NanoMed Tracking is raising at a pre-money valuation of $3.9 million. This valuation is quite low in comparison to other early stage startups currently raising capital online. It is also appropriate for a company that is still pre-revenue. As a result, the price score for NanoMed Tracking is high. 

According to one source, there are 6,090 hospitals in the US. Based on NanoMed Tracking’s subscription fees, the annual revenue it could achieve with complete market capture would be around $602.91 million. In addition to this, the company would earn $852.60 million from one-time setup fees. The global estimate for hospitals is less certain. However, one source from 2015 estimated 164,500 hospitals existed around the world. This figure would imply annual revenue for NanoMed of $16.29 billion, with setup fees of $23.03 billion, assuming complete market capture. However, it is important to note that achieving complete market capture is very unlikely for NanoMed Tracking.

Though it is not an exact comparison, the US hospital facilities market is growing at a rate of 8.6% annually. While NanoMed is targeting a very small portion of that market, seeing the growth rate provides some context to how much room the company will have as it scales and expands. An 8.6% growth rate is encouraging, but the overall market for NanoMed is quite limited. Thus, the company’s market score is below average.

John Clark is NanoMed Tracking’s founder and CEO. He is currently also the CEO and founder of Global Cancer Technology, a biotech firm with three patented technologies involving cancer treatment. NanoMed Tracking is a subsidiary of Global Cancer Technology. Clark is also on the board of directors and serves as the treasurer at Palomar Health. He has years of experience with various medical technology companies, making him an excellent leader for NanoMed.

Marc Potvin is the president and chief operating officer at NanoMed Tracking. He served as a managing partner of Agility Management Group — a human resource outsourcing firm — for eight years before pivoting to Global Cancer Technology. He also works as the vice president of acquisition at Lotus Equity Partners, the President of CallCancerMD, and the founder of Virtus Excellence. While Potvin provides a wide range of management experience, his split focus is not ideal for NanoMed Tracking.

Dr. Milan Mikale is NanoMed Tracking’s CTO. He has worked for 20 years as a research scientist and bioengineer in the neuro-oncology field at the Moores Cancer Center of UCSD. His PhD is in radiation biology, and he has a master’s degree in electrical engineering and computer science. 

Founder Clark brings strong experience with multiple medical technology companies. COO Potvin and CTO Mikale provide needed managerial and medical expertise to the NanoMed team. Given the vast industry experience of these members, the company scores strongly in the team metric.

NanoMed Tracking appears to be in a league of its own. The closest competition uses barcodes and radio frequency identification (RFID) technology to identify objects. These solutions have the downside of being visible to the naked eye (making them distracting for the surgeons and other medical professionals) or costly and inefficient in the case of RFID technology. It was difficult to identify any other business that utilizes a polymer marker and an optical reader to maintain surgical tool inventory and tracking. Due to the fact that virtually no direct competition exists, NanoMed Tracking receives a very high differentiators score.

NanoMed Tracking has a creative concept, but its traction is severely limited so far. It has no patent on its technology. Furthermore, the business has not yet generated any revenue. It has no expenses, and its balance sheet is almost empty. The company is technically still in the product development phase and has not raised any prior rounds. There is little to evaluate when it comes to performance metrics, thus its performance score is very low.

The overall risk profile of NanoMed Tracking is quite high. The first area of concern is product risk. The company is still so early in development that it is unclear just how well the product will perform in the market. Another elevated risk category is funding. NanoMed Tracking is only raising a small amount of capital at this time. Anybody who has experience in the medical device space can attest to the fact that significant capital is often required to launch a new product. NanoMed will likely require additional rounds of funding at some point, and that could result in shareholder dilution. 

NanoMed Tracking also faces a timing risk. Even if the company is able to successfully develop its technology, it will face a long sales cycle as it works to convince hospitals to buy its solution. The medical field is not known for quick pivots, and it could take years for NanoMed to build a healthy roster of customers. Finally, it appears as though neither the founder nor the other C-Suite executives are fully dedicated. This lack of focus could further contribute to an already time consuming commercialization process.

NanoMed Tracking is still in the development phase for its potentially revolutionary product. However, there’s no proof at this point that it will be able to successfully monetize its solution. In addition, the market is small and likely to grow at a fairly slow pace. If NanoMed does not achieve a high level of market saturation, it could struggle to see strong revenue figures. Finally, the small maximum target for this round of funding likely means NanoMed Tracking will need more substantial rounds of funding in the future. Developing new medical technology is a capital and time intensive process, and investors can’t be certain that NanoMed will be able to fulfill all its promises.

NanoMed Tracking’s valuation is certainly attractive and appropriate given that the team has yet to deliver a product. All three of the company’s central team members seem highly qualified, bringing a strong combination of managerial, medical, and entrepreneurial experience. Finally, NanoMed Tracking’s solution appears to be almost incomparable to other companies, which could definitely be an impressive selling point. Should all go according to plan, this could be an excellent chance to get in very early on a healthtech company solving a serious problem.

NanoMed Tracking has devised a new method of tracking surgical instruments within a hospital. Using invisible quantum dots, the company hopes to save time and money by improving the accuracy of surgical tool inventory. The team plans to sell directly to hospitals via three-to-five year contractual agreements. 

The company is so early in its development that there is little information on its performance, making its future unclear. There is still no viable product, and the company has not raised any rounds prior. The founder and much of the C-suite team is not fully dedicated, casting doubts on the company’s ability to grow and scale. Furthermore, the addressable market is quite small. 

More reassuringly, NanoMed Tracking is being managed by three highly experienced team members with combined decades of experience in healthcare technology.  Additionally, the product seems quite different from its competition. In fact, very little, if any direct competition exists. This is a novel solution for hospital inventory management, and the company is undoubtedly a first mover in the space. Only time will tell if the technology lives up to expectations. Altogether, NanoMed Tracking has been rated a Neutral Deal at this point in time.

For questions regarding the KingsCrowd staff pick or ratings for this company, please reach out to support@kingscrowd.com. 

Analysis written by Daniel Jones.