Exploring Consumer Driven Healthcare

EXPLORING
CONSUMER
DRIVEN
HEALTHCAREHEALTHCARE INVESTMENT THESIS
Chidi Nwankpa, MD
Chicago Booth MBA
cnwankpa@ChicagoBooth.edu
July 14, 2020

This investment
thesis is
predicated on
the following
industry trends:
➢ COVID-19 pandemic crisis and its economic
implications
➢ Aging population
➢ Rising cost of healthcare
➢ Increased consumer demand for flexible healthcare
➢ Emphasis on preventive medicine and healthy
living
➢ Expansion of the role of social media in everyday
living
➢ Advancement in AI and Big Data
➢ Regulatory reprioritization
➢ Increased healthcare information transparency
INVESTMENT THESIS | CHIDI NWANKPA

The increasing consumerism
of healthcare and the ubiquitous
reliance on technology for shared,
interactive connectivity are the
fundamental drivers of this thesis.
This positions investments in
consumer healthcare as
opportunities to transform the
consumption and delivery of
healthcare.
Healthcare investing presents a plethora of opportunities for the buoyant
healthcare disruptor. Various inefficiencies in the healthcare industry and
the change in demographics to an aging population, provide a backbone
for what the investment outflow of healthcare will look like in the near
future. Despite the rising cost of healthcare, life expectancy in the US has
remained relatively unchanged from 10 years ago. The need to transform
the US healthcare industry is a shared concern among stakeholders that
will drive innovations in the consumption and delivery of healthcare.

Expectations of Millennials for healthcare
Source: Our World in Data | Forbes
Percentage of Millennials who
want to schedule appointments
through an app and access their
medical records online.
would choose a telehealth visit
over an in-person one if given the
choice.
would prefer post care follow-ups
via email or text message instead
of phone.
71%
60%
66%

➢ The increased demand on the healthcare system caused by
the COVID-19 pandemic, triggered many healthcare
organizations to make changes to their healthcare delivery
systems.
➢ Consequently, Federal and State regulators were forced to
temporarily relax regulations that historically have hindered
the adoption of healthcare technology.
➢ This has led to the configuration of certain systems that will
favor the increased adoption of new technologies post
pandemic.
➢ Furthermore, the increase in the number of uninsured or
underinsured consumers as a result of the loss of
employment caused by the pandemic, will put more of the
healthcare purchasing decisions directly in the hands of the
consumer.
➢ These recent developments together with the focus
consumers place on health priorities, preferences, and price
sensitivity in their demand for healthcare services will serve as
primary drivers for the shift towards tech-based healthcare.
The COVID-19 pandemic has set the stage for a
shift towards tech-based healthcare. Healthcare
has been slow to adopt technology because the
most frequent users of healthcare – Baby
boomers and Silents – do not utilize technology
the way younger age groups do.
The digital age occurred at the midpoint of the
Boomers’ life cycle, after their social networks had
already been formed. Hence, personal and
physical contact are more important to Baby
boomers than digital connections and the use of
technology to interact with others. As Gen-Xers
and Millennials approach middle adulthood (age
40 -65), the age at which individuals become at
risk for most chronic diseases, their relationship
with technology today, will drive their preferences
for healthcare services and delivery.

Millennial healthcare consumers wants their digital healthcare experience to mirror
retail. In this era of 1-hour shipping, consumers expect convenience, flexibility, and
on-demand access from their healthcare providers. Big Data and AI will provide
technological solutions to meet this demand.
➢ Most of the non-physical aspects of the doctor's visit will be moved online. Checking in, medical history taking, medication refill,
specimen collection, tech-enabled home medication administration, imaging diagnosis.
➢ The main environment for healthcare would shift from being primarily in the physician's office to being cloud based. A significant
proportion of nonacute care delivery models such as office visits, urgent care, home health services will be conducted virtually.
➢ We should expect to see most of the functions of the primary care physician (Family Physician, Internist, Pediatrician), Radiologist, and
Anesthesiologist substituted with AI/ML.
➢ Retail stores (Walmart, Walgreen, CVS) will be major players in the consumer health space; involved in the retailing of at-home medical
diagnostics, wearables, virtual health services, remote monitoring and biometric devices that enhance self-monitoring and diagnosis.
➢ Healthcare products and services marketplaces (Amazon of healthcare), where third party healthcare providers and patients can deliver
and receive healthcare services, will be launched. Pharmaceutical consultations and purchase of prescription medications will also be
available here.
➢ Consumers will be able to see reviews of providers and products (Yelp of healthcare) and they can select from a variety of providers.
Algorithms will also be able to suggest providers that are best suited for patients using data analytics and artificial intelligence.

