Medify, Incubated at Voyager Capital, Raises $1.3M to Reshape Health IT for Consumers

It’s not quite two guys in a garage getting their big break, but it’s close. Medify, a healthcare IT startup incubated at Seattle-based Voyager Capital, said today it has raised $1.3 million in first-round venture funding. Voyager put in $1 million, and the rest was from angel investors and the founders. The stealth company is led by Derek Streat, former vice president, and Jay Bartot, former vice president of Farecast (now part of Microsoft’s Bing).

Medify bills itself as “data-driven care management” for consumers. It’s too early to get into many specifics about the company’s technology, but let’s just say it is off to a pretty compelling start. Streat, the business guy, and Bartot, the technical lead, have been working on the company since late last year when Bartot left Microsoft. He had previously co-founded Netbot and AdRelevance before working on the travel site Farecast (from the early days through its $115 million acquisition by Microsoft in 2008). Streat, for his part, began his career as an investment banker, joined in its early days, and co-founded AdReady, before getting into social technology entrepreneurship.

Streat met Bartot while working on Unitus New Ventures, a social innovation vehicle for companies in developing countries, which he helped start in 2008. The two connected over “understanding data-oriented businesses, and how to build community around those things and extract value for those things for consumers,” Streat says.

In 2009, tragedy struck when Streat’s two-year-old daughter was diagnosed with glomerular nephritis, a life-threatening kidney disease. Streat and his wife put in hundreds if not thousands of research hours, trying to understand the disease and how to manage their daughter’s care. “It’s a mountain we’ll be climbing for the rest of our lives, at least until the technology changes,” he says. “This is hands down the most complicated, information intensive, and most important project of our lives.”

That was the impetus for Streat to start building Medify. The idea is to provide online software tools to families so they can gain control over illnesses and health issues in an efficient way—whether it’s caring for their children, say, or their aging parents. The basic idea, as I understand it, is to put all the tools in one place, so a family member can go online, access the medical literature and other information about a particular ailment, connect it to their loved one’s medical history and condition, and also connect with family, friends, and others across a support network. That sure beats doing endless Google searches and joining separate health and wellness social networks (of which there are plenty).

Medify is interesting because it will play in a consumer niche that connects across many other types of health IT systems, from media and content sites like WebMD to medical record systems like Microsoft HealthVault to community sites such as PatientsLikeMe. But Medify seems to have a very mainstream product—or it will, come sometime in 2011—that almost everyone can relate to. Probably the closest thing to what the startup is building for consumers exists only in some progressive hospitals that are using evidence-based medicine to inform patient care plans, Streat says.

The data that Medify is using comes from the public Web and literature, but also from “black boxes” locked inside institutions like hospitals and insurance companies. So building relationships with key partners will be crucial to the company’s success. In any case, the technical side of the data mining—making sense of lots of data—seems to be in good hands with Bartot, who has worked with plenty of challenging data from the airline industry and advertisers in his vast experience.

This time, though, the motivation is more serious. “As much as we think the products we build are novel, a lot of times it’s hard to convince consumers about the next whiz-bangy thing—‘you should use it, it’ll save you money,’” Bartot says. But in Medify’s case, it’s about life and death.

As far as Voyager is concerned, the venture firm has been working closely with proven entrepreneurs at an earlier stage than ever before. It incubated mobile software firm Ground Truth last year, and worked with Andy Sack to help build RevenueLoan earlier this year. Streat, for his part, has known Voyager co-founder Bill McAleer for some 15 years. The fit was a natural one, because Streat was looking for a venture firm that could provide contacts and a deep network in health IT, and he says Voyager had it. Rob Coppedge from Faultline Ventures and Voyager’s McAleer and Erik Benson (who is on the board of Hillsboro, OR-based Kryptiq) have been instrumental in connecting Medify to health IT leaders and validating the market, Streat says.

The next step is to build out the software and continue testing the market. The plan is to release the Medify product in beta form early next year, with some “mini-apps” appearing before that, Streat says. He emphasizes that what’s missing in healthcare today is how to “connect a small slice of your personal health information to the vast repository of knowledge,” and do it “in a way that’s intelligent.”

McAleer, for his part, was impressed by the founders’ “mixture of consumer and analytics background,” he says. “We’ve been looking at health IT as an area because there are some interesting sea changes in how care is being looked at…A lot of people are having personal issues around their parents’ aging. How do you track their care, understand whatever the condition is, and how do you communicate with people in the family?”

It won’t be easy, but if Medify succeeds, it will help solve a huge societal problem. One question is where exactly in the medical ecosystem the company will start with its patients. Another question is what particular types of conditions and ailments it will start tackling; it sounds like the company will focus on certain critical conditions first, and then transition to more general healthcare. Either way, it’s all about democratizing medical information for the masses. “There’s a lot more data available than people are aware of,” McAleer says.

Gregory T. Huang is Xconomy's Editor in chief. E-mail him at gthuang [at] Follow @gthuang

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