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Diagnosia closes second round of funding

paull Posted On October 14, 2013

“For information on risks and side effects please read the pack insert and ask your doctor or pharmacist” – this is what you hear (or not because it’s too fast) at the end of every drug advertisement. Do you ever take the time to read the leaflets? Well, perhaps you won’t have to anymore.

Vienna-based medical startup Diagnosia has recently anounced the closing of their second round of funding, and they apparently already have big plans on how to use it. We caught up with Lukas Zinnagl, co-founder and the company’s medical director, who told us that they are getting ready to roll out new applications and enter at least one new market this year.

Through this round of funding Diagnosia has raised funds of approximately one million euros, mainly from business angels Christoph Prinz, Michael Altrichter, Johann Jauk, Martin Dall, and Christoph Gelbmann – a part of the sum came from the Austrian Research Promotion Agency (FFG), Zinnagl told inventures.eu. “All our investors bring a lot to the table,” he said. “We’ve gained a lot of feasibility advice from the FFG, and our business angels bring in a lot of contacts and industry knowledge.”

“Gaining funding from the Austrian Research Promotion Agency (FFG) is definitely not easy,” Zinnagl said. “In our first year, the technological aspect was very important and while it still is, [now] there is also a strong focus on marketability.”

In 2011, Diagnosia secured an investment round led by Austrian business angel Johann (“Hansi”) Hansmann.

What is Diagnosia?

Diagnosia has developed a sound, international database for medical drugs. In a nutshell, the tool reads out drug information directly from the official product leaflets, saves the data, and makes them accessible to both doctors and patients in a standardised format. While this sounds simple, the information about drugs out there is not only vast but also vastly unorganised.

The programme that extracts and saves this information, the “Diagnosia Brain”, won the company their first part of the FFG funding. “We called it the Brain because it’s comprehensive and immensely complicated,” said Zinnagl. An initial (PreSeed) grant was given to them by the aws, which allowed them to form a company.

Today, the technology behind the Brain has been improved from “reading comprehension” of extracting numbers and data, to connecting and interlinking those. This is also what won Diagnosia follow-on funding from the FFG.

On to new shores?

The drug search of Diagnosia is freely available in 14 languages and serves more than 1,3 million users per month. With the newly acquired funds, the startup plans to expand beyond Austria before Christmas. There, two of Diagnosia’s programmes – Index and most likely Check (still in beta) will be available in a localised version. “Localisation is not easy at all. There really is no central governing law on independent medical advice,” said Zinnagl. “When we enter a new market, all legal disclaimers, for example, must be drafted with regard to the country. Drug names are often completely different in different countries.”

Simultaneously, Diagnosia will roll out Check as well as its mobile applicationsfor smartphones and tablets in Austria. Their marketing roadmap has been extensively planned to raise awareness before the launch – addressing key opinion leaders, medical journals and doctors’ unions. “We saw in Austria that we got our first customers simply by sending out an email, announcing that this database will be available soon – demand is quite high, as there really is no comparable system widely available,” said Zinnagl.

And then?

Diagnosia is currently running usage trials in Australia, since Australian doctors need to be highly mobile and tech savvy due to low population density. Yet, will doctors ever be replaced by a huge database? “No, I don’t believe so,” said Zinnagl. “We are observing a big shift, medical knowledge increases at incredible rates and the standards of evidence-based medicine keep increasing [as drugs and treatments need to be increasingly backed by clinical trials and studies]. The sum of information is simply too large, and technology is already a fundamental part of the medical practice.”

Diagnosia currently operates with a team of 20 out of their Vienna headquarters – in five years they want to be present not only in numerous European countries, but “be the best in terms of product and information – a true support for doctors by doctors.”

