The fast-growing startup had no trouble securing capital, with healthtech a hot sector for investors.
The company was started in late 2021 by co-founders David Pene and Jamie Frew with the goal of democratising access to advanced technology within the healthcare field. They both have close connections to the healthcare industry as Frew’s family ran a rest home and hospice and Pene’s partner is a clinical psychologist.
Carepatron raised $4 million from the same investors in a pre-seed round last year and Frew, the company CEO, tells Caffeine this latest round should give the company a two- to two-and-a -half-year runway to a Series A round.
“We could have raised ten times that quite easily but it was the right amount to get us to the next phase of what we are doing,” says Frew.
Since launching its end-to-end operating system for independent health practitioners – such as doctors, therapists, chiropractors and health coaches – product users have been growing 21 percent month-on-month to tens of thousands of healthcare teams.
The two-sided app for patients and practitioners is already saving 95 percent of its practitioner users more than eight hours of admin work per week.
Frew attributes investor interest in the company to a trend towards healthtech; that the technology is based on hours of engagement with community health professionals on what they need; and the fact the company went early with a global model that existed among other product categories but not yet in healthcare.
“I personally think that is really unique and if we can pull it off, it’s likely to be very successful.”
Blackbird’s investment notes back that up; they specifically mention the emergence in recent years of software that is consumer-grade and vertical-specific, with business management and embedded payment for small businesses. These products offer users a consolidated, cohesive experience that represents a serious upgrade on the status quo, and one app to replace them all was missing in healthcare until Carepatron came along, the notes mentioned.
Frew says accessibility delivered through modern tools allows practitioners to develop fundamentally new ways of working.
“Healthcare practitioners are currently using outdated and inefficient tools to run their practices; 70 percent of them operate from single-feature apps or still rely on paper and pen,” he says. “Without access to an effective solution, practitioners are required to manage incompatible tools, increasing their workload and distracting them from what is truly important: delivering care to patients in need.”
Around half of its half a million dollar-or-so revenue comes from the US, although the technology is in use across 50 countries.
You know you’re making inroads when one of your key competitors – in this case Power Diary – starts running comparative advertising stating why it’s better than Carepatron. In turn, the Kiwi company is running a similar comparison ad.
Frew says when he and Pene started out two years ago everyone told them not to do it, that healthcare was too hard and that what they were doing was not going to work. A short time later, incumbents in the market are now sitting up and taking notice of the “scrappy little startup in New Zealand”, he says.
He uses a car analogy: “Carepatron is like the Tesla and other products in the market are like the 1990 Honda Accords – they are consumed by two different types of people and ultimately we service a different type of client.”
Carepatron’s staff numbers have tripled in the past six months to 46 globally, and the new capital will contribute to continued team expansion; this will allow it to bring in more capability to service and deliver the best outcome for its existing community and support the growth it is experiencing, says Frew.
On the product side, it will also use the money to incorporate cutting-edge technologies, including AI.
In the past year Carepatron has already introduced new features such as full customisation, including the ability for providers to create different fields, labels and categories for patient/client records.
“The future of healthcare is going to be core operating systems that do a lot of the work for healthcare practitioners; so they’re not a place that you go to to streamline that work, they’re a place you go to enable that system to just do the entirety of that for you,” says Frew.
One of its next steps is to aggregate data from different types of providers – such as health coaches – and use that to create customised workspaces for them to again save time and money.
The startup initially focused on providing its technology to solo practitioners and small health practices but has scaled up to working with medical practices that range in size from five to 100 practitioners.
Frew says the growth in healthcare is coming on the preventative side and Carepatron’s technology is being used by teams working within hospitals as well as externally.
“In the US there are teams of people that exist within the communities they serve that ultimately try to avoid the need for health issues escalating to the point where those individuals need to be in the hospitals themselves.”
“Over time, the vision for Carepatron is to be their core operating system, so I think more and more we’ll lean into hospitals and it’s inevitable the software will mature to a place where we’re running core systems across large hospital networks.”
Fiona Rotherham is the editor of Caffeine. She previously worked at numerous business publications as editor, co-editor and senior journalist. Her passion for startups was sparked while working at former entrepreneur magazine Unlimited of which she was also editor for some years.
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