BetterHelp owes customers $7.8M after FTC alleges data mishandling

The Federal Trade Commission (FTC) is requiring online therapy company BetterHelp to pay $7.8 million to consumers in a settlement over alleged data mishandling between 2017 and 2020. This marks the first proposed FTC order that would compensate consumers whose health data was compromised.

According to the FTC, BetterHelp assured customers that it would not share their health data except for the purpose of providing counseling. But the FTC alleged that BetterHelp shared customer emails, IP addresses and health questionnaire responses with advertisers like Facebook, Snapchat and Pinterest.

“The FTC alleged we used limited, encrypted information to optimize the effectiveness of our advertising campaigns so we could deliver more relevant ads and reach people who may be interested in our services,” BetterHelp wrote in a statement. “This industry-standard practice is routinely used by some of the largest health providers, health systems, and healthcare brands.”

Customers who used BetterHelp between August 1, 2017 and December 31, 2020, when these advertising practices were in effect, will be eligible for partial refunds.

“When a person struggling with mental health issues reaches out for help, they do so in a moment of vulnerability and with an expectation that professional counseling services will protect their privacy,” said Samuel Levine, director of the FTC’s Bureau of Consumer Protection, in a statement. “Instead, BetterHelp betrayed consumers’ most personal health information for profit.”

BetterHelp said it has never received payment from any third parties for information about its customers.

The FTC’s proposed order also requires BetterHelp to limit how long it can retain customer data and ask third parties to delete consumer health data that they shared. BetterHelp is also ordered to obtain express consent before disclosing customer health information to third parties, and to develop a more comprehensive privacy program.

“This settlement, which is no admission of wrongdoing, allows us to continue to focus on our mission to help millions of people around the world get access to quality therapy,” BetterHelp wrote in its statement.

 

BetterHelp owes customers $7.8M after FTC alleges data mishandling by Amanda Silberling originally published on TechCrunch

Southeast Asia health tech platform Speedoc raises $28M

Speedoc, a health tech platform that brings hospital care to homes, has raised $28 million in pre-Series B funding. The round included Bertelsmann Investments, Shinhan Venture Investment and Mars Growth. Returning investor Vertex Ventures Southeast Asia and India, which led Speedoc’s $5 million Series A in 2020, also participated.

Based in Singapore, Speedoc was founded in 2017 by Dr. Shravan Verma and Serene Cai. Its services include telemedicine consultations, on-site doctor and nurse visits, virtual hospital wards and ambulance hailing. Speedoc is available in a total of nine cities, including eight in Malaysia.

Dr. Verma told TechCrunch that he became interested in creating an app for on-demand medical services while he was a doctor in an emergency department, and saw how many patients had to wait hours for minor conditions. Cai, meanwhile, wanted to create an easier way for people to get medical help, especially in underserved communities, while her family was caring for her grandmother, who had severe dementia.

Speedoc is currently participating in the Ministry of Health Office for Healthcare Transformation’s Mobile Inpatient Care@Home initiative, and its hospital partners include National University Health System (NUHS), the Singapore General Hospital (SGH) and Khoo Teck Puat Hospital. As part of the program, Speedoc plans to expand its virtual hospital program, which includes a 24/7 patient care team.

H-Ward is one of the main ways Speedoc differentiates from other telemedicine platforms, Dr. Verma said, because it standardizes services like telemedicine, remote monitoring and home-based doctors and nurses for continuous care. Patients are able to receive frequent medical reviews, 24/7 nursing, intravenous therapies, blood tests and in-person visits.

“Research and survey findings have shown that given the same medical care and treatment, patients could recover faster at home,” Dr. Sherma said. “We have also been encouraged by our patients advocating for home-based care, and preferences to be admitted at home. Most importantly, on the impact on the healthcare landscape, the thrust towards virtual hospitals will ensure more optimal utilization rates, and more capacity for medical personnel to attend to life-threatening conditions.”

Speedoc will use its new funding to expand in Southeast Asia, especially in cities where there is a shortage of healthcare professionals.