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The doctor in an app

marijanam Posted On September 3, 2013

We meet in an old-fashioned café in the centre of Zagreb, where smartphones or even laptops belong to another world. In Mala Kavana, older Zagrebians meet to chat over a coffee, they gossip, talk about politics and maybe their hip problems. One wouldn’t expect Josipa Majic and Ana Burica, both 23 years old and the founders of IDerma, a developer and provider of mobile applications for the health sector, hanging out there. But since they don’t have an office, nor have they registered their company yet, a central place in the Croatian capital seems more suitable to meet than a clinic. In their appearance, the two students stand out: They act like professional businesswomen who are ready to tear down all obstacles, and who know what they want. Their startup IDerma is highly recommended and awarded. The duo is still astonished by that fact, because only one year ago, none of this seemed possible.

Talk to your doctor about it

Josipa is the well for ideas of the startup, Ana is the data analyst, and both are developers and communicators. “It all started after Josipa attended a startup camp. She called me and said: Let’s start a company,” Ana recalls. “Because of our personal experiences we decided that our project should be about dermatology and health in general, an area we both wanted to work in.”

IDerma provides patients with access to their documents and health charts, gives them the possibility to stay in touch with the doctors via app and email, and includes a timetable and therapy plan over a mobile phone. Also, the app can be a communication tool, where patients can exchangeexperiences, like in a virtual waiting room. This personalised access is an asset to every clinic, finds Josipa, emphasising the importance of data mining: “The analysis of the requests and the whole communication is the basis for decision-making for a clinic or a doctor, about the staff, the medication, the offers of the clinic and everything else.”

Josipa started her own research on dermatology and skin conditions already in grammar school, and she chose the topic for her graduate thesis. “The majority of illnesses are of psychosomatic origin, so the therapy itself won’t solve the illness. What solves the problem is communication with the doctor,” she says, explaining her motivation to create a tool that helps doctors and patients stay in contact better. “A survey shows that 40 percent of mistakes are made because the communication between doctors and patients, and doctors and staff fails.” Also, dermatology and skin didn’t seem as a sensitive legal matter like other health issues. And, among others, “dermatology has one of the highest margins in the private sector, so it is highly profitable. It doesn’t suffer from the crisis,” Josipa explains the business idea.

Josipa and Ana met when they started studying at the University of Economics in Zagreb. They teamed up immediately, “but we are totally different”, says Ana and laughs. “Josipa is the creative head, I am more the technician.”

Photo credit: IDermaDon’t forget your alma mater

While the duo was convinced by IDerma from the beginning, not everyone was supportive of their idea; in Josipa’s case, not even her parents. “My parents think more traditionally, also profession-wise. They absolutely don’t get what ‘the little one’ is doing. They were against the project in the beginning, which was a real problem, because it made it hard for me,” she recalls. But after the project got going and was recognised by the World Bank and the European Commission, to Josipa’s relief, her parents “accepted it a bit, although they don’t understand it really. They still think that it is not so clever thing to do.” Ana was luckier: Her parents are both engineers, her mother is a software developer and works for a pharmaceutical company.

But one of the biggest supporters of IDerma was the duo’s university faculty. “This is not as surprising as one would think,” Josipa says. “It is said that only drop-outs make good startups. Butour experience is that university networks have great potential.”

“Transfer of knowledge happens in universities,” Ana says. As the two seem to have the tendency to add to each other’s sentences, Josipa continues: “There is the trend in the world for academic startups. At universities you have years of experience and the right people. And per definition this is a place where new ideas are born.” With the two, it’s not just talk – they act: Ana and Josipa developed an app for students to connect in order to pursue their idea and make academic startups more popular.

Coding 101

Starting their own enterprise, not everything went as smoothly as it seems, now that they have a neatly made website, a good product and more than 20 clinics worldwide using their applications, from India to the USA. Starting with the resistance of Josipa’s parents, the obstacles included finding somebody who could support the team technically. Soon after, however, they figured that a good programmer was difficult to attract.

