Saebo is raising at a $10.9 million valuation. Although this may seem like a reasonable price for a medtech company, it is not justified by the company’s current revenue figures. Thus, Saebo’s price score is its lowest.

The global stroke management market was valued at more than $22 billion in 2016. It is projected to rise to nearly $37 billion by 2023 as the prevalence of strokes continues to rise, particularly in young adults. The market seems large, but a problem for Saebo is that the majority of the costs associated with strokes is from diagnostics — not therapeutics. Given that Saebo’s products sit on the therapy side of the industry, the company’s actual addressable market is much more niche in nature. Balancing these facts together, the market score for Saebo is below average.

Saebo lists Henry Hoffman as its co-founder and president — though no other co-founder is listed on the raise page. Prior to founding Saebo, Hoffman worked at Burke Rehabilitation Hospital as an occupational therapist and clinical specialist. His specialization was in manual therapy and neurorehabilitation. Hoffman has been working in the field of occupational therapy for stroke victims for the last 22 years. He also holds more than 15 patents for various therapeutic medical splints and devices. 

Hoffman is joined by a finance team with a wealth of experience in their respective areas. Executive Chairman Todd Wiebusch has 30 years’ experience as a healthcare investor at CHMG Capital, LLC, an investment firm that focuses on healthcare companies in the southeastern US. Similarly, Saebo’s VP of Finance, Alan Zdyb, has worked for nearly 20 years at CHMG Capital. It’s worth noting that neither Wiebusch or Zdyb are fully dedicated to Saebo at this time — both still work at CHMG Capital as well.

Christopher Klett acts as Saebo’s Chief Operating Officer. Although his LinkedIn page only lists his position at Saebo, his bio on the company’s raise page states that previously he worked as the Director of Mergers and Acquisitions at CHMG Capital. Lastly, Saebo has also assembled an experienced team of medical specialists who fulfill various roles. 

Co-founder Hoffman has strong medical experience and multiple patents. However, Wiebusch, Zdyb, and Klett all come from a medical investment background, which does not necessarily lend itself to running a medical products company. Taken all together, Saebo’s team score is just below average.

Saebo’s product allows for in-home use, which means that users can continue their physical therapy remedies with top-of-the-line equipment not only at PT appointments, but from their own homes as well. This makes accessibility to quality care much easier, as patients no longer need to worry about putting their recovery on hold when they leave the hospital. It also helps patients cut down the costs of excess appointments (which may or may not be covered by insurance — long term coverage for strokes can be confusing and frustrating). 

Saebo is not alone in offering at-home rehabilitation equipment to stroke survivors. Competitor Neofect offers similar smart glove and hand brace equipment, and mirror boxes can be purchased on Amazon. However, Saebo has built a broader range of therapeutic equipment than many of its competitors, and its pricing looks to be on par or cheaper in many instances. The company has also secured 17 patents, which greatly increases its defensibility. Due to all these factors, the differentiators score for Saebo is its strongest across all five metrics.

Saebo has been around since 2004 and has seen a total of $44 million in revenue over its lifetime. In 2018 and 2019, the revenue stayed steady at $4.7 and $4.4 million, respectively. The company does have sizable debt, with just about $8 million in long term and slightly under $1 million in the short term. Saebo’s net income was -$1.2 million in 2019.

In terms of non-financial performance, there is much to be happy about with Saebo. The company has sold nearly 100,000 at-home products and operates its business around the world. Its products (in this instance, the SaeboFlex) have been proven to have positive effects on patients, including a notable increase in grip strength.

Given Saebo’s strong revenue and fully developed products, its performance score is above average.

Saebo was founded in 2004 and has yet to grow into a profitable business. Its product is solid, but it has been unable to leverage its successes into a net income for the company. Additionally, the Saebo team does not have strong experience with manufacturing or supplying medtech products. Relevant medical experience and expertise in healthcare investing does not necessarily translate into the successful operation of a product-focused business.

The promising nature of Saebo is almost entirely in its product. The SaeboFlex has had studies done on it, proving its efficacy. It’s so noteworthy that it has been put on display in the London Science Museum as a part of its Medicine Galleries exhibit. The product works and is top of the line — which certainly could indicate future success for Saebo. The company has also managed to complete sales around the world, with the SaeboFlex alone being sold in more than 50 countries. This global traction greatly increases the available market for Saebo and could be the key to profitability in the future.

Saebo provides well designed products aimed at allowing stroke victims to regain movement in areas of their body. The products are proven to be effective, and the company has completed sales around the world. Over 17 years of operations, Saebo has earned $44 million in total revenue and gained multiple patents.

However, the company is still running at a net loss. Promising tech and good reviews evidently haven’t been parlayed into a profitable business — and when considering the viability of investment, the profitability of the company is an important metric. It is also unclear if the current team has the proper expertise to move Saebo forward. Balancing the company’s strong product offering against profitability and operational concerns, Saebo is a Neutral Deal at this time.

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

Analysis written by Ethan Thomas.