Medici adds $22 million to help people skip the doctor’s office
Austin startup expects to double its payroll within a year
A digital dramatization of a Medici app conversation between a patient and a health care provider.
Courtesy of Medici Technologies, LLC
By Mike Cronin and Will Anderson Austin Business Journal |
Upon learning Medici closed its series A funding round at more than $22 million, founder and CEO Clinton Phillips felt two things in quick succession: Elation, then accountability.
“The weight of the responsibility hits you,” said Phillips, who launched Medici Technologies LLC in 2016. “I thought, ‘Oh my goodness, we’d better make it rain.’”
Medici offers a free app that allows doctors and patients to communicate with each other by text and video — eliminating the need to go to the doctor’s office. The app complies with the 1996 Health Insurance Portability and Accountability Act, commonly known as HIPAA.
Investors included billionaires Natie Kirsh and Ken Griffin; former Dell Chief Financial Officer Tom Meredith; Tesla board member Antonio Gracias; Starwood Capital Group founder and CEO Barry Sternlicht; Publix Super Markets board member Howard Jenkins; and Amit Bhatia, founder and senior partner at Swordfish Investments.
Validation from those “unbelievable people” who have accomplished “incredible things” is huge, said Phillips, 43, who is a chiropractor and founder of two other health care companies.
The financial backing is particularly gratifying, he said, after facing rejection so many times.
“I get told no for a living,” Phillips said. “Fortunately, I haven’t had to do many investor pitches for Medici. Institutional investors reach out every day and I used to meet with every one of them. We could never get one deal done and we never got one cent from them after several years of pitching. It’s disheartening to say the least and a massive distraction from working on your business.”
Eventually, Phillips found Medici’s niche: CEOs “who really want to see health care fixed and are committed to support you for the long haul.”
The entrepreneur broke down his advice for company founders when pitching investors:
- Know yourself:“Investors can smell if you are not all in, or if you don’t know your weaknesses. Not everyone is cut out to be a CEO, or [be] ready to risk it all.”
- Know your market: “Don’t let anyone know more about your market, competition or business better than you do.”
- Know your investor: “What have they invested in? What are their preferences? You could probably cut 50 percent of your pitches by knowing upfront there is not a fit.”
International expansion
Medici emerged from stealth mode during the 2017 South by Southwest conference. Medici became available to patients in all 50 states six weeks later.
Phillips plans to use the funding to invest in “product and technology” and marketing, he said. The money also will be used to open operations in “two or three more countries.”
Medici currently boasts 35 full-time employees and has offices in Austin, Washington, D.C., San Diego and Johannesburg, South Africa. Phillips projects that its payroll, the startup’s largest expense, to double during the next 12 months, he said. Hires will include executives for operations and product management.
The results from Facebook campaigns in Asia, Australia, Europe and South America will determine the locations of Medici’s next few offices, Phillips said.
Medici recently moved to 7500 Rialto Blvd. in Southwest Austin from the downtown location of WeWork on Congress Avenue. Its new digs “should provide ample room for us as we grow over the next few years,” he said.
More than 2,500 doctors have downloaded Medici, he said. Phillips declined to disclose the number of patients who have downloaded the app, but he said, “We are seeing roughly 10 percent growth month-over-month in the number of patients who are downloading and inviting or connecting to their doctors using Medici.”
The series A round could last anywhere from one to three years, “depending on how aggressive we decide to be,” Phillips said. No investors cashed out, he said. Phillips declined to share the startup’s burn rate.
Series A rounds typically occur once a startup establishes a track record and has outlined its business model. It often pays for activities such as beginning commercial manufacturing and sales of a product or service that could be still in testing or pilot mode.
Prescription for revenue
Medici is not yet profitable and Phillips expects “consistent revenue” to be generated beginning in this year’s fourth quarter. The company will collect subscription fees from doctors or, for non-subscribers, transaction fees from consultations.
Subscriptions will include five benefits: the option to invite a doctor’s patients to use the app, a group-chat function, additional malpractice insurance, premium tech support and premium marketing, Phillips said. Other “secret” benefits will be unveiled later this year, he said.
Tech tools from Slack, Google Drive, Amazon Web Services and Atlassian are among those the Medici team regularly uses.
Medici handles its marketing, communications, demand generation and “doctor success” internally and uses GreenSmith Public Affairs in Washington, D.C. for public relations, Phillips said.
“While most people would consider our competition to be services like Teladoc, our biggest competitor is the 3 million Americans going into the doctor’s office for care that could have easily happened virtually,” he said.
What Phillips said differentiates Medici is its text-type of messaging; the ability to connect with all types of doctors, from therapists to veterinarians; and, ensuring the app “works for doctors” first.
“Most health care services focus on insurance, hospitals and sometimes patients,” he said. “We love our doctors and are determined to make practicing medicine delightful.”
Phillips said that the Medici team has learned how to more effectively articulate to doctors how the app helps make their lives easier by putting communication in one place — and gives them control over when they’re available for patients.
Still, “the biggest challenge is in helping doctors move closer to taking on the bureaucracy inside of their existing practices and within the system,” he said.
As far as an exit strategy goes, Phillips pointed out that several investors “have resources beyond that of any [private equity] fund.”
“When 1 million doctors are helping 1 billion patients, we will pause, thank God and ask who wants to exit,” he said.
There is a growing push to help patients avoid the emergency room. In the same vein, Austin-based Remedy Inc. offers on-demand house calls from health care providers, as does FetchMD, an on-demand app from San Antonio-based Ranger Health Inc.
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