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I recently got pinkeye. Yes, as an adult. And, yes, it was disgusting. But the treatment should’ve been simple: I saw my doctor, who prescribed a common antibiotic and told me the eyedrops would be ready in an hour. Except they weren’t. Tomorrow morning, my local pharmacist told me, but they weren’t ready then, either—or later that day. After hours of waiting, I couldn’t tell if the tears were from the conjunctivitis or my frustration.
We live in a world in which Google knows I need new shoes before I do. Yet the U.S. health care industry—which recorded profits of $558 billion in 2021 (more than the tech sector made in revenue)—remains so fragmented that no one could notify me that my prescription was going to be delayed. This is not rare: According to a 2019 survey by the Commonwealth Fund, fewer than half of American primary care physicians say they receive information from specialists about changes to patients’ treatment plans, compared with more than 70 percent in Norway, New Zealand, and France.
Help, however, is beginning to arrive. And by “help,” we mean money: Between 2018 and 2022, the amount of venture capital (VC) investment in health care technology in the United States grew 72.5 percent to $59.3 billion, according to the Venture Monitor Report compiled by PitchBook and the National Venture Capital Association. “VC likes large markets, and health care is a really large market,” says John Francis, a partner at Denver-based Stout Street Capital. In the 2000s, investors eschewed health care in favor of financial technology, such as mobile banking, and then moved on to consumer technology like Airbnb and Uber in the 2010s. Medicine was deemed too regulated to be profitable. “Health care is one of the last sectors that hasn’t undergone that digital revolution,” Francis says, “and people are just realizing it now.”
Colorado’s ecosystem is a fertile ground to foment the uprising. Health care startups here raised $2.11 billion in VC investment in 2022, according to data from PitchBook. “In the past, health care innovation was centered in [North Carolina’s] Research Triangle, Houston, and Boston,” Francis says, “but every hub had its own characteristics. In Boston, for example, half of the startups are trying to cure cancer. In Colorado, we see a good mix of everything.” The Centennial State’s diversity owes itself to a blend of urban and rural communities, a large number of higher education and other research institutions that are making products to meet common American needs, and technology veterans who bring expertise from the coasts.
What Colorado’s broad range of startups have in common (besides gobs of new capital) is what they hope to achieve with that cash: a health care industry that works. Here’s how they plan to mend the cracks in America’s fractured system.
Venture Capital Investment in Colorado Health Care Startups:
Room to Grow
According to Coldwell Banker Richard Ellis, Colorado biotech and life science companies are expanding so fast that they need about 1.3 million square feet in additional workspace. Developers and companies alike are spending hundreds of millions of dollars to add to the industry’s footprint.
- Blackstone: The New York City private equity company bought Flatiron Park, a 22-building life-science-focused development, last year and plans to spend $200 million to redevelop the property.
- Conscience Bay: The Boulder developer plans to replace an existing warehouse with Ridgeway Science and Tech, an office campus for life science companies, by 2026.
- HatchLabs @ Wilderness Place: The facility will include individual lab suites with shared amenities.
- Enveda Biosciences: Enveda announced plans to build a new lab that will further its exploration of plants for potential ingredients for pharmaceuticals.
- OnKure: The Boulder company announced the unveiling of a new lab that can expand its research into more cancer treatments.
- Colorado Research Exchange (CoRE): Having broken ground in late 2022, CoRE is being developed by Dallas-based Lincoln Property Company for life science and technology companies.
- Terumo Blood and Cell Technologies: The Lakewood company’s $250 million plant opened in 2022 and produces collection equipment for its plasma-donation centers.
- Bioscience 5: In 2022, Fitzsimons Innovation Community, a campus for life science, delivered Bioscience 5 to house gene and cell therapy manufacturing.
- Innosphere Ventures: In March 2022, this startup incubator opened a new facility that houses 10 500-square-foot private labs for budding bioscience startups.
- AGC Biologics: The Washington-based company spent $30 million to expand its gene therapy capabilities.
- LightDeck Diagnostics: LightDeck bought a facility in 2021 in order to expand manufacturing of its diagnostic tests (including ones for COVID-19).
- Agilent Technologies: The California company has broken ground on a $725 million expansion to its manufacturing facility, which makes DNA and RNA molecules for pharmaceuticals.
- Medtronic: In 2021, the Minneapolis-based medical device company announced plans to move its research and development operations from its Boulder and Louisville locations to a new 42-acre campus.
- Sterling Bay: The Chicago developer plans to turn a former Ball Corp. building into lab and office space.