“At the beginning, we had a rather naïve approach,” says Josipa. “We thought it would be an easy thing to contact a programmer, like: ‘Thank God, there are enough of them who are just waiting for an opportunity’. On the contrary: Shortly after we started developing the idea, we found ourselves facing a wall,” Josipa remembers the difficult times, when they were having an idea but, because of the lack of programming skills, no product. At the same time, their clients were already waiting for one. “In the end, we did everything ourselves.” This took them three months.

Ana explains: “We both are economists, but after we decided to go from clinic to clinic and offer our product, we put on paper what is needed for a mobile application.” If you had asked them to put their own app in the Apple Store at that time, that would have been close to unthinkable. “But then we looked into it and learned how to do it on Android and Apple,” she continues. “We don’t programme software, but we personalise our suggestions for our clients.”

The WWW was on their side. “Everything what we needed to develop the app is online, so we figured that there was no need to be desperate,” says Josipa. “It was a genius thing to learn all that from scratch. Looking back, we wouldn’t have liked to rely on a programmer for the entire project development anyway, as they would neither know our aim nor the needs of a client.” All this eventually resulted in a better understanding of their project – “from learning code to creating the website and the apps.”

What’s more, Josipa now understands the point of view of their clients well: “In the health sector time and speed is of outmost importance. When you cannot answer immediately, there is no need to answer at all.” In order to stay on top of it, you have to be able to adapt to your patients’ needs, she adds. “And that’s why it works with us, we are flexible.”

Photo credit: IDermaSuccess in a small range

When Ana speaks about the definition of success, she stays modest: “What fascinates us nearly every day is what we have achieved in three months…If we continue with ten percent of this energy, it is going to work.” For Josipa, success has a similar meaning: “We see success in a small range. A clinic in India for knee operations that uses our app and with the help of which patients all over India can do their training is a success.”

Until now, Josipa and Ana could not measure the success of IDerma in high profit. “We are doing our best knowing that not the amount of investment is important here,” saysJosipa. “The applications are our first cash flow, but it is not enough to pay the costs.” Currently, the duo is working to improve their newest product Teddy the Guardian, a health monitor for children and their parents, built in a soft toy. (Read more about it here).

As of right now, “it is time to start IDerma as an own enterprise,” Ana names the next goal.

The biggest marketing tool for the young Croatian enterprise is their clients and their patients, and word-of-mouth recommendation. And who knows, perhaps this traditional way of advertising just happened a few tables away, in this old-fashioned café in the centre of Zagreb.

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mySugr launches in the US and gets Ferris on board

alexandrac Posted On June 6, 2013

Yesterday, Austrian startup mySugr launched its diabetes app in the US. The Vienna-based company developed a medical app for diabetics that turns the tedious monitoring of food intake and blood sugar into a game that even 6 year olds can use with an own junior version to answer to the increasing rate of diabetes. After a lengthy process of authorisation by the American Food and Drug Administration (FDA), which recently published their guidelines for the mHealth sector, mySugr could now enter this promising market.

Co-founded by Fredrik Debong, Frank Westermann, Gerald Stangl and Michael Forisch in 2011, mySugr currently have almost 14.000 users mainly in Austria, Germany and Italy. By the end of 2013, the team of 16, which to a big part is made up of diabetics and is based at Vienna’s Sektor5 hope to grow their customer base to 60.000 users by the end of the year, as Debong told inventures.eu last month.

Tim Ferris as advisor

The launch of the US subsidy represents yet another milestone for the successful medical startup. In 2011, mySugr emerged as the winner of TechCrunch at the Viennese Startup Week, earning the reputation of game changer for its work at the intersection of mobile, health and social gaming. After the product launch in April last year, mySugr partnered up with T-mobile and Sanofi and launched its junior version in April 2013.

