amazon, Berkshire Hathaway, and JP Morgan has hired former Zocdoc CTO Serkan Kutan to head up its technology efforts.

Kutan said, "I am thrilled to now announce that I am serving as CTO of this new venture, which represents, in my opinion, the most promising attempt to improve health care in the U.S."

Google has applied for a patent for a deep learning system that aggregates EHR data into a “timeline” in order to predict potential adverse events.

“The raw health records are patient de-identified and are transmitted over computer networks and stored in a relational database (RDB) and converted by a computer system functioning as a converter into a standardized format [FHIR] and stored in the memory,” the patent states.

Slack, which is preparing for a gigantic public listing, updated its website to show a HIPAA compliance certification that indicates healthcare providers could use Slack’s app to securely share protected health information, according to a CNBC report.

Slack would compete against others like Box, DropBox, and healthcare-oriented service Stitch in healthcare.

Med City News recently interviewed Dr. David Nash , the founding dean of the Jefferson College of Population Health, Jefferson University, on the growth and status of population health. Jefferson was the nation's first school of population health.

JCPH is also serving as the academic partner of the 19th annual Population Health Colloquium, which takes place on March 18-20 in Philadelphia.

Veeva Systems (NYSE: VEEV) continues its push to new levels, with its market cap reaching a new high of $16.8 billion. Its on track in 2019 to become the fifth cloud software company to reach $1 billion in revenue.

The Pleasanton, CA-based Life Sciences Cloud company, which has its east coast hub in Radnor, moved its computer ops to Amazon Web Services beginning in 2017 (though CEO Peter Gsssner is an ex-Oracle guy). It also appears to be developing some AI capabilities .

One thing that amuses me is the robo-analysis sites on the Web that spit out Veeva - to - Cerner comparisons. Except in an abstract financial way, they are in very different businesses and not comparable. The thing that stands out about Veeva at this point is its uniqueness.

An HQ2 hopeful down I-95 hopes

Tom Paine

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Speculation is encircling the DC area, as it has for awhile, building towards a perhaps premature conclusion that the Capitol region - most likely Northern Virginia - will be Amazon's choice for HQ2.

Jeff Bezos and Amazon's entire board is in town today. And the clincher for some - Amazon this week joined the DC Chamber of Commerce.

Northern Virginia has been Amazon's largest computing region since the company's beginnigs. A Maryland-based real estate firm has just purchased a big block of land near the Fairfax County / Loudon County border for Amazon, with the expressed aim of building more Amazon data centers. Amazon was already planning to build a campus-like facility in Northern Virginia in addition to data centers.

But some say Amazon is looking at Arlington's Crystal City, a high rise development that has never really taken off, as the site for HQ2. Crystal City is just a hop and a skip across the Potomac from DC.

The streets of Crystal City

Bezos is speaking at The Economic Club of Washington Thursday evening. Other talks are planned for next week at the Air Force Association conference in National Harbor and during a visit to the Bezos-owned Washington Post.

Amazon said Bezos is not planning to make any HQ2 announcements during this trip.

Jeff and MacKenzie Bezos create $2 billion fund to fight homelessness (CNN)

In his DC speech, he expanded upon the morning's release:

Amazon's Bezos Will Hire a Team to Run Nonprofit Preschools
(Bloomberg)

It has been months. Here's what Jeff Bezos finally had to say about HQ2. . (Washington Business Journal)

Pitchbook: Early investors in Jet.com recieved 10.7x return

Tom Paine

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Marc Lore

Investors in Jet.com certainly did well, including Penn-related MentorTech Ventures.

The website Pitchbook reported that investors in Hoboken-based Jet.com's initial Series A (June 2014) earned a multiple of 10.7x their investment. The largest beneficiary may have been New Enterprise Associates, which led the round. MentorTech Ventures was an investor in the Series A, as it was in a $140 million round in early 2015. Technically Philly had reported that MentorTech had invested $8 million in Jet.çom, forming a special purpose fund to invest beyond its normal limits for one company.

Returns on the February 2015 round slipped to 4.3x, and for the final huge Fidelity-led $350 million round late last year, fell to 2.1x. But if a firm can put its money somewhere for less than a year and get more than twice as much back, its certainly happy.

Walmart agreed to buy e-commerce startup Jet.com in early August for about $3.3 billion. Jet.com raised a total of $565 million in venture capital.

