US-Israeli company TytoCare, which develops and markets remote diagnostic devices for telehealth, has announced completion of a $49 million financing round. . The round, which brought total funding raised to date to $205 million, was led by Insight Partners, with participation from new investors MemorialCare health system, Healthcare of Ontario Pension Plan (HOOPP) and Clal pension fund. Tytocare was founded in 2012 by CEO Dedi Gilad and COO Ofer Tzadik.. Tytocare has developed diagnostic devices like the laryngoscopy, otoscopy, auscultation and other devices used in primary care clinics. The technological challenge was to help the patient capture the image or sound correctly, and the company achieved this using AI to guide the patient through the procedure and provide them feedback. The first market was primary care, and now the company intends to use the funds raised to branch into the asthma market and enhance its AI capabilities.
TytoCare’s annual revenue is in the tens of millions of dollars, and the company has growing sales, despite the negative trend in the telehealth sector. Telehealth was an attractive sector during Covid, but when the pandemic ended, not all of the companies in the sector managed to cash in on its potential.
“The last 3-4 years have been very interesting”, Gilad told “Globes.”. “Covid seemed to be creating amazing opportunities in the field of telehealth, but when the restrictions were lifted, most patients preferred to go back to in-person consultations. During Covid, our customers, the health systems, suffered financially from declines in the volume of elective surgery. It took them a while to recover and in the meantime, sales cycles got longer for some of the companies working with these health systems. But the good news is that systems know that telehealth is no longer “nice to have”, but an important part of their service”.
Why did customers go back to physical appointments?
“Most telehealth companies that entered the market in the 2020s, offered the “Uber Doctor” model – the patients were connected with the first doctor available. But it turns out to be very important to patients, to meet their own doctor, or at least one that is affiliated with a healthcare brand that they trust. Our devices can accommodate either model, but most of the healthcare systems we work with, employ doctors under a trusted brand.”
If you connect the patients with their own family doctor, you’re saving the patient travel costs and hassle, but are you saving any money for the health system?
“Definitely. If patients can’t meet the primary care doctor easily, they will later cost the system more in urgent care”. A paper published by economists at Stanford and Tel Aviv University showed that use of TytoCare’s products saved 24% of visits to the ER and 24.1% of urgent visits. It lowered the health system’s cost of treating a patient by 7%, although utilization of primary care went up.”
Some telehealth companies we have talked to, said that even without devices like yours, 80%-90% of telehealth visits resolve without need of further follow-up
“That’s true for visits that patients initiate by telehealth in the first place. They don’t turn to telehealth if they know that they will probably need a physical test”/
Gilad says TytoCare’s current financing round was an up-round, giving the company a higher valuation than the previous round.
Was it difficult to raise capital in these market conditions?
“Investors reached out to us due to our good results. We hadn’t previously raised money at extreme valuations, so we didn’t need a correction. We grew responsibly, to 130 employees in Israel and the US, and lately let go of 20 employees, when the market got more unpredictable.”
Published by Globes, Israel business news – en.globes.co.il – on August 7, 2023.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2023.