In a statement about the funding, Shinhan Venture Investment (Global Investment) director Jinsoo Lee said, “Healthcare provision and delivery in Southeast Asia is poised for tremendous change in the next decade. We believe the healthcare model Speedoc champions will see greater adoption in meeting the healthcare gap in the region.”

Southeast Asia health tech platform Speedoc raises $28M by Catherine Shu originally published on TechCrunch

Trans founders to VCs: ‘Cut me a check’

There is no data to show how little venture funding goes to trans founders.

All that exists is a report from Backstage Capital saying 1% of all venture funds went to founders openly identifying as LGBTQ+. (According to a recent Gallup poll, 7.1% of Americans identify as LGBT+.)

That’s a staggeringly low amount of funding, although not surprising when considering how homophobia and transphobia could easily slip in and prevent investors from giving money to those they don’t support or understand.

“Investors would be so hamstrung by the complexities of this patient population that we wouldn’t even be able to pitch our product.” Kate Anthony, founder, Euphoria

Kate Anthony, the founder of the app Euphoria, which connects individuals to gender-affirming healthcare resources, said her fundraising journey was awful and “really difficult.” Investors didn’t understand how big the trans population was or why her company was needed. She also faced a lot of bias.

“There’s a 50-50 chance when I speak to someone they don’t want to see someone like me existing,” she said.

“It was a game of immense trial and error,” she said, adding that she pitched 272 investors and got 12 on Euphoria’s pre-seed cap table. She wants to raise an official seed round, though she is hesitant given the economic climate, not to mention the bias she will likely continue to face as a trans founder. “It’s just depressing and demoralizing.”

TechCrunch conducted an investigation into current market sentiment — what we like to call a “vibe check” — to see what it is like for trans founders looking for venture capital money, specifically when their product targets the trans community. Many said investors often distrust their product’s market potential, while others described an emotional process of outing themselves in every meeting to people who may or may not support their existence.

Trans founders to VCs: ‘Cut me a check’

There is no data to show how little venture funding goes to trans founders.

All that exists is a report from Backstage Capital saying 1% of all venture funds went to founders openly identifying as LGBTQ+. (According to a recent Gallup poll, 7.1% of Americans identify as LGBT+.)

That’s a staggeringly low amount of funding, although not surprising when considering how homophobia and transphobia could easily slip in and prevent investors from giving money to those they don’t support or understand.

“Investors would be so hamstrung by the complexities of this patient population that we wouldn’t even be able to pitch our product.” Kate Anthony, founder, Euphoria

Kate Anthony, the founder of the app Euphoria, which connects individuals to gender-affirming healthcare resources, said her fundraising journey was awful and “really difficult.” Investors didn’t understand how big the trans population was or why her company was needed. She also faced a lot of bias.

“There’s a 50-50 chance when I speak to someone they don’t want to see someone like me existing,” she said.

“It was a game of immense trial and error,” she said, adding that she pitched 272 investors and got 12 on Euphoria’s pre-seed cap table. She wants to raise an official seed round, though she is hesitant given the economic climate, not to mention the bias she will likely continue to face as a trans founder. “It’s just depressing and demoralizing.”

TechCrunch conducted an investigation into current market sentiment — what we like to call a “vibe check” — to see what it is like for trans founders looking for venture capital money, specifically when their product targets the trans community. Many said investors often distrust their product’s market potential, while others described an emotional process of outing themselves in every meeting to people who may or may not support their existence.

How gender-affirming health care startups are navigating legal miasma

Kate Anthony started in the Lone Star State.

It was there, in 2019, that she launched her app Euphoria, seeking to provide information and resources on gender-affirming care. She knew the stakes were going to be high, and as the state passed anti-trans legislation, she and her company were forced to flee.

Settling in Denver, Anthony made a plan on what to do next. She decided to maintain business as usual while the fight for trans rights continues. She’s not alone in that decision. Many apps, if not all, that service the trans community are hyperexposed, under fire and seemingly undeterred.

TechCrunch conducted a vibe check to see how trans entrepreneurs servicing their communities are navigating this moment. The Human Rights Campaign told TechCrunch that legislators in state houses have introduced 344 anti-LGBTQ+ bills this session, with more than 140 specifically targeting the trans community.

