Pulse is raising funds through sale of common equity at a pre-money valuation of $6.2 million. For a marketplace startup in the medical field, this valuation is fairly reasonable, even at its early stage. However, Pulse’s revenue has been relatively limited so far, resulting in a high revenue multiple. While this valuation isn’t excessive, it is high enough to give Pulse a moderate rating for this metric.

The global medical tourism industry is expected to reach a value of $78.2 billion by 2026, growing at a compound annual growth rate of 18.8% from a 2021 value of $33 billion. While medical tourism wasn’t as severely impacted by the COVID-19 pandemic as traditional tourism, there was some reduction in services — a phenomenon that could account for Pulse’s year-over-year loss of revenue. It should be noted that because the company is not a full provider, Pulse can capture only a limited fraction of the total medical tourism market. Nevertheless, its market rating is above average.

Pulse is headed by a trio of medical tourism experts. CEO Robert Page holds a bachelor of science in developmental economics from Georgetown University and spent a decade and a half in this space before founding Pulse. He first ventured into medical tourism as co-founder and vice president of operations for MedToGo Publishing, which thoroughly researched Mexico’s healthcare system and released a trio of guidebooks on the country’s healthcare system. From there, he helped expand the company into MedToGo International, facilitating patient treatment through a global medical concierge service. After starting and working at Pulse for several years, he led it to a level of success before bringing on his partnering co-founders, both of whom now split their time between Pulse and other engagements.

Co-founder Jonathan Edelheit is a juris doctor from the Villanova University School of Law. After a six-year stint as the vice president of sales and marketing for OptiMed Health Plans, he spent 12 years in editor roles at various healthcare and benefits magazines, work he continues today as editor-in-chief of Corporate Wellness Magazine. He is a founder and chairman of the Medical Tourism Association and Global Healthcare Resources. He and organizations under his leadership have worked to integrate medical tourism into insurance companies’ coverage. These organizations have also assisted South Korea in building up its now highly sought-after medical infrastructure.

Co-founder Renée-Marie Stephano has similarly impressive credentials. Like Edelheit, she holds a JD from Villanova. After several years in private practice, she worked as editor-in-chief for Sustainable Healthcare & Hospital Development Magazine and Medical Tourism Magazine for more than a decade. During that time, she authored several books, co-founded the Healthcare Revolution conference for medical professionals, served as president of the Medical Tourism Association and Corporate Health and Wellness Association, and co-founded Global Healthcare Resources with Edelheit in addition to serving as its CEO. She remains in these three latter leadership roles, serving in a part-time role at Pulse.

While CEO Page has assembled an impressive leadership roster to push Pulse to greater heights (albeit on a largely part-time basis), that roster is somewhat lacking in strong marketing and software development expertise. But the deeply relevant expertise of the team is one of Pulse’s biggest strengths. Overall, Pulse Protocol earns a strong team score.

While Pulse Protocol is solving a challenging problem, it’s not the first to do so. Competitors such as Qunomedical in Germany and Medical Departures in Singapore are also providing patients with medical tourism guidance, and some have been doing it for longer. Pulse is a simple marketplace and lacks patent protection. The software is more of an enabler for the supply side, allowing providers to better market their services to patients, and licensing opportunities allow Pulse to act as a white-label software provider. But the service will become more defensible as it builds out its network of providers and patients. Overall, Pulse has an above-average differentiation score.

Pulse Protocol generated revenue of $48,221 in 2020 — nearly half its 2019 revenue of $90,732. But as Pulse does not provide material goods, only services, these limited profits came at reduced expense to the business. The startup has gotten backing from venture capital firms Amplify, Afore Capital, Kima Ventures and more. Pulse has also seen some limited early traction as it has built out its marketplace with 11 clinics, 21 hospitals, 103 individual providers, nine coordinators, and a marketing partnership. Overall, its performance rating is its highest across all metrics.

Potential investors should first note that Pulse’s two-sided marketplace is a risk. Aiming to serve both medical providers and patients requires twice as much buy-in, which makes such marketplaces difficult to build. In addition, while Pulse emphasizes that its services merely connect patients to medical providers, the business could run into regulatory troubles as it grows. Though countries around the world — including the US — have generally been lax with medical tourism regulations, harsher restrictions could become a future threat.

On the differentiation side, Pulse faces some risk as it has limited means to ensure defensibility. Marketplaces are not difficult to imitate. Finally, even as Pulse’s revenue has remained limited, its finances are of significant concern as the business holds more than $3 million in unexplained short-term debt. That’s a steep climb to wipe the red from Pulse’s ledger.

Dual-sided marketplaces like Pulse Protocol’s are difficult to pull off. Investors should consider not just whether providers will continue to engage with the platform but also whether the business can attract enough patient interest to grow. While government oversight of medical tourism is largely limited to warnings to potential patients, governments could very well impose firm regulatory burdens on the market as a whole, hampering Pulse’s growth potential. Limited avenues to build up Pulse’s defensibility mean the company needs to drastically expand its user base. Therefore, the business faces significant obstacles to profitable growth.

Pulse’s strengths come from its unique emphasis on enabling providers, rather than just patients, to seek out potential leads through marketing and coordination. Existing offerings are largely built to enable medical tourists to seek care on their own. Pulse’s approach could help it pull ahead of its competition. In addition, while there are some expertise gaps among leadership, the team members have long and prestigious careers focused on medical networking. The team’s credibility bolsters Pulse’s chances to succeed.

Patients’ medical needs are as varied as patients themselves, and they can’t always find proper care in their local communities. Pulse Protocol is building a marketplace for providers around the globe to connect with patients in need, bringing the power of technology and globalization to medical tourism. Led by a trio of founders with plenty of experience in medical tourism, Pulse has generated some traction by building out its medical provider user base.

Despite taking in some revenue, Pulse saw a dramatic decrease from 2019 to 2020, perhaps due to the COVID-19 pandemic’s impact on all global travel. Additionally, its marketplace is not yet large enough to provide defensibility against possible competitors. It also holds a significant and unexplained amount of short-term debt, presenting a financial risk for investors. However, Pulse seems equipped to tackle the challenges of the medical tourism industry. The company’s focus on giving medical providers the tools they need to better market to patients separates it from its competitors. In addition, its founders’ expertise is likely to further boost Pulse to new heights. All in all, Pulse Protocol is a Neutral Deal.

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Analysis written by Benjamin Potts.