October 14, 2016

South Florida companies dominate state's venture funding in a weak Q3

Money (1)

By Nancy Dahlberg / ndahlberg@miamiherald.com

Venture capital investments in Florida companies plunged again in the third quarter, compared to a year ago, according to a new report released Friday. Still, South Florida companies led the state, and thanks to Magic Leap’s mega-raise in the first quarter, Florida is still on track for its best year since 2000.

Nearly $92.8 million flowed into Florida companies in 18 venture capital deals in the third quarter, according to the MoneyTree Report from PricewaterhouseCoopers, based on data provided by Thomson Reuters. That’s about half of the take from a year ago, when $182.1 million was invested in 13 deals. The third quarter also trailed the $101.2 million in 22 deals invested during the second quarter, according to MoneyTree.

Florida, despite being the country’s third most populous state, typically takes less than 1 percent of the venture capital pie, and that was again the case in Q3.

South Florida firms dominated the funding in the state, hauling in more than $79.5 million, or 86 percent of the state’s take. The top five deals were all from South Florida, led by a $40 million investment in Woundtech (Podicare) of Hollywood, a later-state wound-care management services company.

Other top deals, according to MoneyTree: Altor Bioscience, a biotech company based in Miramar, $14 million; Nymbus, a financial technology software company in Miami Beach, $12 million; Zenedge, an Aventura cybersecurity company, $6.2 million; and Iatai Enterprises, a Boca Raton fin-tech company, $5 million. Vigilant Biosciences, Carson Life, OrthoSensor and Synkt Games, all of South Florida, were also funded in Q3.

The numbers over time show growth in early stage deals in Florida and that is a good sign for the future, said Darach Chapman, PwC’s leader of its deals practice in Florida.

“The startup base is generating quality ideas and opportunities," said Chapman, who is based in Miami. "It doesn’t surprise me that we see South Florida, in particular, as a breeding ground .. because of the diversity of perspectives that come together here.”

Nationally, venture capitalists invested $10.6 billion in 891 deals in the third quarter of 2016, according to the MoneyTree Report.

Total venture dollars deployed to startup companies for the quarter decreased 32 percent and total deal count was down 11 percent, compared to the second quarter when $15.6 billion was invested in 999 deals. Compared to Q3 2015, dollars and deals are down 36 and 25 percent, respectively. The third quarter also saw fewer mega-deals; Airbnb’s $555 million investment led all the deals.

Whether the VC bubble is bursting is a matter of debate, but it's clear it's in a slowdown.

The headline of the report is that dollar and deal values are down over Q2 and over last year, Chapman said. But Q3s are usually seasonably softer quarters and in presidential election years they are softer still, he cautioned. “From a sector perspective, I think we’re seeing an evolution away from pure software plays. … Looking at Q3's top deals, it’s more diversified, … but we’re still seeing technology companies disrupting traditional sectors.”

As the fourth quarter gets underway, it's clear Florida will have the best year since 2000 when $3 billion in venture was raised. The strong 2016 is thanks to Magic Leap's $793.5 million raise in the first quarter, more than three quarters of the $1.05 billion raised in the state so far.

MoneyTree Report results are available at http://www.pwcmoneytree.com/.


October 12, 2016

Crowdfunding for all: What it means for entrepreneurs and economy


By Nancy Dahlberg / ndahlberg@miamiherald.com

Sherwood Neiss and Jason Best (pictured above), along with a third partner Zak Cassady-Dorion, spearheaded the writing of crowdfund-investing legislation in the 2012 JOBS Act ratified by President Barack Obama. They have also authored “how-to” guides for entrepreneurs and investors looking to raise money from the crowd and invest in crowdfunded opportunities.