“We will not allow these anti-trans people to bully us into giving information.” Aydian Dowling, founder, Trace

These proposed restrictions range from an Alabama bill that seeks to deny medical care for transitions to Iowa and Alaska bans on trans students participating in sports. Louisiana introduced a bill to bar medical professionals from offering minors translation-related care, and Florida now prohibits gender-affirming care under Medicaid.

Anthony said it’s inevitable that her company will one day be sued by someone or some state. Other founders said they are watching the court systems closely, with some rethinking strategies regarding consumer privacy and employee benefits. And for the startup and venture community, support is better late than never — it’s a critical time to defend trans founders.

How a Romanian MedTech startup helped US doctors treat refugee Ukrainian cancer patients

An innovative new medical startup in Romania helped doctors from three countries collaborate to treat Ukrainian cancer patients made refugees after Russia’s brutal invasion.

The “Tumor Board” project was initiated by doctors from the US, Romania and Moldova to provide life saving treatments for displaced Ukrainians with cancer.

A collaboration of Heal 21 Association and Blue Heron Foundation, the Board used a platform provided by Romanian startup Medicai to connect doctors, share medical files, and provide a platform to discuss treatment plans, as well as allow the patients to track their own progress.

Starting in April, imaging of the cancer patients from Ukraine was uploaded (those who had it) and the new imaging from Moldava were translated from Ukrainian to Romanian/English, and reports were prepared for each patient.

Medicai, which has raised €1.2M in venture funding to date, says its web based HIPAA-compliant platform hopes to become a sort of “Miro for health”, allowing healthcare professionals to collaborate over patient documents and records.

The problem Medicai is solving sounds familiar. For example, to this day, patients go into a $1 million MRI machine and – generally speaking – walk out with a CD disk with an image of their knee or some other part of their body. It’s just one example of how data can be siloed and how patients are usually locked into large, centralized systems. This means medical professionals can’t easily collaborate with specialists outside of their hospitals.

Established corporates selling these centralized systems include BoxDICOM, Ambra Health and amongst the startups there is EnvoyAI and Collective Minds Radiology (raised $6.7M), among others.

Medicai founder Mircea Popa’s journey in healthcare started in 2011 when, with a friend of his, he co-founded a company that is now called SkinVision, a skin cancer screening app that detects melanoma (skin cancer) through ML algorithms applied on images taken with smartphones. SkinVision reached 1.2 million downloads and raised a total of $15 million in total. Medicai Co-founder Alexandru Artimon (CTO) previously co-founded software company Atta Systems.

Popa told me via email: “One lesson we’ve learned lately about healthcare is that we desperately need flexibility. With the Tumor Board project we’ve shown that Medicai can set up infrastructure in a matter of days to provide access to expertise across 2 continents: US & Canada to Romania and Moldavia – and this was done in less than ideal conditions.”

“Through the Tumor Board project we were able to touch the lives of oncological patients that would have had no other option in seeking treatment and we’re really proud to be a part of that,” he added.

So far Medicai says it has reached 29 paying clinics/hospitals, with 2,434 doctors accounts and 1400 patients accounts. It’s also claimed a strategic partnership with Microsoft and pharmaceutical companies.

Investors to date include D Moonshots, Cleverage Venture Capital, Roca X and Gapminder VC.

Meanwhile the Tumor Board project continues. If there are the predicted four million Ukrainian refugees arriving in the coming months, there could be between 13,000 and 16,000 new patients with cancer per month arriving in countries bordering Ukraine.

African healthtech startups in the supply chain segment show rapid growth, spurring a $7M investment initiative

While Africa’s health systems are still reeling from the effects of the COVID pandemic, the adoption of digital health services has been revved in some countries. Telemedicine, the standout offering, witnessed massive adoption during the pandemic, and in the last five years, no other service has been launched more by healthtech startups.

However, a particular segment has achieved scale faster within the past year. These startups digitize the supply chain and distribution to providers. And according to a new report from Salient Advisory, a global healthcare consulting firm, this is the segment where the most impressive growth has occurred for Africa’s healthcare in the last 12 months.

