LifeImage Raising $2M-Plus in Oversubscribed Round, CEO Says
LifeImage has advanced quickly since forming late last year. There are at least several hospitals or hospital systems using the startup’s software, which enables physicians to share digital radiology images within their facilities and with doctors at outside clinics via the Internet. And the Newton, MA-based firm expects to secure more than $2.1 million in its second round of financing next week, LifeImage CEO Hamid Tabatabaie tells Xconomy.
Long River Ventures, which has offices in western Massachusetts, is one of two new investors in LifeImage’s Series A1 round, Tabatabaie says. The second new investor asked to not be named. The startup is also banking investments from its previous backers, which include Partners Innovation Fund and Massachusetts Technology Development Corporation, both of Boston, and others. Tabatabaie says that in this latest round—which builds on $2.7 million in initial funding that LifeImage raised this spring—was first expected to total $2 million but will be more than that sum due to demand from investors for more of a stake in the privately held firm.
There are good reasons for this demand. Tabatabaie said that more radiologists than he expected have decided to adopt the firm’s technology in recent months, and he predicts that a dozen hospitals will have signed on to use the enterprise version of the software by the end of the year. Some of the first organizations to begin using the software include Continuum Health Partners in New York, Montefiore Medical Center, in Bronx, NY, and Boston’s Massachusetts General Hospital, where some of the technology was originally developed. While initially focused on the hospital market, LifeImage plans to begin rolling out products for the consumer market early next year, the CEO says.
“I’ve built five healthcare IT companies,” says Tabatabaie, who was previously CEO of Boston-based radiology imaging software firm Amicas (NASDAQ:AMCS), “and I’ve never had anything like this [rate of adoption] before.”
What has caught many peoples’ attention about LifeImage’s software is that it has advanced the sharing and storage of digital medical images into the age of cloud computing. The software enables doctors and patients to store medical images in accounts hosted by secured third-party computer servers, which are owned and managed by Hopkinton, MA-based storage giant EMC (NYSE:EMC). Those images can then be shared and viewed by any doctor with a Web browser and Adobe Flash, as long as the person who controls the cloud-based account has given the doctor permission to access them.
Adoption of the firm’s software is also being driven by macro-trends in healthcare. A fortune in wasteful spending can be saved if, say, a doctor can view the results of a patient’s medical scan on an electronic record from a separate facility rather than ordering new tests to be performed on the patient to get that same information. This is part of the reason the U.S. government has earmarked $36 billion to build out an infrastructure for electronic medical records for the country over the next several years.
LifeImage is targeting the billions of dollars spent in the U.S. on repeat medical images, specifically those that are performed because the physician who is ordering them can’t get her hands on the originals. Hospitals have been storing digital medical images on computer servers for more than a decade, yet if a patient wants a copy for their records or to share with other doctors they are typically given the images on a compact disk. These disks sometimes get damaged, and sharing them securely with other physicians can be cumbersome.
The company isn’t the only outfit working on technology for sharing medical images. For example, computing giant IBM (NYSE:IBM) and Brigham and Women’s Hospital in Boston are developing what is called the Radiology Theatre, an online venue where doctors can simultaneously view CT, MRIs, and other medical scans. Also, San Francisco-based healthcare services powerhouse McKesson (NYSE:MCK) has Web-based software that enables physicians to share radiology images and other medical data with their colleges.
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