SpineZone is the latest health tech startup to raise millions in the musculoskeletal space

SpineZone is a startup that creates personalized exercise programs and treatment for neck and back pain. The company uses an online platform and in-person clinics to deliver a curriculum that, ideally, helps patients avoid the need for prescription drugs, injections and surgeries, and providers then avoid the cost of all of the above. Co-founded by brothers Kian Raiszadeh and Kamshad Raiszadeh, the company tells TechCrunch that it has raised $ 12 million in a Series A round led by Polaris Partners and Providence Ventures, with participation from Martin Ventures.

At its core, SpineZone is a virtual physical therapy platform augmented by in-person clinics. The latter bit is important because it takes a video repository, which has health outcomes baked into it, and helps get those same users some real-life support.

Patients can log onto the site, either through smartphone or laptop, and then answer a series of questions around pain and risk factors. Then, patients can go through a series of exercises. These exercises are created in tandem with professionals, and are based on peer-reviewed and evidence-based articles on musculoskeletal health.

Beyond this digital archive of videos, SpineZone offers an in-person clinic option to help patients practice these exercises. Off of this strategy, the startup claims that it has “1 million lives under management.”

SpineZone’s value proposition is that it helps payers and providers, whether that be employers, clinics or health plans such as Cigna or Aetna, avoid placing their patients in surgeries, which are expensive. By taking care of pain issues before they bubble up, SpineZone says that its current partners have been able to have a 50% reduction in surgery rate (it’s worth noting that COVID-19 could also play a role in this because it is high-risk to enter a medical facility).

Partners are happy because footing the bill of a non-operative procedure is remarkably cheaper than a non-operative procedure.

The cost saving that a medical center could endure can be in the millions. For example, the Sharp Community Medical Group saved $ 3.4 million in cost savings after working with SpineZone for two years.

SpineZone’s business model is a smidge more complicated than your classic SaaS fee. For example, it charges a clinic based on the number of members it serves per month, and also shares in the downside. For example, if SpineZone promises to get a clinic to $ 12 million in spend from $ 15 million, and the cost ends up being $ 17 million, the company will pay the clinic a portion of the difference. Alternatively, if SpineZone got the clinic to $ 10 million, even below estimates, it shares in the upside.

SpineZone joins a cohort of health tech startups that focus on musculoskeletal conditions. Venture-backed competitors include Peerwell, Force Therapeutics and Hinge Health, which was most recently valued at $ 3 billion, with plans to go public.

In order to win, many startups, SpineZone including, need value-based care to replace fee-for-service care. Value-based care is the idea that doctors are paid for outcomes instead of the number of times you enter a doctor’s office. The end goal is that this format creates monetary incentives around getting to an outcome faster: If a doctor is going to make $ 30,000 on fixing a knee, regardless of whether it takes two appointments or 20 appointments, they might as well do a more thorough job upon check-up instead of elongating the process. The flipside of this, of course, is that doctors might optimize for outcome volume and speed rather than the quality of the result itself.

While SpineZone’s early traction is promising, the healthcare ecosystem still has a ways to go before value-based models take precedence. Right now, Kian Raiszadeh estimates that 10 to 20% of revenue in a medical center comes from value-based care. SpineZone is projecting that it will get to 50% of revenue in the near future.

“And that’s the biggest evolution and tallest lift that we’re expecting,” he said.


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Startups – TechCrunch

Coupang may raise up to $3.6 billion in its IPO, at a potential valuation of $51 billion

According to an amended S-1 filing, South Korean e-commerce leader Coupang expects to price its initial public offering between $ 27 to $ 30 per share, potentially raising up to $ 3.6 billion. After the IPO, Coupang will have a total of 1.7 billion shares outstanding, including Class A and Class B. This means the means the pricing would give Coupang a potential market capitalization between $ 46 billion to $ 51 billion, a huge increase over the $ 9 billion valuation it reached after its last funding round in 2018, led by SoftBank Vision Fund.

Coupang and some of its existing shareholders will offer a total of 120 million shares during the IPO.

If Coupang’s IPO is successful, it would be a huge win for SoftBank Vision Fund, which will own 36.8% of its Class A shares after the listing.