Shared, interactive connectivity will be the pillar of the tech-based healthcare. Social
media has become a part of the everyday life of Millennials and Gen Z. The data
shared on social media can reveal more about the average person’s lifestyle, habit,
diet, mental state, and risk factors than several visits to the healthcare provider.
➢ The next generation of healthcare users will embrace sharing of health and wellness data on social media and other connecting
networks. The increasing involvement of Big Tech – Amazon, Apple, Facebook, Google, and Microsoft – in healthcare will drive this.
➢ There will be an increase in the use of the smart phone to prevent, diagnose, treat, and manage diseases. This will be connected to
other technologies like the smart pill (medication adherence), contact tracing (infectious diseases).
➢ Improved healthcare information transparency will foster collaborations and create new patient/provider business models that will be
based on real-time clinical communication. Healthcare blockchain and cybersecurity products will develop to ensure that healthcare
data are shared in a controlled manner.
➢ New social and mobile applications will develop that can allow groups of people with shared ailments to have live discussions and
interactions. Already we are seeing YouTube channels, Facebook groups, and other platforms in which patients interact with one
another and build followership.
➢ Online health goals, aimed at getting people to share their health and fitness targets, medication adherence, treatment progress, and
lifestyle variables will arise (TikTok of healthcare); platforms that enable consumers and healthcare providers to crowdsource for
diagnoses, treatment protocols, and disease management will be created (Quora of healthcare).

Questions to ask?
Investment decisions in this sector should be informed by proper due diligence
centered on the market opportunity, competitive analysis, product differentiator,
company defensibility, and management’s execution.
➢ How painful is the problem this product is trying to solve?
➢ How likely are potential users to adopt this product?
➢ Does this product offer a significantly better user experience, functionality, information quality?
➢ Will the company’s brand/strategic alliances help to increase adoption?
➢ Will the product generate network effect?
➢ What is likely to be the consumer’s willingness to pay?
➢ How much out-of-pocket sales can this product generate?
Even the best product will perform poorly without the right management team. Proper understanding
of the backgrounds, skills, and executional abilities of the management team is critical to the due
diligence process.

Based on this thesis, I believe that the consumer healthcare startups
that are most likely to succeed are those that are primed to anticipate
the health priorities of consumers, create connective technological
solutions leveraging data analytics, and ensure that the technology
aligns with the consumer’s lifestyle and affordability

EXCITING
OPPORTUNITIES
➢ HEALTHCARE STARTUPS
➢ NON-THESIS STARTUPS

Routinify
Developer of technology-based remote healthcare solutions.
The company's WellAssist program collects 24/7 real-time data
from wearable and medical devices, as well as in-home sensors
and the patient's own interaction with the at-home devices,
enabling caregivers to take better care of patients
➢ Total Financing: $1.5M
➢ Last Financing: $1.5M
➢ Last Funding Type: Seed
➢ Notable Investors: Resolute Capital Partners
➢ Founder: Pat Kelly
Serial Founder and CEO. Previous company, Onstate
Communications acquired by TeleTech Holdings in 2012 for
$3.27M
Vertical: Virtual health/Telemedicine/Remote Monitoring
➢ Why now? The COVID-19 pandemic is driving a surge in demand for telehealth
capabilities to help in diagnosing and treating patients. To facilitate the use of
telehealth, regulators have eased restrictions, and payers have extended
insurance coverage. This is likely to be a significant near-term catalyst for the
industry that could have long-term ramifications as patients, providers, and
insurers become accustomed to telemedicine.
➢ Why this? Technology will be critical in improving care for the elderly. Improved
data analysis services will combine personal genetic and wellness data with
population data to design individual care plans. The founder is experienced in
building health tech companies.
Company website: www.routinify.com

Readout Health
Operator of a digital biomarker and hardware research
company. The company manufactures non-invasive, clinical-
grade ketone measurement device for the DTC, clinical, and
academic research markets, providing all-day feedback for
personalized metabolic feedback, resulting in stronger protocol
adherence
➢ Last Financing: $1.2M
➢ Last Funding Type: Bridge financing
➢ Notable Investors: BioGenerator, iSelect Fund, Synchrony
Bio
➢ Founder: Tim Ratto
Biophysicist with previous roles in the US National Laboratory
system, Lawrence Livermore and Lawrence Berkeley
Laboratories. Serves as the company’s Chief Scientist & Board
Member
Vertical: Digital Health/Health Tech
➢ Why now? The biometric wearable & device technology market is expected to
grow at a CAGR of 16.8% from $22.8 billion in 2019 to $70.9 billion in 2024.
Biometric monitoring wearables represent most of the market, growing at a rate
of 15.8%, while the smart fitness devices market is expected to grow at a rate of
24%
➢ Why this? It integrates with many nutritional and multi-patient platform apps
and is reimbursed through RPM as a Class 1 device. The CEO James Howard has
27 years of experience as a MedTech executive. His most recent prior role was
EIR at BioGenerator
Company website: www.readouthealth.com

