Top Deal: A Standardized Medical Information System to Improve Patient Care

Key Stats:

Summary

The Elemeno Health team has been selected as a “Top Deal” by KingsCrowd. This distinction is reserved for deals selected into the top 10% of our due diligence funnel. If you have questions regarding our deal diligence and selection methodology please reach out to hello@kingscrowd.com.

Problem

Healthcare is a profession fraught with challenging, urgent decision making, particularly in this moment of global medical crisis. Critical care nurses make decisions every 30 seconds, and these decisions are impactful. Up to 98,000 patients die each year due to poor decisions made by their healthcare providers. 

One of the issues hampering correct decision making is the “knowledge-practice gap” or “theory-practice gap,” wherein doctors and nurses struggle to keep up with the latest in ever-changing medical care standards. The theory-practice gap decreases quality of care as patients are treated according to outdated guidance. It also contributes to disillusionment, stress, and burnout among healthcare professionals. Over 50% of doctors and one-third of nurses experience burnout, which only further decreases the quality of patient care. 

One potential solution to the knowledge-practice gap is the implementation of more rigorous guidelines and standards of patient care, similar to the philosophy outlined by Dr. Atul Gawande in his bestselling book The Checklist Manifesto. If medical professionals had access to continually-updated standards of care that decreased the burden of individual decision making in favor of routine and consistency, both patients and healthcare providers would stand to benefit. 

Solution

Elemeno Health is a team-based medical information web application providing up-to-date checklists, how-to videos, and more lifesaving information to doctors and nurses in real time. Elemeno users, who are healthcare providers at hospitals and clinics, access the Elemeno interface on their mobile devices to check the latest guidance from their team on a variety of patient care issues. The Elemeno solution improves medical care consistency and reduces life-threatening errors, ultimately saving costs and saving lives. 

Elemeno’s product is intended to close the “knowledge-practice gap,” transmitting important, practical information to healthcare providers with real-time updates. Elemeno also incorporates social recognition and gamification to further motivate users to leverage Elemeno information. Medical care teams are knit together with a common set of instructions that reduce provider stress and improve patient outcomes. 

Elemeno Health is a B2B SaaS company closing recurring-revenue contracts with client hospitals. Elemeno’s department-based pricing allows hospitals to launch Elemeno in one or two departments as a pilot, later expanding contracts to encompass entire hospitals or clinics. Impressively, Elemeno reports that 100% of clients have renewed their contracts since 2017. 

Elemeno generated roughly $231,000 in revenue in 2018 and grew to almost $604,000 in revenue in 2019. The COVID-19 pandemic has rapidly expanded the need for Elemeno’s product, and the company projects hitting $1.3 million annual recurring revenue by the end of 2020 as a result of this boom.

The Elemeno team participated in YCombinator’s Spring 2016 cohort. It has raised over $2.9 million from Launchpad Digital Health, Almond Tree Capital, and Global Health Impact Fund. 

The Team

Elemeno has built an accomplished team of medical professionals and developers united in building a user-friendly, lifesaving product. The company was co-founded by Dr. Arup Roy-Burman, also CEO, and Ed Nanale. Roy-Burman is the former Medical Director of the Pediatric Intensive Care Unit at the University of California, San Francisco (UCSF), where he designed the Elemeno prototype. He has 20 years of experience practicing medicine from Stanford to UCSF, and still picks up the occasional shift to stay in touch with the experience of care providers. Nanale is a veteran game developer with experience shipping games at Electronic Arts, Maxis, and LucasArts. He was a key contributor on the SimCity Online team, which managed over 2 million users. 

The Elemeno team also includes Carole Klove, RN/JD. As the company’s Chief Nursing Officer, she leverages 30 years of healthcare experience as a nurse, attorney, consultant, and executive. Klove previously served as the Chief Compliance and Privacy Officer at UCLA and Stanford, and she sits on the Alumni Board of Directors at the Duke School of Nursing. Elemeno’s COO, Scott Cohen, is equally well-credentialed: he most recently served as the VP of Client Development at Athenahealth, helping to scale the company from a team of 200 to 6,000 employees and over $1 billion in revenue.