Since regulated crowdfunding was legalized in the United States — the third prong of the crowdfunding legislation that allows many more people to invest went into effect in May — the serial entrepreneurs have continued to champion crowdfunding. Working with governments and stakeholders in Mexico, Colombia, Turkey, Canada and the United Arab Emirates, they are helping to educate the world about harnessing the multibillion-dollar crowdfunding movement. Regulation crowdfunding allows any American startup or small business to raise up to $1 million on debt and equity crowdfunding platforms registered with the Securities and Exchange Commission.

Their company, Crowdfund Capital Advisors, is a partner in the U.S. State Department’s Global Entrepreneurship Program. Neiss and Best have testified in front of the U.S. Congress and presented at South by Southwest in Austin, Texas, the World Economic Forum in New York, the Global Entrepreneurship Forum in Istanbul and the Global Entrepreneurship Summit in Dubai.

In September, Neiss and Best conducted a daylong workshop on crowdfunding at Venture Hive, an entrepreneurship education company in downtown Miami. “The two of them saw this incredible need and have been fighting all of our battles to make it happen,” said Susan Amat, founder of Venture Hive. Venture Hive partnered with Neiss and Best on one of the first accelerated education programs for entrepreneurs navigating crowdfunding.

Neiss1Neiss (pictured here) shared his own war stories about raising money the traditional way for one of his former startups, FLAVORx, when he spent months knocking on rich people’s doors and meeting with venture capitalists around the country. “It’s exhausting, and it totally takes your eye off the ball of your company.”

While crowdfunding can be a far more efficient tech-enabled solution to raising investment funds, Neiss is quick to point out that it’s not for everybody.

“Crowdfunding is not a fishing expedition,” Neiss said at the event. Instead, crowdfunding is raising money from friends, family and followers who are already engaged in what the entrepreneur is doing, he said. “You have to know your crowd.”

Best said he was happy to see that the final regulations contained significant measures aimed at lowering risk, such as income and investment caps and a test on risk tolerance. But make no mistake, he said: equity crowdfunding is a risky business for investors. While the rewards could be rich, the reality is that the majority of startup companies fail.

While donation-based crowdfunding has exploded in popularity, critics of regulated crowdfunding warned of a wild wild west of fraud. Yet, since May 16, when Title III (which opens regulated crowdfunding to the masses) was approved, more than $10 million in capital has been committed to campaigns, most of that into California companies, according to a new index that CCA publishes on its website, crowdfundcapitaladvisors.com. About a third of the 120 offerings so far have been funded. So far, the process has been slow and measured, Neiss said.

Here are excerpts of history, best practices and tips for success that Neiss and Best shared with workshop participants and in follow-up questions from the Miami Herald.

When most people think of crowdfunding, they think of Kickstarter, but you saw this as just the beginning. How did you get started?

Kickstarter and Indiegogo (unregulated, donation-based crowdfunding) can be incredibly powerful if you have a prototype. You can test the market and see if there is truly a customer for your product, as well as raise money to produce your product. As the product is up there, people are giving you valuable feedback, and you can use that product validation to go to retailers to sell your product.

The opportunity we saw was to create crowdfund investing not just for consumer products you can pre-sell through Indiegogo, but maybe you have a B2B startup or a traditional business and you need to expand your operations. In August of 2010, we asked ourselves, “If you can give away money on Kickstarter and lend money to entrepreneurs in developing companies via Kiva, why can’t you invest in businesses with products you use everyday?” That was the jumping-off point for us.

But setting out to change securities laws that haven’t changed in 80 years … takes equal parts stupidity and naivete, which we brought loads of to this process to make change. In 2011, we created the Startup Exemption Framework and began walking the halls of Congress and talking to anyone who would listen. … By opening the opportunity for regular Americans to invest in businesses that they know and trust, this could help spark job creation, innovation and American entrepreneurship. … In 2012 we were in the Rose Garden when President Obama signed the JOBS Act into law. It was a surreal moment.