Founded in 2010 by Bom Kim, Coupang is known for its ultra-speedy deliveries and is now the largest e-commerce company in South Korea, according to Euromonitor. According to the filing, Kim will hold 76.7% of voting power after the listing, while SoftBank Vision Fund will hold about 8.6%. Other investors that currently own 5% or more of Coupang’s shares include Greenoaks Capital Partners, Maverick Holdings, Rose Park Advisors, BlackRock and Ridd Investments.

Coupang filed to go public on the New York Stock Exchange last month, under the symbol CPNG. Based on Bloomberg data, Coupang’s listing will be the fourth-biggest by an Asian company on a U.S. exchange, and the largest since Alibaba’s $ 25 billion IPO in 2014.

Startups – TechCrunch

Microtraction backs Kenya’s Raise, Twitter’s $7.5bn shot, Facebook’s revenue battle – Techpoint Africa

Microtraction backs Kenya’s Raise, Twitter’s $ 7.5bn shot, Facebook’s revenue battle  Techpoint Africa
“nigeria startups when:7d” – Google News

As BNPL startups raise, a look at Klarna, Affirm and Afterpay earnings

As the e-commerce market grows, startups are racing to help online retailers sell larger items to consumers with so-called “buy-now-pay-later” options. Via BNPL, consumers turn a one-time purchase into a limited string of regular payments.

Terms vary, but the space is very active. TechCrunch covered Scalapay’s January $ 48 million round, what the Italian BNPL described as a seed round. Also this year, we’ve seen France’s Alma raise a $ 59.4 million Series B for its BNPL efforts. And I recently covered Wisetack’s aggregate $ 19 million fundraise as it looks to make more noise about its service that focuses on real-world transactions like home improvement.

But unlike some burgeoning startup niches where we lack visible results from leading players to use as a lens for vetting the market, we do have a number for the BNPL space. This morning, to better understand what’s going on with the younger companies hoping to help you finance your next mistaken purchase, let’s check out earnings results from Klarna, Afterpay and Affirm.


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Klarna, based in Sweden, is said to be considering a direct listing. Its 2020 results are here. Afterpay, based in Australia, went public a few years ago. Its H1 fiscal 2021 results are here. And then there’s Affirm, the recently public U.S.-based BNPL company that had a recent direct listing. Its fiscal Q2 2021 (calendar Q4) results are here.

Let’s see how the three are doing, yank learnings for the mix and then check our gut about what their results might mean for BNPL startups the world ’round.

BNPL results

The BNPL cohort of startups is showing signs of pursuing verticalization to find veins of market demand that remain untapped by the largest players in their market. So, while Affirm wants to check you out everywhere online, providing you with repayment options wherever you travel digitally, Wisetack wants to integrate with a particular set of merchants. The latter model could provide startups pursuing similar, narrower market targets the ability to better understand their economics and perhaps generate more total margin on their loans.

That’s a long way to say that even with the information at our disposal, we’re thinking directionally. But doing so is both good fun and illustrative, so let’s get into it. First, Klarna.

Klarna

This morning we’ll look at Klarna’s Q3 2020 report and its Q4 report from the same year.

The gist is that Klarna had a super-solid 2020. In its Q3 update, Klarna wrote that it saw 43 percent growth in gross merchandise volume during the first nine months of the year. In its Q4 report, it noted a full-year number of 46 percent GMV growth. From that, we can intuit that Klarna had a great fourth quarter.

Turning to the U.S. market, Klarna first reported “10 million total consumers by [the Q3] period end, and 11 million by the end of October.” And for the full year, it wrote that it had seen “15 million consumers choosing to shop with Klarna by January 2021” in the United States. Again, those look pretty great.

Startups – TechCrunch

A point where it’s immoral to raise funds?

My first startup, founded right after college, I'm 27. Biotech.

I've poured my soul into it for ~5 years and we've stalled technically again and again. It hurt to come to terms with but I think if we don't reach our MVP by early Summer it will be time for me to leave, to give some context.

Investors keep reaching out. I am happy to tell them about what we aim to do but I feel conflicted about feigning optimism.

