Koning is raising a Crowd SAFE at a $200 million valuation with a 10% discount. This is an eye-popping price, justified to some degree by Koning’s significant patent assets and prior funding. Koning is a growth-stage company with years of progress moving through FDA certifications and into commercialization. However, the company’s traction thus far doesn’t quite justify a $200 million valuation. Koning only generated a little over $3 million in 2020 revenue, with roughly $17 million in projected revenue this year. This revenue-to-valuation multiple is too high — even for a certified medical device company — so Koning’s price rating is its lowest across all five metrics. 

Cancer screening guidelines recommend that women receive a mammogram at least every two years from age 40 and up, with annual screening recommended from ages 45 to 54. Millions of mammograms are conducted in the US alone each year — 17.3 million in 2016 to be exact. 

As a result, the market for breast cancer diagnostics is decently sized. The global market was valued at $22 billion in 2020 and is expected to grow by 7% annually over the next seven years. Given that Koning is already commercializing its devices globally, it is reasonably addressing this entire worldwide market. However, it would likely take decades for Koning to completely overtake traditional mammogram methods like full-field digital mammography. Koning will likely only capture 2% or less of this market in the near future for an obtainable market size of roughly $440 million. As a result, Koning’s market size rating is strong but not as large as that of companies addressing a larger market.

Koning was founded by Dr. Ruola Ning in 2002. A tenured professor of imaging sciences at the University of Rochester, Ning seems to have founded Koning within the University but later spun it out into an independent company. Ning received his PhD in electrical and computer engineering from the University of Utah in 1989, which translates to more than 30 years of research experience.

Beyond Dr. Ning, the Koning management team includes Lutao Ning, David Georges, and Matt Stack. Lutao Ning graduated with a bachelor’s in biomedical engineering from Duke University and spent 11 years as a consultant at Boston Consulting Group. He now serves as Koning’s US CEO. Koning President David Georges has 20 years of expertise in the medical device industry. He has a strong sales background with years of experience serving in sales management roles for imaging companies, including breast imaging specifically. Lastly, Matt Stack is Koning’s CFO. He can’t be found on LinkedIn, but Koning’s raise page lists him as an experienced technology investor who spent six years at Boston Consulting Group. 

Koning was founded by an experienced imaging researcher who has spent almost 20 years shepherding the Koning imaging device through various trials and FDA certifications all the way to commercialization. However, the company’s team doesn’t seem well suited to the future needs of the business, namely bringing the product to market and running a multinational, growth-stage medical device company. Lutao Ning — apparently Koning’s most senior executive — doesn’t have significant entrepreneurial or management experience. As a result, Koning’s team score is relatively low. 

Koning’s breast imaging product is clearly differentiated from standard methods of cancer screening, even to the eye of someone without medical training. Typical mammogram machines require compressing the breast between two flat panels, which is painful and uncomfortable for many women. That fear undoubtedly prevents some women from receiving proper screenings each year. It also seems evident that Koning’s screening technique can much better detect early-stage cancer signals in a larger number of patients than traditional screening techniques, which is a huge benefit for doctors, insurance companies, and of course, patients. 

Koning does face strong competition in this industry. Countless companies are focused on reducing cancer diagnoses and developing more high-tech imaging systems. Koning’s advantage, though, is its significant history of clinical trial success, its FDA certification, and its global patent rights. Each of those forms a deep competitive moat between Koning and newer businesses. Therefore, Koning’s differentiation rating is quite strong. 

Koning was founded in 2002 and benefits from almost 20 years of progress moving its breast imaging device from concept into commercialization. Koning has received $20 million in grant funding from the National Institutes of Health, plus $30 million of additional funding from venture capitalists and angel investors. That capital has powered Koning through clinical trials and published studies to FDA certification, regulatory approval in Canada, Singapore, Australia, Thailand, and Qatar. The company has also received a medical billing code to begin collecting revenue in the form of insurance reimbursements. 

Koning only received that medical billing code in 2020, so the company hasn’t yet been able to generate significant reimbursement revenue. However, the company is still demonstrating strong year-over-year revenue growth. In 2019, Koning generated roughly $2.16 million in revenue with a $1.75 million net loss. In 2020, the company expanded revenue by 43% to $3,088,634. Koning’s 2020 net loss was also a bit more favorable at $1.14 million. 

All in all, Koning is a growth-stage company with significant proof of concept. It also has the potential to greatly expand revenue, now that its imaging technology can be fully commercialized worldwide. With government approval, a great deal of prior funding, and positive year-over-year growth trends, Koning’s performance rating is very strong. 

Despite Koning’s strong performance history to date, the company is still a relatively high-risk investment. Any high-tech medical device company poses some inherent risks in terms of regulatory approval and the time it takes to fully introduce new technology into the medical market. Koning is no different. This company also faces unique risk in terms of team, since its current leaders are not deeply experienced in startup or growth stage management. Koning also has some market risk because the breast cancer imaging market is a relatively thin slice of the broader imaging landscape and medical devices as a whole. 

Koning is a well-established medical technology company with a differentiated product that seems poised to generate increasing revenue in coming years. Of course, there’s a chance that Koning does not succeed. The company’s team doesn’t seem to be well built out. Koning’s founder is a university professor who lacks business experience, and the company seems to be run day-to-day by a former Boston Consulting Group consultant. Scaling Koning internationally while navigating immensely complex medical regulations and billing procedures is a huge task, and the Koning team might not be up to it. With limited commercial history, it’s hard to say at this stage whether Koning will be a success in real-life medical practice. That risk is particularly concerning given the company’s exceedingly high valuation, which could limit upside for investors. 

The most exciting thing about Koning is the potential it has to significantly improve breast cancer detection. For one, the patient experience with a Koning scanner seems to be a dramatic improvement over traditional mammogram technology. Simply laying down for a 10-second breast scan is vastly preferable to uncomfortable breast compression. Improving the patient experience for mammograms could cause many more women to keep up with their yearly screenings. In addition, Koning’s imaging technology is much more sensitive and capable of detecting early-stage signs of breast cancer in a wider variety of patients (with any breast size or density), which could dramatically improve early cancer detection and ultimately save lives. 

Koning’s core product is compelling, and the company’s traction over the last 20 years is no less so. While progress has taken two decades — not unusual for medical device companies — Koning has marched steadily through clinical trials, domestic regulatory approval, international regulatory approval, and ultimately approval to begin seeking insurance reimbursement (revenue) for patient scans. The company has already been generating millions in revenue before even achieving full commercialization. This traction is a strong signal of future success now that a billing code has been issued. While it will undoubtedly take decades for the standards of mammography to shift toward Koning’s method, it seems entirely plausible for Koning to eventually reinvent how breast cancer screening is done. 

Koning is a breast cancer imaging company that holds a number of patents for breast imaging scanners that provide high-contrast 3D breast scans through a much more comfortable patient experience than typical mammograms. Koning’s technology has the potential to increase yearly screening compliance and detect early-stage cancer, which would save lives. 

It’s worth noting that Koning is raising at a $200 million valuation, which seems high based on the company’s current revenue traction. In addition, Koning’s team doesn’t have meaningful entrepreneurial experience. However, the company has been steadily marching toward commercialization for the last 20 years. It has attracted significant funding over the years and has demonstrated strong year-over-year revenue growth. Koning has a decent market opportunity, and its product is a clear improvement over current methods of breast cancer screening. The company now possesses all of the intellectual property, regulatory approvals, and billing codes needed to supercharge revenue. Therefore, Koning has been rated a Deal to Watch. 

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