What is more, mySugr recruited no other than the New York Times bestselling author Tim Ferris for its board of advisors. Ferris has experimented extensively with blood sugar levels for his Slow Carb Diet (featured in “The 4-Hour Body”), both on himself and countless others, and there is no surprise that he is a fan of the self monitoring app. (Also see this article by Diagnosia co-founder Lukas Zinnagl in TechCrunch)

“Our goal at mySugr is to change how people with diabetes are perceived by the public. Tim understands that every person who lives with diabetes is a hero due to the constant calculations they are making and the data-driven nature requiring them to make decisions without their doctor. We hope people with diabetes will be seen as pioneers of the quantified self movement and Tim is a role-model for making quantified self behavior socially acceptable and perhaps even cool,” states the mySugr website.

Read more on the subject:

Fredrik Debong: Vienna’s Sugar Daddy
mySugr Junior: Answering to an alarming trend
Diagnosia: This is your brain for drugs
An app a day keeps the doctor away?
“The medical sector is hardcore”
The Opposite of an Exit – How to get a Licensing Deal

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Diagnosia: This Is Your Brain For Drugs

michaelb Posted On May 16, 2013

According to a 2010 re port, the World Health Organization (WHO) estimates that “more than half of all medicines are prescribed, dispensed or sold inappropriately, and that half of all patients fail to take them correctly.” You don’t need to be a doctor to realise that this is a major medical problem. What good is a clinically proven medicine when a doctor prescribes it incorrectly, or perhaps not at all? The results are horrifying not only in terms of potential harm to patients, but also in terms of wasted resources of governments and their citizens. Especially worrisome is the incorrect use of antibiotics, which increases microbial resistance and ends up prolonging illnesses and hospital stays, leading to billions of euros in costs in Europe alone.

“There are some 13,000 drugs on the market in Austria. As a rule of thumb, every five years medical knowledge doubles. It’s hard for a physician to make evidence-based decisions because there is so much evidence available,” says Lukas Zinnagl, co-founder of Diagnosia, an Austrian startup company that believes its products will help solve this problem. Zinnagl should know: he is a medical doctor, though he gave up practicing medicine about five years ago. Since then, he has become an experienced and successful startup entrepreneur and also the co-founder of MedCrunch, an “online magazine covering health, medicine, entrepreneurship and technology all centred around new trends and the challenge of being a physician.”

The medical entrepreneur: not part of the public mindset

“I found medicine, as a topic, very interesting. But it’s not necessary to become a doctor after studying medicine, only about a third do so and the others usually go into pharma or research. The public mindset is fixed on the idea that someone who studies medicine shouldn’t be anything other than a practicing doctor. I think there are many doctors who would like to switch but are afraid to because they never have learned anything else other than medicine.”

Zinnagl recalls why he changed his career course: “When I started working at the General Hospital in Vienna, I remember that when I came home, I wasn’t reading the New England Journal of Medicine or Nature, but rather TechCrunch. I thought that if I really wanted a career as a doctor, I shouldn’t be doing that.” He got involved with (Tech startup incubator/investor) i5invest at its early stages. “In the mornings I was in the hospital and in the afternoons I went to a startup’s office. I asked myself where I’d rather spend the next ten years? I decided it would be more fun working for a technology startup than in the hospital.” Well, certainly less depressing and you don’t have to wear a white jacket every day.

A combination of naïveté, optimism, freedom from debt and no family obligations helped Zinnagl make the jump from practicing doctor to startup entrepreneur. Through i5invest, Zinnagl started doing business development and marketing for Tupalo.com in 2009. It was then he first encountered Diagnosia co-founder Marco Vitula, who was then busy launching his successful startup, arztsuche24, an online directory of Austrian doctors that was eventually sold to Herold in 2011. Along with another doctor friend of Vitula’s, Fritz Höllerer, and Stefan Weixelbaumer, discussions about Diagnosia got under way.

The four of them soon realised thatthey had complementary skills and backgrounds necessary to get Diagnosia going. Zinnagl concentrated on the web-platform, Vitula on being the link between the developers and the business side, and Höllerer on the mobile apps product development that eventually became a daughter company called Aeskulapp. Weixelbaumer served as CTO through the founding, but later left operations to pursue other ventures.