MentorTech had previously invested in Quidsi, Marc Lore's earlier startup, that was sold to Amazon for $545 million in 2010.

MentorTech's total return on Jet.com will depend on how much of the $8 million it invested in the Series A as opposed to the latter round.

Lore, a Bucknell graduate, may be permanently on leave as a student from Wharton. He doesn't need to return.

Links 8/17: Disney, NBC in Battle to Stream Sports (and More); Comcast 'Carefully Evaluating Our Options' for Mobile

New from PTN - Earnings Highlights: Amazon Web Services delivers big again; Qlik down 13% after hours on "revenue slippage"; Updated for Unisys & Quality Systems

Tom Paine

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Amazon Web Services, a part of Amazon (NASDAQ: AMZN) and a big part of its earnings, once again (now that its broken out) produced extraodinary results for the 3rd quarter, as revenue grew 78% year over year and profit margins reached 25%. I've already written about AWS' successes.

The AWS story reminds me, on a larger scale, of First Round Capital's Josh Kopelman's "market shrinkage theory" (nothing to do with Seinfeld). That's when you use disruptive technology (Kopelman uses Microsoft's Encarta on CD-ROM as an example) to metaphorically blow up a market and shrink it through lower pricing, hopefully growing volume through the reduced pricing and coming out as market leader in a smaller market. (Those are my words, not his.)

Whst AWS is doing to the computer industry is remarkable. I assume its momentum will slow somewhat, or else there are going to be many computer sales people out of work.

Locally based QLIK Technologies reported third quarter total revenue of $141.2 million, an increases of 8% year-over-year and 20% in constant currency (still trying to get my head around that.) The Radnor-based BI vendor produced a GAAP net loss of $16.4 million, up slightly from the year before.

For the full year, it expects revenue of between $613 and $618 million, a 10% to 11% increase over last year, and non-GAAP income from operations of $50 to $53 million. Cash and equivalents were $321.2 million at the end of the quarter.

Barron's Tech Trader Daily reported that Qlik fell 13% after hours. CEO Lars Björk said on the earnings call:

"We continue to experience healthy selling trends as strong customer appreciation for our product into September […] We did experience some slippage of larger desktop particularly in Asia-Pacific […] While we are disappointed to finish at the lower-end of our revenue guidance range, our profit performance in the quarter were strong."

QLIK shares fell another 11% on Friday.

Old-line enterprise systems provider Unisys (perhaps the oldest) saw its revenue drop 16% for the quarter, but its stock went up 15% the next day.

"There was nothing radically new," said Wm Smith & Co. analyst Ned Davis, as quoted by the website CRN about a report which preceded a late-afternoon conference call with analysts. "The company seems to be clearly on track, and that is encouraging."

I'm not quite certain where the optimism originated from, but CEO Peter Altabef seemed to convey a better grasp of Unisys' cash flow needs and indicated that the company would stop competing for some very low margin services business it had gone for in the past.

Quality Systems (NASDAQ:QSII), parent of Horsham-based NextGen Healthcare (once a high-growth star), stock was up nearly 8% at midday Friday after reaching a two-month high of 16 earlier in the day.

Quality Systems beat earnings estimates by 50%, though revenue was up only 4%. Quality also announce the borrd's decision to sell NextGen's Hospital Solutions Division. NextGen is big in mostly outpatient ambulatory care, but built
and acquired pieces of a Hospital division that many said it needed to compete for larger contracts. But it didn't take off, and thus the sale to Virginia-based QuadraMed Affinity Corp. The price wasn't disclosed.

Revenues for the fiscal 2016 second quarter reached $125.4 million, and net income was $8.3 million. Most of Quality's revenue comes from NextGen.

Marc Lore's startup Jet offers equity to a few people who bring in the most referrals

Tom Paine

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Jet, the New Jersey ecommerce startup founded by Marc Lore, who sold his previous startup Quidsi (Diapers.com, etc.) to Amazon, offers special benefits on its website to early signups to its Jet Insider program: free membership, early access, and maybe even Jet stock.

By signing up for Jet Insider, you get a free six-month membership. Increasing awards come with the number of referrals you bring to Jet, but if I understand correctly you would have to be among the top 10 in referrals to earn 10,000 shares while the number one referrer earns 100,000 shares.

Of course, no one knows what those share may ultimately be worth, though Jet has raised at least $80 million to date. Jet plans to use advanced ecommerce technology to compete on price on selected items with Amazon.