Fast-forward, and in 2014 Title II of the JOBS Act went into effect. In 2015, Title IV, and in May of this year, Title III went into effect. In August, our firm launched an index that tracks crowdfunding on a day-to-day basis. We and Venture Hive are looking at the data results over time to continue to hone and build best practices. Now we are working with 37 countries around the world to change regulation in other countries, we are working with fin-tech companies in the industry, and we are investing in tech companies that are building this infrastructure.

What are the differences between the three crowdfunding JOBS Act titles?

Briefly, Title II provides the ability to raise money from accredited investors or wealthy individuals. Instead of having to know someone to know someone, I can go to one of these platforms. It saves the entrepreneur time, energy and money, cuts down on the funding cycle and brings the process online. … It can be appropriate for tech startups looking for connected investors.

Title IV, also called the Reg A-Plus, offers the ability for companies to raise up to $50 million, from accredited and non-accredited investors, but the documentation costs are substantial. It is more appropriate for large, sophisticated companies, such as a regional brand looking to expand nationally. … It allows for what is essentially a mini-IPO … But the reality is that most companies aren’t ready to do Reg A-Plus offerings, and the majority of them fail.

Title III offers the opportunity for regular investors to invest in companies they use every day or entrepreneurs they believe in. There are limits to how much you can invest, per investment and per year. Those are put into place to help people understand these are high-risk investments … but they also give you the ability to invest in those deals and participate in making the economy grow.

Crowdfunding can make entrepreneurs better entrepreneurs because it trains them early on on what investors need to make an informed decision. If they do it right, they get the capital that they need from the people that they know.

What are some tips for creating a successful campaign, whether it’s donation-based, such as Kickstarter, or a campaign seeking investments in exchange for a stake in the company?

Look for 10 successful campaigns that were similar to yours. What platforms were they using? How did they tell their story successfully? It’s also important to look at a few that failed. Understand where they fell short and what you can do to not repeat their mistakes. Call up the founders; you will be surprised how open they can be.

Your campaign video is incredibly important. "Watch a lot of videos to see what has been successful and what has not.

Your video is your front door to your offering. It doesn’t have to be expensive, but it has to look good. Plan 12 hours for filming that two- to three-minute video. No matter how well you think you know your business or opportunity, write a script. Take your time to get it right.

Before a campaign starts and you are setting up the campaign page, begin establishing media contacts. You want to have a big first couple of days. Share your campaign before it is live; that is the way you get PR.

You need to bring your own crowd to your crowdfund. Most of your investors will likely be LinkedIn connections, people you already have a relationship with. You have to be able to connect with them emotionally so they understand what you are trying to achieve. Customer service is important, too. Your crowd already feels connected, so you need to spend the time answering their questions, listening to their suggestions, etc.

If things go wrong, and they will … get out in front of the issue and communicate openly and honestly with your crowd about what went wrong, how it went wrong and what you are doing to mitigate the problem.

Crowds often contain “smart money,” or investors with experience or connections that may be able to help you. Always communicate early and often with your crowd.

You talk a lot about post-campaign. What is some advice on that?

It’s really important to satisfy your first customers. They will be your brand ambassadors, and they will give you critical feedback.

Post-campaign, thank your supporters. Then communicate how you will communicate with them — is it emails, a LinkedIn group, Twitter? They need to understand how they can track your progress. You can use video, audio and photographs in your updates to them. You just raised money for your business, and you will need to raise more and build your crowd out over time.

Engage your crowd and you can can return to them over time, whether it’s for money or their expertise or their feedback.

What happens if your campaign doesn’t make it over the finish line?

First, thank those people who supported you. Then look at the campaign and the product or service or company and what you were trying to build. One of the the magical things about crowdfunding is the opportunity to understand what your product market fit is before you build thousands of products and try to scale a business. It may be that that product that you fell in love with, that you thought would hit its target, didn’t quite do that. Or maybe it just needs a tweak or a pivot.

Should you try again? The answer is maybe. Look at it to see if there’s a tweak or pivot, or it might be time to move on.

What are some other benefits?