What is appropriate here? As a CEO, should I secure whatever funding I can to support the team and extend runway, or should I be honest about how make or break our situation is and tell them that we would love to stay in touch to discuss investment should we reach our technical goals? I don't have experience to know whether this is a judgement call for each CEO or if there is an accepted standard.

Any input is helpful, thank you.

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Startups – Rapid Growth and Innovation is in Our Very Nature!

From food delivery to housing: Former Favor founders raise millions for Sunroom Rentals

Real estate tech startup Sunroom Rentals, which leases units on behalf of property managers and apartment owners, has raised $ 11 million in a Series A round of funding led by Gigafund.

Ben Doherty and Zachary Maurais, former founders of the delivery app Favor, launched Sunroom in May 2018 with the mission of “boosting the profitability” of mid-size property managers and apartment owners by giving them a way to outsource their leasing operations.

The pair sold Favor to Texas grocer H-E-B in 2018 and soon after shifted their focus on building out Sunroom. The Austin-based company has developed an app that it says gives renters a way to tour, apply for and lease a unit “entirely online.” COVID-19 has led to more renters wanting virtual ways to explore and secure rental units. Mobile-first, Maurais noted, is particularly appealing to millennials and Gen Zers.

“Personally, we love to create products that fulfill consumer’s most basic needs,” said Maurais, the company’s president. “With food under our belt, we decided to focus on housing.”

While one might wonder what the parallels between food delivery and housing might be beyond fulfilling consumers’ needs, CEO Doherty said the rental market in 2021 looks a lot like the food delivery market in 2013.

“In 2013, Grubhub had successfully put many restaurant menus online, but most of the transactions and delivery process was still offline,” he told TechCrunch. “We’re in a similar position with the rental market, as the majority of rental listings are online, but touring, applying or leasing units is still done offline.”

Since its launch, Sunroom Rentals has signed more than 2,000 leases and had over 100,000 renters sign up for its services in fast-growing Austin, where it focused its initial efforts.

“According to the U.S. Census, that represents roughly 10% of renters in the greater Austin metro,” Maurais said. “Instead of going shallow and wide nationally, we decided to go deep in markets, in an effort to gain network effects, which was a strategy that worked well for us at Favor.”

Sunroom Rentals claims that it’s leasing units five days faster than the market average. This benefits property managers, Doherty said, because they can grow quicker “while improving leasing performance.”

Looking ahead, the company will use the funding to expand across Texas, including in Houston, San Antonio and Dallas. It will also invest in its partner portal, which aims to give owners and property managers a way to view real-time data on leasing performance.

Sunroom Rentals currently has 18 employees with the goal of more than doubling its headcount this year. It’s in particular looking to hire across its engineering, product and sales departments.

As mentioned above, Gigafund led the Series A financing, which included participation from NextGen Venture Partners, Calpoly Ventures and a slew of angel investors, including Gokul Rajaram (Google & Square) and Homeward’s Tim Heyl, among others. Existing backers include Founders Fund Seed, Draper Associates, Boost VC and Capital Factory (among many others). The round marked Sunroom’s first “priced” round, meaning the first time it’s given up stock.

Jonathan Basset, managing partner at NextGen Venture Partners, believes Sunroom was essentially in the right place at the right time and “on trend with touchless leasing even before COVID hit.”

“I watched them build a profitable consumer marketplace in a competitive market with Favor and was impressed with them as operators,” he said. “These businesses have a surprising amount of similarities and I’m confident they can rise to the challenge.

Last week, TechCrunch reported on the raise of another startup operating in this increasingly crowded space. Seattle-based Knock — a company that has developed tools to give property management companies a competitive edge — raised $ 20 million in a growth funding round led by Fifth Wall Ventures.

Knock’s goal is to provide CRM tools to modernize front office operations for these companies so they can do things like offer virtual tours and communicate with renters via text, email or social media from “a single conversation screen.” For renters, it offers an easier way to communicate and engage with landlords.

Maurais said the two differ in that Knock is a CRM built for leasing agents with a SAAS model where as Sunroom is a marketplace, where renters match, tour and apply with partnered properties.

“Sunroom also provides a suite of leasing & analytics software to its partners and generates both transactional and subscription revenues,” he added.

Startups – TechCrunch