Lore is a Wharton grad and Penn-related MentorTech Ventures is an investor in Jet along with other much larger funds. MentorTech was also an investor in Quidsi. Jet is based in Montclair.

Links 11/21/2014: Fab may be sold off for $!5-25 million; Aereo files for bankruptcy: AirClic acquired

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Former Rising Star Fab May Sell to PCH at a Steep Discount (Wall Street Journal: Digits)
Fab was valued at about $1 billion after one of its financing rounds, but now may sell for as little as $15 to $25 million, according to reports. First Round Capital was an early investor, though I doubt its exposure is significant. (I mean cash exposure; I don't know when they recognize book gains.)

Aereo, a live-stream TV startup, files for bankruptcy (Fortune)
Another startup that FRC invested in, though again probably with limited exposure. Barry Diller's IAC Corp made the biggest bet. I still would imagine that the technology is going to be worth something to somebody.

The Next Chapter (Aereo Blog)

Aereo CEO: Court Made Incredibly Wrong Decision, Cord-Cutting Is Inevitable (TechCrunch)

Amazon reportedly launching free, ad-supported video streaming service (Engadget)

Comcast SportsNet launches marketing campaign over possible Dish Network blackout (Washington Post)

Descartes Buys Transportation Tech Provider Airclic (Trevose) for $29.7 Million (Transport Topics)
AirClic reportedly recieved investments of $300 million or more going back to 2000.
This is the original press release from 2000 announcing the joint venture investment plans for AirClic. Its not known how much was eventually invested.

CMU to split $750K with two partners (including Drexel) to form PA Interactive Media Consortium (Pittsburgh Business Times)

Is SAP any clearer on its SME strategy?
(Diginomica)

Salesforce brings Social Studio deeper into its Cloud family (VentureBeat)

AWS is playing chicken with pricing, and enterprise incumbents will lose (Tech Republic)

HP boss Meg Whitman shuffles exec pawns just before biz splits (The Register)

NJ Serial Entrepreneur, Wharton Grad Marc Lore Snags $55 Million to Build E-Commerce Platform Jet

Esther Surden
Publisher & Editor, NJTechWeekly.com

Marc Lore has raised $55 million for a new e-commerce platform called Jet. |Source: Quidsi website

Whenever New Jersey entrepreneurs want to point to a local success story, they mention Quidsi — the parent company of Diapers.com and several other e-commerce sites — founded in Montclair and sold to Amazon.com in 2010 for $550 million.

Now one of Quidsi’s founders, Marc Lore, has raised money for a new e-commerce startup, Jet. And the amount of money he has raised is not small.

“I’m happy to confirm,” Lore wrote on his blog “that we’ve raised a $55M Series A round of funding led by NEA [Menlo Park] with participation from Accel Partners [Silicon Valley], Bain Capital Ventures [Boston, New York and Palo Alto] and MentorTech Ventures [Philadelphia] . Lore is a Wharton graduate and MentorTech invests only in ventures having a Penn connection. It had also invested early in Quidsi.

The raise took place as soon as Lore was out from under a noncompete agreement with Amazon, sources say.

Lore said in the blog that it’s too early to discuss the details of the business he is building. He did say, however, “e-commerce has come a long way in just two decades, altering our expectations around price, selection and service."

"We now expect the lowest prices, infinite selection and overnight delivery right to our doorstep. This transformation in customer experience is undeniable and, at the same time, I believe there is still a massive opportunity for innovation.”

Lore added that Jet will “make use of the latest advancements in technology to create a new shopping experience that will empower customers like never before. Jet will bring unprecedented transparency and efficiencies to the overall e-commerce market, and as a result, will transform the customer experience in a way that, until now, has not been possible.”

An article in Fortune says Lore is building the company alongside two Quidsi cofounders, former VP of special operations Nathan Faust and former project director Mike Hanrahan. Lore’s former cofounder Vinit Bharara, whose January 2014 talk NJTechWeekly.com covered here, is not involved in this project, sources say.

Business Insider says Jet will operate out of Hoboken and already employs 30 people.

Recode.net’s Jason Del Rey, who broke the news July 29, 2014, says the deal values Jet at more than $100 million. The startup had been self-funded until this point and is expected to officially launch in 2015.

Esther Surden is Publisher and Editor of NJTechWeekly, and a contributor to Philly Tech News. This article (with some small additions) originally appeared in NJTechWeekly, and is republished here with her permission.