- Brue Baukol Capital Partners: After voters vetoed the Denver-based developer’s plans for a mixed-used development on a 400-acre parcel, Brue Baukol decided to shift to a commercial-only development for bioscience companies.
- Umoja BioPharma: Seattle-based Umoja spent $44 million to build out a new research and manufacturing center for its cancer-focused immunotherapies.
(Source: Colorado Bioscience Association)
How to Raise a Unicorn
Thanks to five funding rounds that together total more than $700 million, DispatchHealth has grown from a regional experiment into a billion-dollar tech company intent on transforming house calls.
Following the Money:
October 2015 – $3.6 million
Dr. Mark Prather, an emergency medicine doctor at Denver Health, had co-founded True North Health Navigation in 2013 after launching a pilot program with one of the hospital’s partners, South Metro Fire Rescue, to expand in-home EMS services. The result was a mobile ER that could often deliver the same care as a hospital without removing patients from their homes. “We can’t take your gallbladder out in the living room,” says Prather, now CEO, but the company can administer breathing treatments or IV medications.
At the end of the two-year partnership, Prather had enough data to show that True North lowered costs without sacrificing patient care, landing him a deal with Anthem to grow services across metro Denver. (The company changed its named to DispatchHealth in 2015.) The security of the contract persuaded investors to fund the startup’s expansion, enabling the company to buy branded cars as well as hire health care professionals to fill them and a dispatcher to direct them where to go.
May 2019 – $33 million
From 2016 to 2019, DispatchHealth expanded into 11 states, but this round of financing allowed the company to grow what it calls advanced care—care that normally would’ve required time spent in the hospital—starting in Denver. “We have built over the years what is called a ‘moderate complexity lab,’ ” Prather says. “So that meant we could show up at the bedside and essentially have every blood test I would have had in the emergency room.”
June 2020 – $135.8 million
With its in-home care model already established, DispatchHealth was called upon early in the pandemic: Chief medical officer Dr. Phil Mitchell treated Colorado’s first known COVID-19 patient. The startup’s network (then in 18 markets across 12 states) became an attractive option for investors, who helped pay for DispatchHealth’s moves into Florida, Connecticut, North Carolina, Ohio, and Tennessee.
March 2021 – $200 million
DispatchHealth reached unicorn status (a startup worth $1 billion) thanks to this round. More important to Prather: The company could continue to build what he calls its web of “hospitals without walls,” acquiring two mobile imaging businesses that made DispatchHealth the largest provider of in-home X-rays and ultrasounds.
When taken to a physical hospital, elderly people have to be readmitted following discharge roughly 20 percent of the time. DispatchHealth claims it has reduced that statistic to about seven percent.
To ensure it could deliver that level of care, DispatchHealth required a sophisticated back-end logistics system. In May 2021, the company hired Daniel Graf, who built Uber’s platform, as its chief product and technology officer. Today, the company’s software uses machine learning to deduce how quickly it needs to arrive on the scene to treat a patient and how long the health care team will likely be there.
November 2022 – $330 million
The largest investment round for a health care company in Colorado history will go toward expanding DispatchHealth’s full suite of in-home offerings (from advanced care to high acuity long-term care) from just 10 markets to all 62 the company currently services, in 35 states total. And after that? Perhaps more acquisitions and maybe an initial public offering. “I’m proud of what we’ve built,” Prather says. “But I’ve got more to do.”
When kids’ medications run short, hospitals turn to STAQ Pharma.
In 2012, a compounding pharmacy in Massachusetts shipped steroid injections that were contaminated with mold to patients across the country, sparking a fungal meningitis outbreak that ultimately killed 64 people and infected almost 800. The incident led the Food and Drug Administration (FDA) to overhaul parts of the pharmaceutical business. To provide greater oversight, the agency created two classifications of compounding pharmacies: 503A facilities, which require a prescription and make medications on a case-by-case basis, and 503B operations, which can manufacture large batches of sterile drugs (IVs, eyedrops, and injectables that are at a higher risk of infection than, say, suppositories) and sell them prepackaged to providers, mainly hospitals. The latter are called outsourcing facilities.
Outsourcers sprung up to service the more than 6,000 hospitals in the country, but their products did not seamlessly transfer to the 32 standalone children’s hospitals, because kids need different dosages than adults, including treatments such as sterile electrolyte solutions (IVs that deliver nutrients to premature babies). “If we can’t get those things,” says Jerrod Milton, chief clinical officer at Children’s Hospital Colorado (CHC), “it’s a major problem.”
