Did you know that over 2.5M newborns die from preventable causes in developing countries every year? This staggering shortcoming of medical systems in developing countries comes from the immense constraints that these systems face.

When it comes to preventable deaths a lot of the cause can be traced to insufficient monitoring of these newborns due to a lack of staff and monitoring resources. Unfortunately, many of the medical devices designed for tracking vital signs of newborns do not meet the needs of hospitals in these countries. 

This is the problem Sona Shah and Teresa Cauvel are trying to solve for with Neopenda, a new age medical device built to meet the needs of hospitals in developing countries. The solution they have designed is a powerful tech platform that can help to save millions of lives in the years to come.

We think this could become a major medical device business that also has a significant social impact. Learn more below as we sit down with Co-founder and CTO Teresa Cauvel.

Funding Round Details

Neopenda logo
Company: Neopenda
Security Type: SAFE
Valuation: $6,000,000
Min Investment: $100
Platform: Republic
Deadline: Jan 18, 2019
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Teresa, how did you and your co-founder decide to found Neopenda?

Ona and I met at Columbia University, where we were both pursuing our Masters in Biomedical Engineering. Through a shared interest in global health and creating technology solutions with high solution impact, we teamed up in a biodesign course in early 2015.

We had the unique opportunity to travel to Uganda to conduct a needs assessment, and in the nine hospitals we visited we observed a scarcity of functional medical equipment, and that lack of equipment contributes to poor outcomes for patients.

We saw how the commercially available products did not meet the design constraints of low-resource environments, and ended up broken and abandoned. After the trip, we decided to found Neopenda and work full time on engineering medical devices that are designed for the users and constraints in low-resource settings.

For those that don’t know, how do you define Neopenda as a business?

Neopenda is a medical device company creating needs-based technology for high-growth emerging markets. Our first product is a wearable vital signs monitor for newborn patients in resource-constrained hospitals; we aim to help save the nearly 2.5 million newborns dying from preventable causes in developing countries each year.

We’re a social enterprise, and believe that impact and sustainability can and should go hand in hand. We see the massive lack of appropriate, affordable medical equipment in low-resource facilities as an opportunity to create solutions for an untapped market and improve access to high quality care for underserved populations.

Are there currently no devices that provide these types of monitoring services for managing natal care or is it more about price point, etc. that is the need you meet?

In places like Uganda, nurses have to manually count heart beats and breaths—at best every few hours—or share the few available, functioning devices, such as pulse oximeters. This practice fails to meet the WHO’s guidelines for Essential Newborn Care, and is insufficient for providing high quality care to a ward full of at-risk neonates.

In places like the United States, neonatal intensive care units (NICUs) are filled with sophisticated monitoring technology for each patient. This monitoring equipment is prohibitively expensive, and beyond the price, is not translatable to emerging markets due to failure to meet unique sets of environmental constraints such as unstable power supply, durability, and ruggedness.

It also can be near impossible to maintain and repair – getting spare parts supplied to facilities in Sub-Saharan Africa is a major challenge. Neopenda targets this unmet need by creating a 4-in-1 vital signs monitoring system that is optimized for these resource-constrained settings in particular. For example, the system leverages a centralized dashboard to help nurses keep an eye on a whole room of patients at once, and the product is out-of-the-box, not requiring internet access.

Do you have a sense from a metric perspective of how much this product can improve the ability to monitor baby’s when they are in the hospital?

Vital signs monitoring is a long-established standard of quality inpatient care. There is strong clinical evidence behind the practice of continuous vital signs monitoring of critically-ill patients, and it is especially important for the management of at-risk newborns in NICUs or similarly functioning units.

Measurement of vital signs is an important component of many best practice neonatal care procedures, such as those outlined in the WHO Recommendations on Newborn Health, and in the Uganda Ministry of Health National Clinical Guidelines. Vital signs give health care providers an indication of patient’s health status, and significant changes in vital signs tell them that something is wrong.

For example, continuously monitoring the vital signs of a newborn in the hospital benefits them by helping the nurse to know when the baby suffers and apneic attack– stops breathing for over 20 seconds. The nurse needs to be alerted immediately, so that she can go to the baby and provide tactile stimulation to help it resume breathing.

Another example is hypothermia: hypothermia, or reduced body temperature, is very common especially in premature neonates that have little body fat and immature skin and are unable to sufficiently retain body heat. When the baby is getting too cold, the nurse needs to know so that she can add additional blankets, or give it to its mother for skin to skin contact. These types of simple interventions can save lives, but monitoring is needed in order for someone to know they are needed.

How challenging is it to get approval to go-to-market as a medical device in eastern Africa?