We’ve worked with many different entrepreneurs around the world. In addition to learning a lot, they have gained press exposure, they made long-term business partnerships, found other types of investors over time, and they have found new customers.

What does the data you are tracking show about how equity crowdfunding has gone so far?

About $10 million has been committed to regulation crowdfunding campaigns since it launched May 16. Based on the number of offerings going live each week and the growth of investor commitments, we estimate by the end of the first year, May 2017, $100 million in capital commitments will be made. We think this represents a logical start to the industry. It shows that investors are being methodical with how they deploy capital and that companies, that otherwise wouldn’t qualify for bank financing or hit the sweet spot of Angels or VCs, are finding capital from engaged communities.

What are some key trends you are seeing in the early campaigns?

Looking at all the campaigns, you can tell that those that have well-produced videos — that include the entrepreneur and discuss the market opportunity and how they will use the proceeds — get funded over campaigns that just show videos that explain the product or service.

The data also show early signals that regulation crowdfunding is living up to its expectation that it will help main street businesses that don’t qualify for traditional financing. Those companies that have realistic valuations are getting funded three-times faster than companies that have set unrealistic valuations for their firms. And companies that have robust disclosures are getting funded over those whose disclosures seem almost whimsical.

Nancy Dahlberg: 305-376-3595, @ndahlberg

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October 10, 2016

itopia raises $3.5 million to fund growth

Jon Lieberman Photoitopia  has secured $3.5 million in funding to accelerate its growth, the Miami-based technology company’s CEO said on Monday.

itopia, founded in 2012, is in the “Workspace-as-a-Service space and is the only technology company offering an end-to-end, cloud workspace management platform designed exclusively to help IT service providers simplify the migration to and ongoing management of cloud services from a single dashboard, said Jonathan Lieberman, itopia co-founder and CEO.

“The global market is rapidly moving to a cloud-first world where businesses are demanding that their IT service providers deliver secure and seamless access to data anywhere, anytime and on every device,” said Lieberman, in a statement (pictured at right). “Our new funding exceeded our target and the time is now to capitalize on the market growth and the potential around WaaS by providing channel partners with the technology and tools they need to lead and thrive in this new reality.”

Ubaldo Don Photo (1)itopia said it plans to use this funding for expanding channel development teams, including inside and field sales, digital marketing and partner support; enhancing itopia’s IT service provider partner program with additional training and educational resources; and accelerating itopia’s innovative engineering effort.  “With this new funding, itopia gains the resources to generate greater awareness for its proprietary Cielo cloud workspace management platform,” said Ubaldo Don (pictured at left), itopia co-founder and CTO. itopia would not disclose total funding raised.

The new funding is co-led by John McIntire and Eric Kamisher, both early investors in Open English and other ventures, and IT industry leader Sean Charnock. McIntire and Kamisher will join Charnock on itopia’s Board of Directors. Other prominent local investors who are also on itopia's board include Bill Pruitt, founding investor in Mako and VirtualStream, Sherrill Hudson, former Chairman of the Board and CEO at TECO Energy and Managing Partner at Deloitte, and Steve McKean, Co-Founder at Acceller and BillShark.

itopia has 33 employees including its software development team and plans to grow to more than 50 soon, Lieberman said. Nearly 1,500 leading enterprise software applications are certified on itopia’s platform, with new applications added regularly. Last year, itopia was just named one of the 15 coolest cloud companies by CRN, a well-respected technology industry publication.

September 08, 2016

Aventura-based Zenedge, a cybersecurity company, closes $6.2 million financing round

Zenedge, a  provider of cybersecurity solutions, announced Thursday that  it has completed a $6.2 million Series C investment led by growth equity investor Pilot Growth Equity.  Pilot Growth led the round with a $5 million investment, with additional funds coming from Zoho Corporation, as well as from existing investors TELUS Ventures and Yehuda Neuberger. 