Roughly five years after the FDA’s revamp, there still wasn’t a 503B that catered primarily to pediatric hospitals. At the time, Mark Spiecker was completing the sale of Sharklet Technologies, his Denver-based biotechnology startup. He and his partners, Joe Bagan and Jeff Hval, founded STAQ Pharma to fill the gap.
The trio identified the products to focus on and—thanks to investment from CHC—began construction on a Denver production lab in 2019. (STAQ is partially owned by hospitals, whose representatives sit on the company’s board. They are also all customers.) According to its FDA status, STAQ can make any generic drug it wants.
$60 million – The cost of the lab STAQ is building outside of Columbus, Ohio. The facility will be four to five times larger than the company’s 27,000-square-foot Denver operation.
The agility allows STAQ to react to market demands—or, more accurately, market needs. In 2022, hospitals witnessed spikes in the number of respiratory syncytial virus (RSV) patients that were flooding their ERs. In November, CHC reported cases were 30 percent higher on average than during the typical January, February, and March, historically its busiest three-month period for respiratory illnesses. At the same time, the two largest makers of albuterol, a treatment that can help RSV sufferers struggling to breathe, left the market after they ran afoul of the FDA. “We believe there are about four weeks of albuterol left in the United States right now,” Spiecker said this past January. Working with the Children’s Hospital Association, STAQ pivoted its focus and began churning out generic albuterol and delivered its first batch in early 2023.
Spiecker says STAQ Pharma can’t afford to always be reactive in the long term. After all, there’s a chance that, by the time the company reacts to a dearth of supply, the medicine in question could no longer be scarce because other manufacturers have filled the gap. For the time being, however, STAQ believes it’s the only pharmacy in the country capable of providing sick children the breathing room they need.
Big Brother, M.D.
If you allow Google to rummage through your data just to receive more personalized ads, shouldn’t you also give your doctors a peek so they can provide more personalized care? These Denver startups think so.
Money raised: $6.5 million
Initially created as a fitness-coaching app, Exer uses the camera on your phone or tablet to watch you exercise and measure your movements. In the past, the startup critiqued your core work (an app called the Perfect Plank) and gamified your workouts (Exer Studios, a Peloton-like hub). Now the startup is evaluating range of motion so, say, sports medicine physicians can track the progress of a patient recovering from shoulder surgery.
In the future: A 2018 study by King’s College of London researchers found that each 0.1 meters per second decline in gait speed increased the risk of earlier mortality in elderly people by 12 percent. But it’s difficult to keep close enough tabs to notice the decline. Exer is working with a lab at the University of Denver to compare its tech with similar products, with the hope that its ever-watchful eye will be used at senior living facilities.
Money raised: Private investment
This website application mines five types of data, including anything that can be found on an electronic health record, such as X-rays, lab tests, and prescriptions; whatever information your particular wearable can collect (it syncs with about 400 kinds of them); and socioeconomic status. HealthBook+ then lets its predictive analysis engine loose on the trove of information to let you know that, for example, your lifestyle could lead to cancer in 10 to 20 years.
In the future: HealthBook+ works directly with employers to provide information to your superiors about health trends. It doesn’t single people out, but instead it will eventually be able to provide a macro analysis of staff health concerns so that employers can, presumably, address habits that might lead to conditions like diabetes.
Money raised: $366 million
Too often, our grand plans for self-improvement wind up as towel racks (we’re looking at you, Peloton). Virta simply pesters its patients into continued progress. The Type 2 diabetes reversal app enlists a team of providers and health coaches who interact with clients two to four times a day on average, at least early in the process. This can look like users texting their personal health coaches, “Hey, I’m going out to dinner tonight. What can I eat?” or logging high or low blood sugar on remote monitors, which could prompt contact from a provider. Virta’s back-end technology is constantly triaging patients’ needs, ensuring providers and health coaches reach out to patients when they are needed most.
In the future: In 2023, Virta is hoping to become an offering provided by government health plans such as Medicare and Medicaid, which would give it access to underserved populations.
Despite a big idea, Cubby Beds largely had to find a way to pay for its own success.
There’s a saying in the startup scene: Hardware is hard, because making a physical product, as opposed to software, requires substantial upfront costs. Even successes, such as Fitbit and Peloton, seem to eventually stall. It’s no wonder, then, that Caleb Polley found it difficult to land early investment.
Polley’s big idea? Beds designed for children with special needs. In the United States, one in 44 kids have autism, and while there were companies making beds for them, Polley believed he could produce a better product, he says, “and wrap it in modern technology.” After rustling up $70,000 to $80,000 in venture capital, Polley had to piece together the rest of his startup costs—landing grants through the Colorado Office of Economic Development, for example, and winning the pitch competition at Denver Startup Week. He assembled prototypes in his Lakewood garage. After incorporating in 2017, Cubby Beds shipped its first product in 2020.