Companies in this segment work with community pharmacies and lower-end providers such as drug shops to help stock products. Some include mPharma, Lifestores, Shelf Life, and Maisha Meds.

“The fastest traction we’re seeing are those helping the providers–those who interface with the customer like pharmacies, clinics, and hospitals–to digitize distribution to the consumer. That’s where the greatest traction has happened,” said Remi Adeseun, the director, Africa at Salient Advisory, to TechCrunch in an interview.

Salient surveyed over 80 companies across Ghana, Kenya, Nigeria, and Uganda, 25% more than the number it tracked in its last report in 2021.

The models of these B2B companies mirror their retail e-commerce counterparts such as Wasoko and TradeDepot, as they use tech-enabled solutions to digitize medicine distribution to underserved pharmacies, drug shops, clinics, and hospitals.

As such, their growth has been rapid, Salient says. Lifestores, for instance, increased its outlets from 85 to 600 in Nigeria; Maisha Meds grew from 400 to 900 outlets across Kenya and Nigeria; Shelf Life has over 1,630 outlets in Kenya and Nigeria, up from 400 the year before.

The report says 36% of all-time funding reported by the health supply chain startups it profiled was raised in the last 12 months. However, the segment is yet to record the type of investments that have poured into B2B retail e-commerce in the previous two years.

For instance, medium-to-large scale players like MarketForce and Wasoko have raised between $40-$130 million in single rounds (some including debt). And save from mPharma, which has a network of Mutti pharmacies and recently raised $35 million to build out its telehealth and e-commerce offerings, funding has been few and far between for B2B distribution healthtech startups.

“Companies like Wasoko and other companies in B2B e commerce involved in FMCG are raising larger sums. But the point we’re making within the context of healthtech and within the smaller context of our research is that these B2B companies are growing the fastest. Over the last four months, they also raised the larger sums of money,” says Yomi Kazeem, senior consultant for West Africa at Salient Advisory. “And of course, funding in health tech is generally low. So we wouldn’t expect them to be raising large sums just yet. But there’s every possibility that as they grow, that might change.”

One way Adeseun reckons that might happen is if B2B e-commerce platforms in retail take an interest in pharmaceutical and health-based products. But he contends that since most of these startups haven’t scratched the surface of a vast FMCG space, it’ll take a long while before they invest in B2B medicine distribution.

Adeseun also cited two events that could push more funding into this segment. “We think one of the things that will also drive investor interest is when the scale matches the kind of appetite they have. Many startups operate in single or two countries, so expanding geographic footprints will be an enabler to draw in better funding.” The second is clearer and forward-thinking regulations.

But Salient notes in its report that regulatory frameworks governing this space, especially e-pharmacy activities, have evolved since last year. Online pharmacy regulations have been launched in Nigeria and Ghana and are in development in Kenya and Uganda. The report says all regulations currently require online pharmacies to have a licensed physical location under the control of a licensed pharmacist.

“Uniquely, Ghana is going beyond enacting online pharmacy regulations to embark on broader digital transformation of pharmaceutical care, through a government-run, centralized e-pharmacy platform to house all online pharmacy transactions across the country,” its authors wrote.

“This could transform the availability of product data and confer end-to-end visibility for product movement in the online pharmacy space. Once fully established, the platform’s scope could be expanded to include health products currently being distributed through offline models and serve as a model for similar initiatives beyond Ghana.”

The research found that while many startups, retail pharmacies, and e-commerce players such as Jumia and Copia remain active in digitizing distribution, customers ordering over-the-counter products from their online channels appeared small.

On competition between these platforms, Adeseun said a few of these chain pharmacy incumbents, such as MedPlus and HealthPlus, are taking on a digital strategy by adding telemedicine capabilities, thus responding to the innovation that startups introduced. However, a direct path to multi-national telemedicine scale through these chains is not clear, the report contended.

Regarding how they influence their market, 94% of companies surveyed claimed to have an impact on medicine supply. 60% said theirs was on quality, while 43% of innovators claimed an effect in lowering pharmaceutical and drug prices.