The financing will be used to fund Zenedge's continued global expansion, sales and marketing activities and for further investment in its patent-pending technology. William Lee, co-founder and managing director at Pilot Growth, will join Zenedge's board of directors. With this new Series C round, total investment in the Aventura-based company is $13.7 million.

Founded in July 2014, Zenedge provides organizations a cloud-based enterprise-class, managed cybersecurity Infrastructure-as-a-Service to help secure their web applications and networks against vulnerabilities and DDoS attacks. Unlike other Web Application Security solutions in the market, Zenedge said it leverages patent-pending deep machine-learning capabilities to detect anomalies, dynamically alter security postures, and initiate auto-mitigation and automatic routing with minimal to no human intervention. This allows the company to provide better cybersecurity and faster time to mitigation than traditional cloud and on-premise cybersecurity vendors, ultimately resulting in less and shorter business interruptions, while helping reduce operational costs, said its founder and CEO, Yuri Frayman.

 “We are thrilled to welcome Pilot Growth to lead our Series C round and have William Lee join our board of directors, as they represent a partner that provides us not only with capital, but vast strategic experience and relationships,” said  Frayman, who sold his last company to Google. "We are also excited to welcome Zoho, already a strategic Zenedge customer, as a new investor in this round.”


September 07, 2016

New World Angels invests $538K in Gainesville medical device company

It's been an active year for the New World Angels.

This week, New World Angels announced the completion of its third investment in OBMedical, the developer of a wireless fetal monitor.

NWA closed a $538,000 investment into OBMedical’s Third Series Convertible Notes.  OBMedical has recently begun sales and marketing of the LaborView, an FDA-approved wireless device designed to replace current cumbersome fetal heart monitors used during labor.   The OBMedical LaborView interfaces to existing legacy fetal monitors and provides enhanced performance combined with total freedom of movement as compared to ultrasound devices in common use.

“New World Angels is delighted to continue to support the growth of OBMedical and the expansion of a product that improves the labor and delivery process for women,” said NWA President Steve O’Hara, in a statement.  “New World Angels’ member, Dr. Scott Dresden, has worked closely with management since our original investment in September, 2014 serving on OBMedical’s board for the last two years.”

Previously, New World Angels had invested $1.1 million in OB Medical’s Series 1 Convertible Notes and $527,500 in OB Medical’s Series 2 Convertible Notes.  The Series 1 and Series 2 Convertible Notes were converted into Series A Preferred Stock in May 2016. OBMedical is based in Gainesville.

New World Angels, based in Boca Raton,  is a group of 63 accredited, private investors, operators and entrepreneurs dedicated to providing equity capital to early-stage entrepreneurial companies with a strong presence in Florida.

NWA's 2016 investments include both add-on investments in portfolio companies and new investments including Synkt Games, a South Florida-based sports fantasy game startup, Miami-based Kairos, a facial recognition software company, and Gainesville-based Admiral, which has developed software to prevent ad blocking. Its biggest investment this year has been $750,000 in Polarean, a Durham, N.C., company with Florida operations that has developed a device to improve the readability of lung scans. Early this year, NWA announced it led a $1 million investment round in Miami-based Raw Shorts, a Miami startup that enables users to easily create explainer videos. 


August 26, 2016

Finova Financial raises $52.5 million for lending platform

By Nancy Dahlberg / ndahlberg@miamiherald.com

Finova Financial co-founders Greg Keough and Derek Acree launched the cloud-based company to give consumers in need of emergency cash a loan  alternative to the triple-digit, punitive offerings in the traditional “payday” lending marketplace. The West Palm Beach-based fintech company focused on the auto-title lending industry recently announced it has raised $52.5 million in a combination of equity and debt.

