Spruce Nabs $15M Series A to Connect Dermatologists and Patients

Xconomy San Francisco — 

Startups have been trying to digitize real world businesses for years in an attempt to make the experience easier, more cost effective, and efficient. Spruce, a company with an app that acts as a digital doctor’s office, has closed a $15 million Series A round to do just that for diagnosing and treating dermatological conditions.

The financing came from founding CEO Ray Bradford’s former employer, Kleiner Perkins Caufield & Byers, as well as Baseline Ventures and Cowboy Ventures, all of whom provided the company’s seed financing. Google Ventures is a new investor in the Series A funding, which will be used for new hires and to add a host of conditions to the app’s capabilities. It previously was used only to treat acne.

Spruce charges patients seeking dermatologists $40 for a consultation, a quick diagnosis and treatment, and 30 days to access in-app resources, such as doctor-approved medical materials about the condition and a messaging tool to communicate with the physician. The San Francisco-based company, which announced the funding today, plans to treat conditions including skin discoloration, psoriasis, bug bites, and stings, among others.

“It’s not just a quick transactional communication with the doctor, and then you’re done. You’re able to have this experience all the way through the treatment plan,” said Bradford, who founded the company in 2013. “For each of these conditions, a whole network of doctors are developing the clinical frame work according to evidence-based guidelines. It’s not one-size-fits-all.”

Spruce users follow the same basic process as they would in person, at a clinic. They can pick one of the various dermatologists who have joined Spruce to provide digital care. A patient answers a stream of questions about her health history and the condition she is experiencing, which the app develops based on previous answers through machine learning. In the case of a patient with acne, she would take three photos of the condition to help the physician create a diagnosis, and submit her case.

The physician, who Bradford said receives an undisclosed majority of the $40 fee, will respond to the patient within 24 hours with a diagnosis, a treatment plan the patient can access, a prescription, and a plan for how the patient should use the prescription. All of that, including answers to frequently asked questions that board-certified dermatologists have approved, is available to the patient for 30 days.

A patient can ask questions to the physician or a Spruce “care coordinator” in the app. If they want to receive another full consultation or do a follow up at the end of the 30 days, it’s another $40, Bradford said.

The comprehensive care, including the photographs that the patient takes, is key to the business differentiating itself, Bradford said. A wide swath of startups have jumped into digital health, a rather amorphous field of healthcare that includes other physician-to-patient communication companies, from SmartLink in Cary, NC, to eRelevance in Austin, TX.

Rock Health, a seed fund based in San Francisco that provides financing nationally, has led the way in helping these companies grow. The implicit value of digital health companies has been a topic of much discussion, and has led to the creation of companies such as GE- and Rock Health-backed Evidation Health, which is trying to quantify and validate the savings that digital health tools provide their customers.

For Spruce, the answer is about simplifying the process, as well as saving time and money, Bradford said. Spruce helps consumers who pay for their own healthcare with a low-cost doctor visit, and it provides many physicians with a secondary income, without the same overhead costs as a clinic. Plus, the prevalence of smart phones with cameras makes diagnosing a condition remotely easy, he said.

“The camera really is the most important diagnostic for a vast majority of these (dermatological) conditions,” said Bradford, who was an early stage venture partner at Kleiner.

Spruce physicians are not yet treating issues such as growths, spots, and moles, which typically necessitate an in-person visit because of the level of detailed required for diagnosis, Bradford said. If a physician has concerns about his or her ability to treat a condition, or if a problem is severe enough, the app allows them to tell a patient they should see a doctor in person, he said.

Video chatting is not currently a part of the Spruce app, Bradford said. The company is considering how it might treat other conditions outside of dermatology, and will decide whether video conferencing could be incorporated eventually, he said.

“We think we’re providing the mass market experience for (telemedicine),” Bradford said. “If you look ten years out, you’ll have more conditions that can be treated remotely, and you’ll have more innovation.”