Last year, two talking points from Salient’s report were the need for increased capital from Africa-based investors and more money to flow into women-led startups. There’s been an improvement on the former: 58% of innovators that raised funding in the last 12 months cited Africa-led investors as a source of financing. But nothing has changed for the latter category as women-led startups are not still receiving the funding they need. According to the report, female-led startups with black CEOs accounted for 2% of the total funding raised by healthtech startups featured in this report. In 2021, they received just $1.6 million.

Spurred by the findings, a consortium of global and continental organizations, with funding from the Bill and Melinda Gates Foundation, is set to launch a $7 million pan-African healthtech initiative. Adeseun said the initiative, dubbed the Investing in Innovation (I3), will focus on women’s access to funding: supporting and funding 60 early and growth-stage African health supply chain startups over two years–and providing access to skills development.

“Women founders are disadvantaged,” the director said. “And that’s one of the things the investment in innovation will try to address: to take that gender and disadvantaged African founder lens and prioritize them when selecting the potential beneficiaries who will participate in the program.”

The pan-African initiative will have four hubs in east, north, south, and west Africa. It will give these startups access to market opportunities and showcase them to impact investors and venture capitalists. The expectation for the initiative is that after the two years elapses, additional funding will come from development partners who have already indicated interest but want proof of success before committing, Adeseun said.

Nigerian at-home lab testing platform Healthtracka gets $1.5M, backed by female VCs

According to this World Health Organization (WHO) article on treating cancer, detecting symptomatic patients as early as possible gives them the best chance for successful treatment. Though the piece is a template for cancer treatment, it applies to any disease, deadly or not. 

Diagnostics is at the center of healthcare; without it, doctors and physicians cannot offer treatment. But in emerging markets like Africa, where infrastructure is lacking and the doctor-to-patient ratio stands at a staggering 1:5,000, regular checkups are often considered an afterthought. 

Healthtracka, a Lagos-based healthtech seeking to change this narrative and drum home the proverb “prevention is better than cure” with its at-home lab testing platform, has raised $1.5 million in seed funding. Ifeoluwa Dare-Johnson launched the company with Victor Amusan in May 2021. And the news comes five months after its participation in the Techstars Toronto accelerator program last October.

Dare-Johnson worked several years in the healthcare space before starting Healthtracka. At some point, she led marketing efforts at a diagnostic center. Yet, it wasn’t a love for her work that pushed the chief executive to tackle this problem; instead, it was a firsthand experience of the issues late, or no diagnostics can cause. 

“As a scientist, I studied biochemistry in school and worked in the lab, so I knew how important diagnostics was. But it wasn’t until about four years ago, when my dad had passed, that I started to look closely into the space,” the founder and CEO told TechCrunch in an interview. “We live in Africa, where healthcare infrastructure is poor. So you would think that that would make people more conscious about their health, knowing nobody will save them. Unfortunately, that’s not the case.”

Though seemingly fit and healthy on the surface, Dare-Johnson said her dad had undetected health issues relating to diabetes and hypertension for a long time. While millions of Africans are guilty of personal health miscalculations, other factors contribute to irregular checkups such as waiting times and slow doctor consultations when present in a hospital.  

Telemedicine usage in Africa has skyrocketed since the pandemic as it addresses some of these challenges discouraging patients from making routine checkups. However, there are gaps in what telemedicine can cover. For instance, after most doctor consultations, patients are required to visit hospitals for lab tests, which makes up to 70% of all clinical decision-making. Then there’s the issue of convenience when patients feel reluctant to visit a laboratory or hospital. 

“These were some of the problems that I saw clearly and wondered how we could get healthcare to that level where you can be at home and access it seamlessly,” she said. “We thought that could be a game changer to how healthcare delivery can be improved in Africa. Somebody needed to come into that space to think about how to solve these operational challenges, build the logistics, technology, and the infrastructure to support the idea of at-home lab testing.” 

Healthtracka’s offering is a website where individuals can book their lab tests online, have their samples collected at home, and get their results via email within 48 hours. The tests range from fertility and STD tests to full body count and COVID tests. 