The funding round was led by Silicon Valley and international venture capital firms including MHS CapitalRefactor CapitalMetamorphic Venture and 500 StartUps, as well as leading fintech entrepreneurs such as Sam Hodges, co-founder and managing director of Funding Circle, Jake Gibson, co-founder of NerdWallet and Al Hamra Group, a private company owned by the ruling family of Ras Al Khaimah, United Arab Emirates. CoVenture provided the credit facility to support the enterprises’ growth. “Finova has earned great traction, and we look forward to working closely with them as they scale rapidly, giving consumers the opportunity to get back on track financially.” said David Lee, co-founder and managing partner of Refactor Capital, in a statement.

Finova Financial_Greg Keough (2)The funding will be used by Finova to grow the all-digital lending platform serving the auto title loan marketplace while delivering up to 70 percent lower cost to consumers.  Finova Financial’s  online Car Equity Line of Credit (C-LOC) product and lending platform offers consumers a significantly less expensive auto title loan alternative, with 12 months to repay, an opportunity to repair their credit score, and a chance to earn performance points that can be used for grace periods in the repayment process, the company said.  This is in stark contrast to traditional lending models and it's the first in a series of products planned to address the needs of the hundreds of million of unbanked and underbanked consumers globally. The company successfully piloted its product in Florida.  

“Finova Financial was launched to help consumers get critically-needed cash without the traditional barriers of high interest rates, inconvenient application processes and restrictive payment terms of the auto title lending industry,” said Keough (pictured above), Finova’s CEO who has led a number of fintech ventures including MFS and RegaloCard. “As a company committed to social impact, we see Finova Financial as being an advocate for consumer financial well-being through improved access to credit, better repayment terms and lower costs.”



Miami-based fantasy game startup scores investment from New World Angels

LetsRUMBL SPLASHBy Marcia Heroux Pounds / Sun Sentinel

Boca Raton's New World Angels has invested in a fantasy sports game startup.

Miami-based Synkt Games has a mobile app, letsRUMBL, designed to attract the nonprofessional player. They can choose to play against friends or random individuals in daily baseball and basketball games or weekly football games. The app has "tens of thousands" of users, said Synkt Games CEO Bryan Abboud.

Synkt's latest version of the app will launch through Apple's iTunes on Friday, in time for football season, he said.

An unusual investment for this South Florida  angel group? Not so, said Steve O'Hara, president of New World Angels, a 63-member group of investors who only finance companies that are based in or have a major tie to the state.

"We invest in small startup companies on the verge of exploding," O'Hara said. Those have traditionally included investments in consumer, medical and technology companies, not gaming or apps, and it has invested a total of $7.4 million since the angel group was founded in 2003.

O'Hara said he likes the app game because he's not an experienced player but enjoys competing with his son, who lives in Chicago.

But he likes the investment, $140,000, because of Abboud's gaming industry experience. Synkt Games has raised more than $1 million in total, according to CrunchBase, which tracks innovative companies and their funding.

Abboud, who also is a director at New World Angels, previously co-founded IGW Software, which provided software and tech support to the online gaming industry, and the Interactive Gaming Council, a trade association for the industry.

With letsRUMBL, Abboud said he wanted to create a game app that was more accessible to the casual player, designed to be easy to use and more affordable.

Aboud"If we play an event that's $2 each, we take 40 cents off the top and pay out the rest to the winner," he said.

Most daily fantasy sports games are over-run by "highly experienced" players, he said. However, spokeswomen for two of the most popular games, DraftKings and FanDuel — which claim 7 million and 6 million users, respectively — dispute this, saying only a small percentage of their users are so-called "pros."

New World Angels has been particularly active in 2016, with both add-on investments in portfolio companies and new investments including: Miami-based Kairos, a facial recognition software company; Newberry-based OBMedical, which has developed products to monitor fetal heart rate; and Gainesville-based Admiral, which has developed software to prevent ad blocking.

The group's biggest investment this year has been $750,000 in Polarean, a Durham, N.C., company with some Florida operationsthat has developed a device to improve the readability of lung scans.

August 17, 2016

Fintech company Nymbus closes $12 million financing round

By Nancy Dahlberg / ndahlberg@miamiherald.com 

On the heels of a summer acquisition spree, Nymbus, a Miami-based financial technology company, announced this week that the company has completed a $12 million financing round led by major shareholders of Vensure Enterprises.