Growth Plan

Elemeno Health is currently laser-focused on meeting the unprecedented healthcare needs of the COVID-19 pandemic. The company’s product is ideally suited for disseminating rapidly-changing medical guidance to front-line workers. Elemeno is likely to continue signing new COVID-motivated contracts for months to come. 

Beyond 2020, Elemeno is focused on establishing a beachhead among pediatric hospitals. Elemeno’s CEO, Dr. Roy-Burman, was a pediatric care director and piloted Elemeno in a pediatric unit. The company also hopes to diversify its portfolio of clients to include medical device companies, learning management systems, healthcare IT companies, consulting firms, and other healthcare-adjacent verticals that can implement Elemeno’s technology. 

Elemeno plans to invest the capital from this crowdfunding raise into sales and marketing, client success, and product. With these investments, the company projects generating $3.9 million in annual recurring revenue (ARR) from 71 clients in 2021 and up to $8.3 million in ARR from 149 clients in 2022.

Why We Like it

• Exceptionally qualified team: Elemeno is the product of a fortuitous union between an accomplished medical doctor and a seasoned developer. The team is only further bolstered by additional leading healthcare professionals from both clinical practice and administration. Add in Elemeno’s impressive roster of investors, including YCombinator and Launchpad Digital Health, and it’s easy to be convinced that the Elemeno team has the expertise and resources needed to spur the company to success.

• Demonstrated product-market fit: One of the best indicators of product-market fit for a B2B SaaS business is churn rate. Elemeno has a remarkable churn rate of 0% over the last three years. Elemeno’s product is clearly meeting the needs of healthcare providers in every hospital it encounters, and continued investment in product improvements will only increase the stickiness of contracts. With this product-market fit and a rapid increase in clients due to COVID-19 (see below), Elemeno is well-positioned to generate revenue at high margins for years to come.

• Long tail of COVID-19: The COVID-19 pandemic is a global medical crisis of unprecedented scale. Elemeno’s product is tailor-made for chaotic medical care scenarios in which guidance changes rapidly and staff members are under immense pressure to make rapid decisions and administer care correctly. Elemeno reports that it has closed many new contracts thanks to needs driven by the pandemic, and those needs are unlikely to wane anytime soon. Moreover, this boom in contracts as a result of coronavirus may have long-term positive impact on Elemeno’s business: if clients continue to churn at an extremely low rate, hospitals are likely to maintain or even expand their Elemeno contracts post-pandemic.

Rating

Healthcare is a crowded space for tech innovation, and many companies have failed to achieve product-market fit. However, Elemeno Health stands out from the pack. Founded by well-qualified medical professionals and seasoned developers skilled in incorporating social recognition and gamification alongside a lifesaving medical care interface, Elemeno has already demonstrated product-market fit with extremely low contract churn. Moreover, Elemeno is benefiting from the coronavirus pandemic, sobering as it may be: new contracts signed due to heightened need for clear and accessible care instructions are likely to continue generating revenue when the pandemic passes. 

Elemeno Health is also thoughtfully aiming toward eventual acquisition by a strategic partner in the broad healthcare space. The company lists a set of “strategic market channels” that they will pursue for additional revenue growth in the short-term and may become acquisition partners in the long-term. These include medical device companies, learning management systems, healthcare IT companies, medical publishing firms, and healthcare consulting firms. These types of acquisitions are not unknown to the healthcare industry. Huron Consulting, which encompasses a large healthcare consulting practice, has acquired several healthcare technology partners, including Healthcare Services Management in 2016 and TRILANTIC in 2010. Absorb Software, a learning management system developer, acquired ePath Learning last year in part to extend its capabilities in medicine and healthcare. 

Founded by an all-star team, enjoying a positive response from the market, and poised for eventual acquisition, Elemeno Health is a Top Deal.