The one-year-old healthtech focuses on preventive care and partners with lab centers—which send their phlebotomists to customers’ homes—to diagnose. Dare-Johnson said the team’s experience in the diagnostic field helps it create quality checklists to vet these lab centers, one of which is meeting the standard ISO laboratory accreditation. 

Healthtracka also works with doctors to review results and specialists for further consultation. But while a typical test covers phlebotomists’ trips and doctors’ reviewing results, customers pay extra when Healthtracka connects them with specialists if the diagnosis is worrying.

“If you do your full body checkup with us, and there are indicators that show you need to pay attention to some of your markers, which our internal doctors cater to,” said the CEO. “But if they feel you need to seek a specialist opinion on the result’s marker, then we refer you to a specialist.” 

Healthtracka’s network of phlebotomists has increased 20x since its launch to over 100. And according to Dare-Johnson, the company has delivered close to 7,000 tests at home. Its revenue is growing 30% month-on-month as a result.

The company is taking three approaches to pursue more growth and diversify its revenue streams. First, it is launching subscription plans for its retail customers. The second is betting on its B2B play: offering APIs for telehealth service providers, hospitals, and pharmacies to provide at-home blood testing for their patients. Third, the healthtech company is looking to extend its presence beyond seven Nigerian cities to Kenya and Ghana before the end of the year. 

“Our progress has moved from being B2C to an infrastructure play, somehow. We want to power digital diagnostics and empower healthcare providers to reach their customers where they are comfortable,” the chief executive said. “This will help reach more people, save more lives, and ensure that healthcare is better in Africa.”

Healthtracka

Ifeoluwa Dare-Johnson (Healthtracka founder and CEO)

The funding will assist Healthtracka in its next growth phase as it also scales its B2B2C offering where partner companies in Nigeria can deliver at-home testing to their employees.

Investors in this round include Africa-focused early-stage VC Ingressive Capital and U.S.-based venture fund Hustle Fund. Angel investors included Alumni Angels Alliance and Flying Doctors. 

“Ifeoluwa is hungry and very bright. Not only did we anonymously use HealthTracka’s services in diligence and have a 10/10 experience, we recognized truly what this could become across the continent, even from just interacting with her team for tests,” said Maya Horgan Famodu, founder of Ingressive Capital on the raise. “The product is high quality, on time, affordable, and unlocking the door for a healthier Africa.”

African health and biotech raised $392 million in funding in 2021; less than $2 million was raised by female healthtech founders. Healthtracka joins a very brief list that includes the likes of French and Ivorian-based Susu and Nigerian-based Medsaf as one of the few healthtech venture-backed startups with indigenous female CEOs to have raised over $1 million in a single round.

A common theme among some of Healthtracka’s investors—Ingressive, Hustle, and Flying Doctors, including FirstCheck Africa, one of the startup’s first backers—is that they are female-led. Venture rounds such as this are a testament to the fact that women investors are walking the talk and collectively improving access to capital for women founders.

Boulder Care takes in funding as its opioid telehealth program yields industry-leading retention rates

Boulder Care, a Portland, Oregon–based telehealth provider focused on medical treatment and support for people overcoming substance use disorders, raised $36 million in Series B funding.

Founded in 2017 by Stephanie Strong, the company has a mission to address national overdose rates, particularly with opioid and alcohol use disorders. Analysis from the White House in 2017 shows the cost of the opioid epidemic was over half a billion dollars.

Stephanie Strong Boulder Care

Stephanie Strong, CEO of Boulder Care

Approximately 92,000 persons in the U.S. died from drug overdose in 2020, including illicit drugs and prescription opioids, according to National Institute on Drug Abuse figures. The number of overdose deaths has steadily risen since the late 1990s, but the 2020 figure is a sharp rise from the just over 70,600 deaths in 2019.

To fulfill its mission, Boulder Care is delivering thousands of naloxone doses, a medicine for reversing an opioid overdose, to patients and offering telehealth support alongside the medication, including case management, peer coaching and basic needs support. Boulder works to link together disparate providers along the continuum of care, “rather than facilitating ‘warm handoffs,’ we never let go of a patient’s hand,” Strong told TechCrunch.