Nymbus, founded in 2015 and now with about 150 employees, provides mission-critical core technology for financial institutions that not only drives day-to-day operations, but also serves as the institution’s backbone for new capabilities and growth. 

With the funding, Nymbus will accelerate product deployment and infrastructure teams to support the company’s SmartCore platform, as financial institutions of all sizes attempt to transform their technology for the new digital economy.

"Nymbus is here to help the 12,500 financial institutions encumbered by some of the oldest enterprise technology still in use, many developed as long as 30 to 40 years ago,” said Scott Killoh, Nymbus’ executive chairman. “This additional funding will help us rapidly convert the already high demand for our SmartCore platform." 

This summer, the company announced a trio of acquisitions: KMR, a provider of software services and products to credit unions; R.C. Olmstead, which serviced credit unions in the Midwest; and Sharp BancSsystems, a Texas-based financial software provider. With the Sharp acquisition, the company acquired $200 million of intellectual property, running software that has been tried and tested in publicly-traded financial institutions, Nymbus said.

At least two executives on the Nymbus team, Killoh and Harry Flood, were recently listed as directors in Miami Beach-based Vensure Enterprises.


August 12, 2016

Fort Lauderdale biotech company receives small-business research grant

By Marcia Heroux Pounds / Sun Sentinel

Fort Lauderdale-based Vigilant Biosciences announced Thursday it has received a Small Business Innovation Research grant for more than $200,000 from the National Institute of Dental and Craniofacial Research. The 15-month grant will finance research to develop a diagnostic test that utilizes optical imaging in combination with an oral rinse to detect a tumor-initiating biomarker for oral cancer, the company said. 

Vigilant Biosciences, founded in 2011 by Matthew Kim, has developed an oral rinse test for use by dentists for the early detection of oral cancer. Kim was inspired by his family history of oral and other cancers to start the company. In May, Vigilant Biosciences made its oral rinse test available to dentists in the United States. Earlier that month, Vigilant announced it had received European Commission approval to market its oral cancer test. The company has raised $12.5 million from investors to develop its product line.

Read more: Vigilant Biosciences raises $5 million to take oral cancer detection products to market

August 09, 2016

Hollywood-based Woundtech raises $40M in private equity

 Woundtech, a South Florida wound management technology company, announced Tuesday that it has closed a $40 million Series A investment by Aldrich Capital Partners.

Woundtech, based in Hollywood, provides comprehensive wound care, via a telehealth-based platform, to patients in over 35 major health plans and over 250 Managed Services Organizations, Independent Practice Associations  and large medical groups representing over 4 million insured patients in the U.S. and Puerto Rico, the company said in a news release.

"This investment highlights our view that wound management services is a rapidly growing $50 billion a year industry in the U.S. and expected to grow to over $200 billion in the next several years," said Mirza Baig, a partner at Aldrich, a private equity firm focused on the healthcare IT, fintech, business services and enterprise software sectors. "Like other telemedicine and analytical platforms from the last decade, Woundtech is bringing a new level of service and management to an industry still reliant on misaligned hospital-based programs and expensive and inappropriate therapies.”

Dr. Jeffrey Galitz, CEO and founder of Woundtech, said Aldrich's investment will allow Woundtech to expand its footprint within and outside the U.S., aas well as add related service lines. Employing physicians podiatrists, nurse practitioners and physician assistants, Woundtech brings the wound care center to the patient utilizing its wound care specialists on the ground along with a telemedicine platform and proprietary analytics and software.

"Woundtech has lowered direct costs to healthcare payers by an average of 70 percent, reduced wound related hospitalizations by 95 percent and reduced expensive unproven treatment modalities by over 95 percent," Galitz said.  "We do all of this while increasing access to care for patients by treating patients where ever they reside such as in the comfort of their own home.”