Censinet Takes Off With $7.8M to Track Cyber Risks in Healthcare
Censinet, a Boston startup helping hospitals and other healthcare providers manage the cyber risk of their hundreds of third-party vendors, has launched its system and announced $7.8 million in funding to double its headcount in a year, further develop its platform, and market its software.
The Series A funding round is led by Boston-based HLM Venture Partners and the Cedars-Sinai Health System in Los Angeles. Vin Fabiani, partner at HLM Venture Partners, is joining the company’s board.
Hospitals have become one of the top targets for cyberattacks. Ransomware attacks threaten to lock up systems that need 100 percent uptime for patient health or hospital operation. The average cost to a healthcare organization of a successful cyberattack is $1.4 million, according to a recent report from cybersecurity services company Radware.
Healthcare is also seen as being behind the curve in cybersecurity preparations, often making the industry appear as an easy target. A 2018 paper in the Journal of Medical Internet Research quoted one unnamed healthcare executive admitting as much: “I would aim at a hospital. Healthcare is typically five years behind the power curve. Why not go for soft targets?”
Ed Gaudet, Censinet’s founder and CEO, says the way hospitals have been keeping track of the risks associated with everything from electronic health records to medical device systems and cloud-based IT systems is “fundamentally broken.”
Gaudet left Lexington, MA-based IT security company Imprivata after it was bought by private equity firm Thomas Bravo. He sat down with a handful of healthcare executives and was astonished to find that, most often, hospitals were tracking the risks on the hundreds of hardware and software vendors by emailing and calling the vendors, one-by-one, and tracking it all on spreadsheets.
“What’s happened over the last 10 years or so is healthcare went from a largely paper-based industry to moving everything electronic onto health records, then doubling down on medical device and IoT devices connected to the internet, exponentially increasingly the risk,” he says. “If you’re talking to hospitals, there’s very few who know who all their vendors are.”
Gaudet founded Censinet in September 2017 and built a platform that makes it easy for healthcare providers to submit questionnaires to vendors to get the exact info they need to manage high-risk systems. The platform also makes it easier for vendors to respond to inquiries.
The Censinet platform is being used at Partners Healthcare, Bay State Health, Intermountain Healthcare, and Cedar-Sinai, Gaudet says. And while it’s designed for healthcare, the system can also be used by biotech and pharmaceutical companies.
Darren Dworkin, chief information officer at Cedars-Sinai Health System, said in a press release that “third-party risk management is inefficient and a costly process for the healthcare industry at a time when resources are especially scarce.”
Censinet and about 30 employees are currently based on Arch Street in Boston, but Gaudet says he is looking for new office space to fit what he expects to be a much larger company a year from now after it doubles its headcount.
The startup’s seed investors, Schooner Capital, LRVHealth, and Excelerate Health Ventures, also joined in the Series A. Censinet previously raised $2 million in 2017 and another $500,000 in 2018, according to SEC filings.