There are challenges bringing a new medical device to market in East Africa, as there are everywhere. A major step to commercializing is to get regulatory approval-CE Marking- and then registering in each country. We are preparing for CE Marking now. Meanwhile, we are working on implementing paid pilots with NGO partners in different areas of East Africa, to prove out the efficacy and impact of our solution. These studies will produce the data to demonstrate the comprehensive value of our product to customers and stakeholders- from improved health outcomes to cost savings for hospitals.

Have you experienced any challenges with trying to manage distribution into these countries that are so far from the US and how do you plan to manage going to market?

Over the past three years, we have conducted extensive user and market research in Uganda. We have visited over 45 hospitals across Uganda, and engaged over 150 nurses and doctors in the design of our solution. We are in conversation with the Joint Medical Stores, a wholesale medical equipment distributor that supplies and services over 3000 medical facilities in Uganda.

Neopenda will sell to Ugandan hospitals via the Joint Medical Stores. We will enter additional countries through r our NGO partners, and are pursuing collaboration with international distributors such as Via Global Health.

What is the target type of buyer / hospital that you will work with?

We have two customer segments: private and public hospitals (via in-country wholesale equipment distributors), and international aid agencies/ NGOs.

How will the product be monetized? Is it a product charge, recurring subscription model or both?

The product will be sold in packages of 15 wearable devices, 1 tablet, and all associated software, power supplies, etc, for US$2,250, with a $75 per month recurring fee for data reporting and product support. System installation, training, and support are included. Nuanced frontline health data collected from the system are aggregated and analyzed, and we are pursuing partnerships with Ministries of Health and NGOs to leverage the power of this data.

Being that you are serving underserved populations with this product is it challenging to both charge a high price point / get paid and how are you managing these challenges?

Cost is a key constraint in the markets we work in. We have focused on ensuring that our product is affordable, long-lasting, and has high value for our customers and users. With our package upfront cost of $2250, we are significantly more affordable than a single multiparameter patient monitor that can be purchased from one of the medical device giants at around $5,700.

And remember, that’s a package of 15 devices! So we are able to provide monitoring for a whole NICU for less than half the price of a single traditional monitor. But our value goes beyond even that, because these other types of products don’t meet the needs of our users and tend to break down and fail quickly.

Why do you think other major medical device companies have not gone after this space?

Large medical device companies often overlook emerging markets, keeping to the very high margins and established distribution channels of the U.S. and high-income countries. However, the market for medical devices in Africa is bigger than many people think–$4.9B, and it is expected to grow to around $7.1B by 2023, at a CAGR of 6.3%. There are unique challenge to successfully implementing medical devices in emerging markets though; as we have touched on, we often see donated equipment from the big medical device companies fail within weeks because it does not meet the constraints (e.g. limited power, locally available spare parts, cost-effective maintenance and repair). Their existing products aren’t suited for low-resource settings.

Neopenda is set apart because of our focus on developing products with & for users in low-resource environments, and our commitment to impact and sustainability. We are very responsive to the feedback from our users and stakeholders, and over three years have built trust with our partners and colleagues on the ground, setting our product up for strong adoption in our target market. Furthermore, we have been given support from two large medical device companies, and see these companies as strategic investors in the future.

What types of features outside of just the product can you offer customers?

We’re building a comprehensive solution that encompasses training for healthcare workers to use the product, training for biomedical technicians to maintain and repair the product, and education components to ensure that staff as well as parents have access to the WHO-recommended resources for newborn care. All education and training content will be adapted to the local languages and be culturally appropriate for the geography. Our East Africa-based team will provide on-call product support, in collaboration with distribution partners.

Additionally, the detailed frontline health data our system collects is incredibly valuable. We will provide reporting features to customers, giving insights into the impact of the technology and the efficiency of the hospital wards.

Do you look at the tech you developed as applicable to building other products and if so what types of products?

Absolutely, the newborn monitoring solution is just the first step for Neopenda. Vital signs monitoring is crucial in for many patient populations, and we plan to adapt our first product for pediatric and adult patients, as well as for a tool for midwives and community health workers to reach more rural populations. We are also thinking of a pipeline of health solutions we will build in the future, and already have a provisional patent on one of the pipeline products.

How much more capital are you looking to raise from outside capital and how will you deploy this capital?

With our campaign on Republic, our main objective is to raise awareness of Neopenda’s work and grow our support network. We know that many people are passionate about newborn health like we are, and we see this as a way to bring them into our journey. The campaign will lead into a $1M seed round this fall. The funds will be used for expansion of our clinical trials into new regions, as well as product development, CE Marking, scaling up manufacturing, and growing our team.

The need for Neopenda is immense. We think the team has the technical capabilities and market knowledge to proliferate in its target market with a solution that is truly differentiated from any competitors.

Stay tuned for further coverage and be sure to invest HERE if interested.