Gali Health
Provider of personalized medicine services designed for
individuals afflicted by a variety of chronic conditions. The
company's services offer a personalized health assistant that
helps people manage their health and a platform for diagnostic
and therapeutic discovery based on the analysis of population-
level health, lifestyle and genomic information, enabling
patients to get access to relevant and valid medical information
➢ Total Financing: $5M
➢ Last Financing: $3M
➢ Notable Investors: Felicis Ventures, Bold Capital Partners,
Civilization Ventures, 100 Plus Capital
➢ Founder: llya Kupershmidt
Previously, founder of NextBio acquired by Illumina in 2013
Vertical: Artificial Intelligence & Machine Learning/Health Tech
➢ Why now? The digital economy has paved the way for convenient, customizable
consumer health tools accessible via smartphone apps. Improved connectivity
speeds enable consumers to access solutions on-demand, share information
instantly and stream high-quality videos. AR and VR technologies have the
potential to create powerful new experiences, particularly AR as it applies to
brain activity analysis
➢ Why this? Experienced founder and CEO in the life science tech space.
Significant serviceable addressable market (SAM) in the Elderly and disabled
space
Company website: www.galihealth.com

Future Opportunity: Vaizian
Vaizian is a medical diagnosis software company
that helps doctors prevent misdiagnosis by
combining clinical assessment with specialist
expertise. The company’s AI software considers
all patient data and diagnostic solutions to drive
better patient outcomes at a lower cost.
Founders: Ari Perlin and Mark Perlin
(Background in System Analysis and
Mathematics)
Significant Opportunity
Medical misdiagnosis accounts for about 30% of
annual healthcare spending in the US. This number is
expected to rise; driven by the aging population,
growing clinician shortage, and increasing time
spent by providers on administrative duties.

Future Opportunity: Ollipsis Fertility
Ollipsis Fertility provides egg freezing for free
and generates revenue by making half of the
retrieved eggs available for IVF patients in
need of donor eggs. Goal is to expand fertility
choices through education, options and
access through a community that radically
democratizes access to fertility preservation
while increasing the options for parents
struggling with infertility.
Founders: Albert Castelltort Mikkelsen, James
(Jim) van Horne, Anne Tong
The rise in dual income households and the trend
among women to have children later in life is fueling
demand for fertility tracking applications that can
help with conception.

Virtanza
Provider of a virtual class program intended to offer sales
education, certification, and job placement. The company's
program helps aspiring professional salespeople turn their
natural skills into rewarding careers in industries like health
care, technology, insurance; enabling college students and
adult learners who seek a pathway to income security with
employers in need of qualified Business Sales Candidates
➢ Total Financing: $150K
➢ Last Financing: $100K
➢ Last Funding Type: Pre-Seed
➢ Notable Investors: Expert DOJO (Brian Mac Mahon)
➢ Founder: Debbie Holzkamp
Previously co-founder Sales2job Academy – a licensed career
school in Ohio
Vertical: EdTech/TMT
➢ Why now? The economic recession and rising unemployment caused by the
COVID-19 pandemic will increase the need for college students and young adults
to seek out informal roles. Demand for these roles would also increase, as the
economy re-opens and businesses start to resume services
➢ Why this? Company has partnership with colleges and universities. Notably, The
Ohio State University, The University of California Irvine. Other partners include
Groove.co and Document solutions. Company has successfully placed 80% of
graduates in pilot testing
Company website: www.virtanza.com

BlackCart
Operator of an e-commerce platform intended to remove
friction during checkout and boosting conversions. The
company's platform allows customers to try on clothes at
home from their favorite brands without an upfront
commitment, enabling businesses to increase sales and profit
➢ Notable Investors: Struck capital, Revel partners, 500
startup, Mana Ventures
➢ Founder: Donny Ouyang
Serial founder: Notable previous companies –Kinkarso Tech,
Rayku, experience raising funds
Vertical: E-Commerce
➢ Why now? Mobile ecommerce retail sales is expected to reach $3.5 trillion by 2021.
One of the limitations of online clothing shopping is the inability to try on clothes prior
to purchase. It is estimated that around 80% of online shoppers don’t make purchases
from ecommerce sites that have problematic return policies; this leads to lost
opportunity for online clothing companies
➢ Why this? Founder is a serial entrepreneur with experience raising funds. Raised
$2M (CAD) entirely over Zoom during the pandemic
Company website: www.blackcart.com

