Medify Acquired by Alliance Health Networks, Will Continue to Grow

Seattle startup Medify unveiled its medical-research service last year, aiming to give patients a window into the latest and best knowledge as they navigate the medical system.

The 10-person team will continue that work, but as part of a larger company following an acquisition by Alliance Health Networks, a Salt Lake City-based operator of health-focused social networking sites.

The two private companies refused to disclose the terms of the deal, but it sounds like a cash-and-stock transaction. Medify had raised $1.8 million from Voyager Capital and angels, and had been incubated at Voyager’s Seattle offices.

“We are a venture-backed company. When you’re that kind of company, you try not to sell too early,” Medify CEO and co-founder Derek Streat tells me. “So we only did this deal because we know that it’s a good deal. It’s a deal where all the investors make some money, plus have an opportunity to continue to share in the growth of Alliance as well.”

Streat was inspired to start Medify after his young daughter was diagnosed with a serious kidney disorder. 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.

Medify tackles that same problem by mining the data contained in mountains of medical research, culling those studies for useful top-line indicators—what kind of drug or treatment was used, how effective it was, the number of patients in the study, and more. Patients can search through the data to find useful trends, dive deep into the results, and display them in custom data visualizations.

Medify had only been in a public beta version since last August, but apparently had the beginnings of a product and the technical chops that made Alliance Health Networks sit up and take notice. Alliance operates a group of 50 social networking sites, each revolving around a specific health condition—the first and biggest was dedicated to diabetes patients, giving them a place to discuss treatments and other issues. Alliance says its sites now have about 1.5 million members.

Alliance has raised at least $14 million in venture financing in its lifespan, including an $11 million round last summer. It plans on keeping Medify available as a standalone service, and all of the employees are joining Alliance as its new Seattle office, where they’ll also work on new data-mining and analysis projects for the combined company.

There could be some really interesting insights in that work. Streat and Medify co-founder Jay Bartot see a lot of possibilities in analyzing the unstructured data generated by active communities of patients on Alliance’s social sites, along with additional structured sets of data, such as insurance claims. That could yield all sorts of information that would be valuable to medical companies seeking to market medicines and devices to patients when they really need them.

Streat says that could help solve what he sees as a lingering “black box” approach to some elements of healthcare, where patients don’t know exactly what to ask for or whether a treatment is the right thing for them.

“The best way to think of what we’re doing at Medify and Alliance is, you’ve got a significant health situation to deal with, for you or your family. What do you want to know?” Streat says. “Well, I want to know what guys at Stanford think, I want to know what other patients think, and I want to know what doctors are prescribing. I want to know the facts.”



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