Deal To Watch: Achieving Better Patient Outcomes Through Telehealth

$16.16M

Key Stats:

Raise to Date

$15,000

Investment Minimum

$5,000

Minimum Raise

N/A

Pre Money Valuation

$16.16M

Raising Platform

Redcrow

Security Type

Common stock

Target Summary

$1M


Summary

BlueJay Mobile Health has been selected as a “Deal To Watch” by KingsCrowd. This distinction is reserved for deals selected into the top 10%-20% of our deal diligence funnel. If you have questions regarding our deal diligence and selection methodology, please reach out to hello@kingscrowd.com.

The Problem

Hospitals and medical staff frequently struggle with finding the right time to discharge a patient. Oftentimes, patients are discharged too soon or abruptly resulting in readmission to the hospital or emergency department. The cost of unplanned readmissions is $15B-$20B annually. 

If avoidable readmission was prevented, it could profoundly improve both the quality of life for patients and the financial wellbeing of health care systems. Early hospital discharge may not lead to overall savings, since it often results in the need for more intense subsequent care. 

In fact, a recent study out of Baylor University Medical Center revealed elderly patients needed less hands-on care after discharge when provided with a personalized care plan that provided the patient with support. 

Collectively, studies stress the need for a personalized patient engagement platform for follow-up care. BlueJay Mobile Health has a solution. 

The Solution

BlueJay Mobile Health has developed and launched an AI (artificial intelligence)-powered patient engagement platform for providers to collaboratively care for patients after discharge. Over 100 rehab clinics are using the platform already after the initial launch. 

Recent data from clinical studies showed 40-50% improvement in outcomes and cost reduction. The mobile platform enables providers to communicate with patients through video, audio, or electronic files in a HIPAA (Health Insurance Portability and Accountability Act) compliant environment. The technology can even quantify patient’s movements through their cell phone cameras during a video visit. 

The platform automatically manages and tracks patient compliance and outcomes, enabling providers across institutions to send personalized treatment plans depending on how the patient is handling their current plan. 

Go-To-Market

The company is currently focused on pursuing its go-to-market strategy. The target customers are rehabilitation companies, accountable care organizations, ambulatory surgical centers, and health systems. 

BlueJay expects to break even within a year and will use the raised funding to develop AI-powered mobile applications for patient self-test, targeting specific diseases such as Parkinson’s. 

BlueJay already has 30,000 registered patients. Over 40% report cost savings for value based practice. 40% of patient outcomes report improvement based on the 1000 patient study done by Colorado Integrated Care Network.

Why We Like it

 

  1. Strong Presence in Current Market: BlueJay has already built a client base of 30,000 users, providing traction and market signals that its application is useful to improving patient care and long term outcomes.
  2. SaaS model with upsells: BlueJay currently employs a subscription plus pay-per-use model where customers pay monthly service fees plus a usage fee per AI-powered video call. This means, in some ways like Zoom (the webinar and online meeting service) can charge based on usage levels of its service further enhancing its monetization strategy.
  3. Large Addressable Market: The global market for telehealth is expected to hit $34B by the end of 2020, with North America accounting for more than 40% of the global market size. More specifically the global patient engagement solutions market was $12.9B in 2018 with a trailing CAGR  of 20.4%. And with the adoption of value-based care (where hospitals get paid for quality of outcomes) in the US expected to account for 60% of healthcare payments by 2020 there is a continuous market driver for more telehealth and patient engagement practice solutions like BlueJay.

The Management

Tony Zhang is the President and CEO with 20 years of industry experience in large corporations and startups. He built Epitomics, which was acquired by Abcam for $170M. He has his Ph.D. and was the VP and Co-founder of Formurex, VP and Co-founder of Epitomics, chairman of CureGen Pharmaceuticals, scientist for Genentech, and a part of the Bayer Corporation. 

Nancy Zhou is the COO and key advisor for BlueJay Mobile Health. Nancy has over 20 years of experience where she was most recently the General manager of Ubisoft China for 8 years. At Ubisoft, she oversaw the launch of ubisoft properties in China. Nancy holds an MBA from the University of Toronto and a M.A. of Electrical Engineering from Beijing University of Aeronautics and Astronautics.

Other notable members of management include Chairman of the Board, Dr. Zishan Haroon who is the Associate Dean of the School of Pharmacy at UNC and Director of PT and Patient Engagement, Chris Feng, who is an orthopedic clinical specialist.

Exit Opportunities

Vree Health, another home-based telehealth company, was created out of a need to follow up with patients to reduce hospital readmission following heart failure, heart attack, or pneumonia.  

The company was acquired by PatientSafe Solutions in 2015. Vree and BlueJay overlap in the postoperative telehealth space, though Vree Health seems to target heart conditions and does not incorporate AI technologies.

In general, acquisition in the space appears promising with significant M&A movement. In 2018 over a 2 month period alone, 3 acquisitions occurred involving Advance Medical, Reach Health and Avizia with Advance Health going for over $300M in total value. 

In fact, there were 56 digital health mergers and acquisitions in 2018 alone, and that number is on an upward trajectory. 

The growing demand for telehealth technologies is spurring significant investment into startups solving various pain points in this new market as well as larger incumbent acquisitions as bigger organizations look to become a comprehensive solution in the telehealth ecosystem.

The Rating: Deal To Watch

BlueJay Mobile Health is a Deal To Watch. BlueJay Mobile Health has developed a new realm of telehealth technology that connects an experienced team of providers from different fields in order to develop the best post-hospital plan. However, telehealth is always risky because of HIPAA rules and patient liability outside of the hospital. 

Additionally, the popularity of telehealth proves the need for a comprehensive solution, though it also introduces significant competition. With so many competitors in the space, it can cause crowding, market confusion and more challenges in going to market. Thus far, however, no single company has overlapped entirely with BlueJay in the use of AI technologies and wide use-case applicability. 

Notably, companies with some overlap with BlueJay have had positive acquisitions, suggesting movement in the space and that a successful exit is not out of the question. 

Despite concerns, BlueJay Mobile Health already has a modest customer base which is only estimated to grow with the projected market expansion. Additionally, the space, though crowded, proves a market pain point and highlights the likelihood of a successful exit.

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About: Sean o'reilly

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