Armed with their vision to be a solution provider of clinical drug tools, they applied for and received grant funding from the Austria Wirtschaftsservice (AWS) and more from the Austria Research Promotion Agency (FFG), enabling them to form an Austrian company (GmbH) in 2011.

Diagnosing the Problem

The 2010 WHO report on inappropriate use of medicines cites “lack of skills and knowledge” among medical professionals as a major factor contributing to the problem. It’s not that doctors are idiots, but rather that they are overwhelmed with too much information—drug information and clinical guidelines from independent, official authorities can run up to 200 pages long—and have no simple way to access data in aggregated form. Instead, many doctors may receive their information on drugs directly from the pharmaceutical companies,who may be less than scrupulous in promoting their products.

Diagnosia’s founders believed they could provide a solution. The first step was in creating the technical backbone to support their planned applications. Named “Diagnosia Brain,” this proprietary technology is able to process and aggregate all of the up-to-date drug data (mostly in pdf format) from European medical agencies and product leaflets. The result in a mammoth drug database that can be tapped for web-based and mobile applications. According to Vitula, “It sounds easy, but in fact it’s quite complicated. Every European country has different drugs, regulations, and studies. Diagnosia Brain can aggregate and link this information together, independent of country or language.”

The next step was to build an application layer to tap into the “Brain.” Diagnosia Index was created, allowing both patients and doctors to access product leaﬂets and contextual meta information for all medical drugs authorised in Europe, in more than a dozen languages, at no cost. The Index allows a user to search by brand name, substance name or classification. Diagnosia Index also has a premium subscription service for doctors only, which provides additional information in a customisable, user-friendly interface on web-based and mobile apps, which are also readable offline.

1,4 million monthly visitors and looking for investment – in Austria or anywhere

Though there are some 1,4 million visitors per month to the website, the premium paywall service is available only in Austria as a test market. According to Vitula, Diagnosia Index has “about 200 customers in Austria at the moment, and we got them without hardly any marketing, we only sent out some emails. Within the next month we’ll provide a tool, Diagnosia Check, for assessing drug interactions, side effects from using two or more substances simultaneously. Over the next two years, we want to provide an indication-based search, meaning you can search for diseases and find the relevant medical treatment, based on current official studies.”

In 2011, Diagnosia won the Doctors 2.0 conference Startup Award in Paris. Perhaps this recognition helped get the attention of Austrian Business Angel Johann (“Hansi”) Hansmann, who soon became an invested partner. “We were one of his first Austrian investments,” says Zinnagl. Vitula adds, “Hansi not only provides capital but also his great experience. He was with many pharmaceutical companies in Spain and so he gave us a lot of contacts and help with our internal structure. Almost all the money he invested was applied toward the Diagnosia Brain and very little for the application layer. Now he helps us to raise funds for our next round.”

Diagnosia is now seeking more investment. “We want to roll out in six countries and will use the next investment round for technical roll-out and for marketing and distribution,” says Vitula. He regrets that “in Austria, it’s really hard to raise more than 500K. The banks are not providing and there are few VCs and Angels. If we really face the problem of not being able to raise capital in Austria, we’ll have to move even though that would be really disruptive to our company and team.”

Their goal is to capture 10% of the some 2 million potential customers (doctors) in Europe over the next ten years. But it’s not just the business success that is the goal. “When we achieve success, we will have saved thousands of lives because of better doctors’ decisions,” says Zinnagl. “We can really contribute to reducing the errors in prescribing incorrect or incompatible medications. If our tool can help guide them in their therapeutic decisions, it will all be worth it.

Read more on the subject of medical and healthcare startups from CEE:

Med and Health Startup Focus Part 1: An app a day keeps the doctor away?

Med and Health Startup Focus Part 2: The future of healthcare startups in the EU

Med and Health Startup Focus Part 3: “The medical sector is hardcore”

Profile Fredrik Debong (co-founder mySugr): Vienna’s Sugar Daddy

Profile Jama Nateqi (founder Symptoma): Just what the doctor ordered

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