Today, the company’s beds help patients with 50 diagnoses, including epilepsy, cerebral palsy, and Down syndrome, though the most common is autism. The canopy provides security, while techy touches such as circadian rhythm lights and white noise speakers add or remove stimuli as necessary. Cubby experienced 400 percent year over year growth in 2022. In the future, Polley hopes to expand his product line to include beds for adults with dementia and similar conditions—and he says he can chase that pursuit without backseat investors looking over his shoulder. “Now, we’re more in control of our destiny,” he says, “and can do the right thing for our business instead of the right thing for our investors.”
The 1.2 Percent
GelSana Therapeutics’ Melissa Krebs on being the only woman in the room.
In the United States, companies started solely by women land about two percent of the total venture capital investment. Things are worse in Colorado: In 2021, female-only founders raised $91 million, about 1.2 percent of the state’s haul.
These numbers are not shocking to Melissa Krebs. In 2020, the associate professor of chemical and biological engineering launched GelSana Therapeutics, based on her research at Colorado School of Mines. The company produces a hydrogel whose polymer chemistry helps wounds heal faster by reducing inflammation; in the future, it will also be able to deliver topical medication that disperses gradually instead of all at once, reducing the number of times that, for instance, diabetic ulcer patients have to change their dressings.
Ahead of GelSana’s first products hitting pharmacy shelves this fall, we spoke with Krebs about what it’s like to be a woman who’s trying to get a revolutionary medicine to the market.
5280: Do you ever think of yourself as a female founder instead of just a founder?
Melissa Krebs: I do. I mean, some of these articles and statistics, they are so skewed that you can’t help but think about it.
You’re trying to recruit some VC funding right now. Has anyone told you that they have a problem with a female CEO?
I’ve never felt that in those conversations. It has nothing to do with the actual meetings that I’ve had.
In Colorado, biotech is the top category for female founders, in terms of VC investment. Is there a reason why that sector is more supportive of women?
That’s a good question. I’m an engineer, and even in academia if you look at the engineering disciplines, the bio realm is split 50-50 between women and men, but electrical is still predominately male. There’s something about being in the life sciences that seems to attract women, and I don’t know if anyone really knows why. I know I like it. I like the idea of being able to heal people.
Do you feel a responsibility to encourage other female founders?
Maybe not so much a sense of responsibility, because there’s only so much we can do, but being a role model is huge. When I go to business meetings, there are many times I’m literally the only female in the room. It’s even more skewed than academia. I’ve walked into these networking events, and I’m literally the only woman. It’s just so…apparent.
In these instances, do people treat you differently?
You never know what inherent biases people have, but I’ve never felt singled out. I feel a little self-conscious when I’m with a bunch of men, but they don’t really bat an eye. Maybe they don’t think about it as much, but I don’t know. It is wild.
Do you plan to remain CEO of GelSana long-term?
It’s a question that I wrestle with a lot. I’m an academic scientist, but even if I do carve out the time to be CEO, is it the right thing for the company to remain at the helm? At what point do I step aside for someone with more business experience? But all I’ve heard is that we’re still a small startup, and having passion for what we’re doing is the single most important thing. So, our board says, “Don’t even think about leaving right now.”
If you were to step aside, would you want a woman to succeed you?
I’ve never thought about that question. I feel like, for the sake of the company, I would be less focused on that and more on who’s the right person to take this thing to success. It’s like: Which battle am I going to fight that day?
That also seems like a question a man wouldn’t have to answer.
I 100 percent agree with that.
Confessions of a Shopaholic
Acquisitions don’t just make a startup bigger. They can also make it better.
How can you tell when a broken arm has mended? No, this isn’t a riddle: You X-ray the limb and if the fracture is gone then, well, you’re healed. A mentally ill brain, though, is a puzzle—one that SonderMind CEO and co-founder Mark Frank has been working to solve since he founded the company in 2014. The Denver health tech startup connects patients with therapists, and people seem to be happy with their matches: SonderMind became a unicorn in 2021 after a $150 million funding round, and today its therapists help clients in 15 states and Washington, D.C., through in-person and virtual visits.
But Frank knows that the company’s current way of measuring progress—via surveys—isn’t as impartial as an X-ray. “How do you take something like that and make it objective?” Frank asks. If you’re SonderMind, you buy companies that have already spent years researching the issue. Since 2021, Frank and his team have used some of their $183 million in venture capital funding to acquire two companies in the hope of more accurately diagnosing mental health disorders and providing more targeted, effective treatments. Here, Frank outlines how SonderMind’s recent purchases will eventually help the company rebuild a beautiful mind.
