Founder Profile: ARdVRk

ARdVRk’s foundation is based off of the personal and professional experiences of its founders. For many years they tackled some of the more chronic problems in healthcare, particularly inadequate and inefficient engagement between healthcare providers and patients. In their leadership roles, they experienced directly the numerous poor outcomes associated with existing approaches to communicating and understanding complex medical information. They saw that some of the more systemic problems, such as detrimental patient compliance, fear of participating in a clinical trial or even seeking treatment, were associated with a lack of understanding about their medical condition. They also recognized that this fundamental issue of patient literacy makes the underserved the most vulnerable to these problems, as clearly evidenced by the COVID 19 pandemic. With the advent of augmented and virtual reality technology, they immediately realized the power of its simulation and interaction capabilities. For 5 years the ARdVRK team has been driven to provide tools to help providers and patients alike address the core questions at the heart of all this – why am I sick, what can i do about it, and what are the consequences?

The purpose of this capital raise is to develop the hard proof points necessary to demonstrate that our Vital Recall® platform meaningfully improves clinical trial enrollment and protocol adherence rates, reduces medical errors for devices and improves patient compliance for medical therapies. As such, we are planning on using the money raised in this round to continue to build out our platform for new patient and healthcare professional applications as well as hire permanent business development [sales] resources to call on biopharmaceutical, medical device and health insurance clients. 

Our primary clients are biopharmaceutical and medical device manufacturers and health insurers. Our value proposition to these clients is that we can better engage health care providers [doctors, nurses] and patients in a virtual, tele-medicine environment to better educate and train their customers on medical procedures, devices and therapies. We are focused on addressing serious business issues with measurable outcomes.

Let me talk about one specific use case that we are currently deploying in the field. This is an Informed Consent app for patient recruitment of a stem cell clinical trial. This trial is extremely complex and requires significant patient education. Traditionally, the patient sits with a healthcare professional (HCP) who walks the patient through a roughly 60 page written Informed Consent document that explains the trial. Needless to say, this is a very time consuming process and many times the patient does not fully understand the steps of the trial. Consequently, the patient does not enroll. This explains why 70% of cancer patients, for example, say they are willing to participate in a trial while less than 5% actually participate. With our Vital Recall® app, the patient, using a tablet or smartphone (android or IOS), has an avatar explain the key steps of the trial with full visuals. Based on focus group feedback, patients talked about how they “now really understood what the Doctor was trying to tell them, and how they were getting more from this app than talking to their Doctor.”

We have a number of competitors around the edges of our business but are not aware of any direct competitors. There are several medical education players as well as agencies that develop custom content for specific use cases, e.g. conventions, continuing medical education. AR/VR is a relatively new technology that is much more easily applied to gaming than industry. That said, there are increasing use cases where AR is being applied successfully in assisting with complex manufacturing processes and training. GE jet engine assembly is an oft cited best practice, AR-assisted manufacturing use case. Healthcare is a very technical industry requiring not only deep medical knowledge but also an understanding of regulatory and privacy issues. As such, it is not the first place one would think to apply AR/VR. Given our background in the industry and our years of experience, we naturally gravitated to this space.

Since moving to a SaaS (software as a service) business model 18 months ago, we have successfully developed and launched our minimal viable product, the Vital Recall® avatar. This has essentially taken the technical risk of our platform off the table. Therefore, at this stage in our development, our primary risk is that using augmented reality to improve patient compliance or reduce medical errors, for example, is not materially better than the current video and print based offerings. That said, based on significant anecdotal data, we are confident that with the quality of our medical artwork and functionality of our avatar, our augmented reality platform will prove to be significantly superior to current alternatives.

We believe we have three competitive advantages. First, we address some of the most pressing business issues our clients are facing. We are not looking to apply AR/VR technology for a wow factor at a convention. Second, we have been fortunate to attract one of the best technologists in the business, Chris McClellan, as our CTO. With his leadership and experience in serious interactive training and simulations he has assembled a team of artists and programmers that create what we believe to be the most realistic medical materials in the marketplace. Lastly, with over 50 years of cumulative healthcare experience, our senior team has been able to develop a network of senior executives contacts across the industry that allow us to engage with clients at a senior level as opposed to the more traditional bottom up selling approach.

As I mentioned, we moved from a custom model to a SaaS-based business model about 18 months ago. That means that once our platform is fully built out in terms of body systems (e.g., cardiovascular, digestive, endocrine) and avatars (age, gender, ethnicity), we will have the ability to configure any client content onto our platform in a matter of weeks. Under the old custom model, our development timelines were measured in months. As with all SaaS models, ARdVRk is paid an up-front configuration fee plus a licensing fee for each unique download of our app. As you can imagine, it is this licensing fee that is the economic driver of the business model.

We see three potential exit opportunities, and they are not mutually exclusive. The first of these is that a strategic buys the company or one of our offerings. For example, a CRO (clinical research organization) could buy our clinical (Informed Consent, protocol adherence) services. The second of these could be a player in an adjacent space buying the company or one of our offerings. For example, an agency or medical education player could buy our commercial (patient at home, therapy adherence) services. The third exit opportunity would be to sell to private equity or IPO the company. 

We initially set out to raise $5M – $10M of capital. In talking with institutional VCs we quickly realized that given our stage of development and current valuation, that size capital raise was not in the best interest of our shareholders due to the dilution and loss of control that would entail. Instead we opted for a smaller, up to $2.5M, raise. This size raise seemed ideal for Reg CF. It provides us with sufficient capital to build out our platform and a long enough runway to generate the necessary proof points. This then positions us for a future capital raise at a hopefully significantly higher valuation, which will benefit all of our shareholders.