AltusCampus Closing on $800K Seed Round, Eyes Larger Series A in 2016
AltusCampus aims to change how businesses manage the continuing medical education (CME) required of healthcare professionals and the Madison, WI-based software company will wrap up a $800,000 seed round to jumpstart its efforts Nov. 1. But CEO Daniel Guerra, Jr., has his sights set on bigger goals and as the company gains traction, he says a larger Series A round is not too far away.
Investors in the seed round include Wisconsin startup accelerator Gener8tor, which AltusCampus graduated from in May; the BrightStar Wisconsin Foundation; Oshkosh, WI-based Angels on the Water; and investment groups from California and Minnesota, who Guerra says provided about half of the amount raised.
Founded in 2013, AltusCampus has developed an online platform healthcare organizations can use to track employees’ educational requirements to ensure they’re in compliance with accrediting agencies like The Joint Commission.
About 16 million healthcare professionals must keep current on the latest trends in their fields, such as how to safely operate a magnetic resonance imaging (MRI) machine. CME requirements vary by state and materials must be approved by the Accreditation Council for Continuing Medical Education
Guerra says AltusCampus strives to be the Netflix (NASDAQ: NFLX) for CME by putting users in control and making content available wherever, whenever.
Today, about 70 percent of classes are taught in person, says Guerra. He says the $20 billion CME industry’s move to the Web has been slow, in part because healthcare organizations “see live events as helping to build professional camaraderie.”
But, he says, “the economics suggest that [CME] has to go online.”
Healthcare systems that bring in speakers to give talks on-site represent one form of competition, says Guerra. And then there are companies who offer online CME courses, like Toronto-based Medlantis and New York-based Medscape, WebMD’s site for healthcare professionals.
While those firms target individual healthcare professionals, Guerra says AltusCampus adds more value implemented across an entire organization. The platform’s tracking tools save hospitals and clinics from having to come up with systems themselves.
AltusCampus licenses and distributes educational content but does not produce it. It pays organizations such as the Springville, AL-based International Institute for Continuing Medical Education (IICME) for educational materials. Previews of some IICME-produced courses are available for free on YouTube—“Ultrasound in Staging Cancer,” for example—but full versions cost money.
Pharmaceutical companies and medical device makers are a major part of producing and underwriting CME. They provide the majority of CME funding, according to a 2009 paper by Lewis Morris and Julie Taitsman published in the New England Journal of Medicine, and “indirectly influence its content.”
Federal legislators have worked to change that. The 2010 Physician Payments Sunshine Act, which was drafted to bring more transparency to pharma company payments to providers, was recently amended to require drug and device manufacturers to report any fees paid to physicians for speaking at CME events.
There have long been suspicions of quid pro quo arrangements where pharma companies produce educational content and pay—or overpay—high-prescribing doctors to deliver it.
Guerra says drug and device makers are prohibited from delivering CME directly to physicians, ensuring the need for a layer between content producers and consumers. AltusCampus seeks to occupy that space.
Among the company’s customers is Hospital Corporation of America, a large hospital chain based in Nashville, TN. It also sells to medical device manufacturers such as Waukesha, WI-based GE Healthcare.
AltusCampus charges subscribing organizations based on the number of workers who take courses. Smaller clients, which must have at least five users to sign up, typically pay an annual fee of $99 per user. Groups with hundreds or thousands of users may receive discounts, says Guerra. Individuals must buy courses a la carte, he says.
Guerra expects 2015 revenue to be between $600,000 and $900,000; monthly recurring revenue could reach $100,000 by next June.
AltusCampus will likely be raising more money at that time. Guerra is targeting between $3 million and $5 million in the Series A round, which he expects some of the seed investors to join.
Guerra says AltusCampus will apply the seed funding toward hiring—the company currently has 14 employees, with four more joining next week—as well as “marketing efforts and strategic investments in content.”