Magic
Developer of software development kits (SDKs) intended to
end the era of passwords. The company offers SDKs that allow
developers to build applications with fast, customizable,
passwordless login; enabling developers to add passwordless
authentication in their applications
➢ Total Financing: $4M
➢ Notable Investors: Placeholder, Naval Ravikant, Lightspeed
Venture Partners, Volt Capital
➢ Founder: Sean Li
Previously- Co-founder of Kitematic acquired by Docker in
2015
Vertical: CloudTech & DevOps/SaaS
➢ Why now? As companies adopt permanent work from home or hybrid
versions, Enterprises will have to figure out secure ways to grant employees
remote access to permissioned networks.
➢ Why this? Magic aims to make passwordless the gold standard for online
applications. Technology already works with decentralized exchanges
(DEXs) like Uniswap and RadarRelay. Current investors such as SV Angel
have complimentary portfolio (Coinbase, Stripe, Airbnb, Doordash)
Company website: www.magic.link

Future Opportunity: Emojent
Emojent’s MPath is an AI-based software
product that utilizes AI technology to provide
enhanced insights about participants to
market research companies in consumer
studies such as online and in-person surveys,
interviews, and focus groups.
The changing consumer behavior and marketing
environment creates limitations to the benefit of market
research. The ability to control for some of these
changes by using AI to track consumers and provide
enhanced insights about them will greatly improve the
value of market research to enterprises in helping to
predict, customer lifetime value and churn rate.

ABOUT ME
➢ HOW I MAKE INVESTMENT DECISIONS
➢ PROFILE

HOW I MAKE INVESTMENT DECISIONS
➢ Lifetime access to University of Chicago Polsky Center for Entrepreneurship and Innovation (Incubator for GrubHub, AgileMD,
BrainTree, Justo)
➢ Member of Society of Physician Entrepreneurs (SoPE)
➢Member of MBAs in VC (Exclusive network of MBAs from top business schools- Chicago Booth, HBS, Stanford GSB, Wharton,
Haas, Columbia GSB, MIT Sloan, Kellogg, and Ross)
➢Member of Blck VC (Network of Black and Latino Founders and VCs)
➢Outsource: Blog and Twitter (Founders and other VCs reach out to me)
Sourcing:
➢ Things I evaluate: Market opportunity, Management team, Product, Business Model, Competitive landscape, Investment Positives
& Concerns, and Exit Opportunities
➢ Resources: Industry thought leaders, Corporates, In-network calls, Pitchbook, Crunchbase, Tech Crunch, LinkedIn, Management
Team
➢ Financial Tools: Financial Modeling, Valuation, Cap Table
Screening & Due Diligence:
➢ Health & Wellness companies: Firsthand experience of the US healthcare system as a Physician; Healthcare Startup experience
➢ Non-Healthcare companies: Previous startup and investing experience; MBA with specialization in Finance and Entrepreneurship
Portfolio Support:

PROFILE
I am a recent MBA graduate from The University of Chicago Booth School of Business. Prior to business school, I was a practicing
physician in family medicine before moving into the healthcare startup space. I spent two years at Primed eHealth, designing and
implementing one of the first electronic medical record systems in Nigeria. After Primed eHealth, I joined Mobicure, a healthcare
startup sponsored by the United States African Development Foundation. As the Director of Strategy, I oversaw the creation of
Omomi, a pioneer telemedicine software, and grew Mobicure’s user profile from 5000 to 25,000 in seven months. Our success with
Omomi led us to win the United Nations Sustainable Development Award for innovation. Since 2016, I have worked in the U.S. in
various capacities as a physician, entrepreneur, and investor. Most recently, I interned as a VC Summer Associate at Creative
Ventures in San Francisco. I sourced deals by leveraging internal networks; attending events, conferences, and demo days; and
reaching out to exceptional founders.
Experience:
➢ The University of Chicago Booth School of Business, MBA (Recipient of 1898 Merit Scholarship award, Booth Ambassador Award)
➢ University of Benin, MD (National Merit Scholarship)
Education & Awards:
➢ Interests: I love to dance, and I teach hip-hop dance fitness classes; I was also a professional cyclist (retired)
➢ Contact: LinkedIn: https://www.linkedin.com/in/nwankpacu/ Twitter: https://twitter.com/nwankpacu
➢ Website: https://chidinwankpa.com Blog: https://medium.com/@nwankpacu/
Interests & Contact Information:

Exploring Consumer Driven Healthcare

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