It’s been a hot minute since we checked in with the company, last profiled around the beginning of the global pandemic when its opioid treatment was gaining traction. At that time, Boulder Care picked up $10 million in Series A funding, led by Tusk Venture Partners.

Over this time, the company went from caring for hundreds of patients to thousands of patients, Strong said. And, as the industry is moving toward value-add potential, it made sense to go after additional funding to accelerate growth.

“We are now working with dozens of plans and want to meet those needs that are required,” she added. “We also plan on going into partnerships and new states methodically.”

Backers of the Series B include Qiming Venture Partners (U.S.), Goodwater Capital, Laerdal Million Lives Fund and existing investors First Round Capital, Greycroft, Tusk Venture Partners and Gaingels. The new investment gives the company over $50 million in total investment.

The company has seen 100% year-over-year customer renewals since 2017, and 70% of its patients stay with the program for 12 months. Strong also touts its 90% one-month retention rate is a three-time improvement over industry benchmarks.

It also launched partnerships with 20 enterprise customers, giving millions of people, nationwide, access to the company’s services via health plans and employers, including Regence, Anthem, Comcast and Hewlett Packard through ComPsych EAP.

In the 2 years since the Series A, Boulder Care has also logged some impressive growth figures: It is serving several thousand patients with opioid and alcohol use disorders and grew its revenue over 10 times.

Much of its revenue comes from in-network reimbursement from Managed Medicaid arrangements that cover low-income members with complex needs. This means that most of Boulder Care’s patients don’t pay anything out of pocket to be a part of the program.

With this funding, Strong expects to triple the size of Boulder Care’s medical group, expand and deepen its presence in multiple markets and implement payor contracts that hold the company accountable for clinical and nonclinical outcomes.

The company is not alone in leveraging technology to solve the problem of substance abuse. Others have also attracted some venture-backed capital in the past couple of years — for example, Path, which offers care as part of an employee benefit; Affect, which focuses on methamphetamine abuse; and Monument and Tempest, both aimed at alcoholism.

Strong says that what sets Boulder Care apart from some of its competitors is the number of health plan contracts it has and that most of its patients pay nothing for the program, or perhaps a $4 co-pay, versus others offering monthly subscription rates that are pricing out folks who can’t afford to sustain that long-term.

Next up, the company will focus on growth into new states “in a thoughtful way,” Strong said. When entering new states, the company aims to forge relationships with local and state programs as a way to bridge the gaps in care with telehealth. It is also working with regulators on what telemedicine can look like as care for substance abuse evolves.

‘Move fast and break things’ is a bad idea for health tech startups

It may seem counterintuitive, but one of the reasons some entrepreneurs are drawn to healthcare are the regulations. No industry outside of defense is as heavily scrutinized, and for good reason: When you deal with people additional caution is essential.

Rules, requirements and regulatory complexity may be barriers to entry in the world of digital health startups, but they also present opportunities.

Founders often find creative ways to reconcile the additional oversight, like saying that their launch is merely a proof of concept, or that they can’t justify the cost of spending hundreds of thousands of dollars a month on advertising to attract new users.

When venture funding was scarce, there was a compelling need to prioritize speed and maximize the runway provided by smaller seed rounds. The environment, however, has changed — burgeoning investor interest and ample available capital have meant that there’s an even greater need to allocate significant budget to compliance.

Speed and efficiency may be essential for startups, but regulatory compliance need not be a bottleneck or a financial drain.

If compliance isn’t a consideration from the start, founders will sooner or later end up in a situation where they have to scramble to fix things behind the scenes, spending huge amounts of money on legal fees — and that’s the best case scenario. In the worst case, a deal can blow up.

It is understandable how these concerns can be overlooked at the beginning. There’s a certain amount of creativity and dissatisfaction with the status quo necessary for founders to conceive of building something that doesn’t already exist.

But when you’re building a digital health company, the ultimate end user is a person in need of medical care. The stakes are higher than creating the next puzzle game or food delivery app.