Acquired: October 2021
The formerly Virginia-based company trains its predictive analytics and machine learning technology on behavioral health, anticipating an ability to unlock secrets within patients’ data. Already, SonderMind has incorporated Qntfy into its intake process to make better matches with therapists: Patients are asked to fill out a questionnaire, which includes a text space. Natural language processing algorithms parse the answer looking for revelations. “Even if they say they are dealing with this, that, and the other,” Frank says, “there is this other thing in their free text that might be indicative of the issues they are dealing with.”
Acquired: November 2022
Price: $10 million
The founder of Total Brain spent two decades researching mental health assessment—basically figuring out ways to measure emotion, self-control, cognition, and feelings— which produced more than 100 peer-reviewed studies that SonderMind now owns and can incorporate into its own practice. Total Brain also built a library of digital-therapeutic treatments, such as brain games for cognition, neuro-tunes (think: nature sounds, white noise, and other relaxing music), and guided meditation tracks that expand SonderMind’s offerings beyond
Imagine a world in which (with your permission) SonderMind could access information from your Fitbit about how well you slept, essentially creating more data for Qntfy to mine. A therapist could see that your stress spikes on Tuesdays, when you have your weekly meeting with Mark—who sort of reminds you of your father—and prescribe meditation from Total Brain’s library to help you relax beforehand. Moreover, Qntfy could use Total Brain’s research to chart your mental health progress over time, objectively revealing the treatments that are effective and the ones that aren’t. It might not be an X-ray, but at least the road to behavioral health well-being would be slightly more transparent.
A Nice Little Saturday
Maybe the best way to appreciate the wave of health tech poised to transform our lives is to see Colorado startups at work on your weekend.
Wake up after a peaceful night’s sleep courtesy of Frenz ($490), made by Boulder-based Earable. An honoree for innovation at this year’s Consumer Electronics Show in Las Vegas, the halolike wearable uses sensors to measure how you’re snoozing (via brainwaves, heart rate, and even facial movements) and then responds to fitful slumber by lulling you with white noise, guided meditations, or nature sounds.
Feed the doggo some chow brewed by Bond Pet Foods. (Yes, we said “brewed.”) Also headquartered in Boulder, Bond deploys a similar process—with an added dash of biotechnology—to the one that breweries use to make IPAs, but instead ferments proteins that are almost identical to the ones in animal meat. Their process releases far fewer emissions into the atmosphere than typical meat production does.
Now feed yourself some breakfast courtesy of Meati, yet another Boulder startup, this one using mushroom roots to make whole-cut (à la steak and chicken cutlets, as opposed to ground meats) meat-free fare for humans. In January, the company opened a 100,000-square-foot facility, dubbed the Mega Ranch, in Thornton, which is capable of producing tens of millions of pounds of its meat substitutes, products that have already found their ways onto Sweetgreen and Birdcall menus.
Meet Grandma for a walk in Cheesman Park. Denver-based Nymbl Science has developed an app with the goal of preventing one million falls, a mark it’s expected to hit in 2024. Nymbl’s technology boosts balance in fall-prone older adults through dual tasking, in which users perform an exercise while playing a game on their phones or tablets to improve their reflexes. The process takes 10 minutes each day, and according to Nymbl, 78 percent of patients see an increase in balance and 45 percent report a boost to their independence.
Hit the gym. Once your workout is complete, slide a Recoup Fitness sleeve over your guns to kick-start recovery. The Denver startup offers cryogenic sleeves ($119) and thermal versions ($179) for your arms and legs that tighten around the appendage so you can go on with your day, minimizing soreness, and plans to roll out a new ankle sleeve later this year.
Relax. Two days isn’t nearly enough time to reset your stress levels, so why not take advantage of some calm-inducing spectacles? Lafayette-based Sana Health makes headgear that uses flashing lights and varying tones to reset the balance between your left and right brains, helping you recover from mental fatigue quicker. The company is conducting clinical trials to certify its effectiveness in treating everything from anxiety to fibromyalgia to PTSD. In the meantime, enjoy your newfound cerebral feng shui.
Check your dinner plans with Bitewell. The company, which moved to RiNo in 2022, works through employers to provide workers with a platform that stamps a FoodHealth score (akin to a credit score) on chow you’re thinking about scarfing. Bitewell also links directly to 85 percent of the supermarkets and restaurants in America, so you can order takeout or groceries directly through the app.