Medtech startup Episoft (and 2016 Springboard Enterprises Australia Accelerator Alum) has closed a $1,050,000 capital raise backed by four private investors in preparation for scaling up its offering.
Episoft is a cloud-based medical record SaaS business for chronic disease management that caters to health specialists and healthcare professionals in hospitals and clinics.
According to Jenny O'Neill, the founder of Episoft - a health IT executive with more than 20 years’ experience in senior roles and the first female President of 100+ member Medical Software Industry Association (MSIA) - Episoft’s key application is in supporting cancer and oncology patient management but had applications in other key areas in mental health, Crohn's disease, hepatitis and addiction disorders by delivering care coordination, management and treatment planning.
SBE Australia recently sat down with Jenny to discuss her journey, her latest capital raise and her experience with the Springboard Accelerator in Australia.
Episoft’s challenges raising capital in Australia in the digital health market
There is a gap in the current investment market in Australia between companies raising less than $500K or more than $3M, Jenny says.
“There is an appetite for software companies who are in the startup phase and those in significant growth expansion phase but in the middle - where EpiSoft is - there is a gap in the investment market in Australia.
“If we were after less than $500,000 it’s achievable to secure a number of smaller amounts from multiple investors. Or if we wanted more than $3M and had an established and profitable business and a sales and marketing function the money was there.
“But we fell into the gap in the middle. We know we need to increase our sales and marketing efforts to grow the revenue… that’s part of what we wanted the capital investment for so it does present a challenge.”
In addition, raising capital in digital health presented its own unique set of challenges.
“Healthcare is a more complex problem, because everything in healthcare IT has to be integrated. Your investors need to have knowledge and experience in that space and know that it can take 7-10 years to get a return on your investment rather than 3-5 year ROI you’d see for a consumer business.
Jenny says the answer for her was to find investors who knew the healthcare market, had an appetite for innovation, and were willing to fund some of that innovation.
Feeling supported as a female founder by SBE Australia
Jenny completed the Springboard Accelerator (2016) and found the support to be pivotal to her raising process.
“SBE Australia is a women-led accelerator that is essential in the market.
“Not just because of the feedback but the confidence you get to back yourself and do it and take it all the way, rather than selling out, was incredibly empowering. In reality, there is not a lot of support for women to really scale their businesses.”
Whilst raising capital, there were several offers from the VC market to buy out Episoft; Jenny wonders if this is a trend, to offer to buy out female-led businesses early.
“The traditional thinking does seem to be to buy out female-led business so they can be ‘properly’ looked after and scaled.
“I had developed a very strong and clear sense of self-belief backed up by knowledge, connections, mentoring, and support from the accelerator program I’d done with SBE Australia.
“So when I had three offers of buy out while I was raising, I wasn’t even tempted. I leveraged my experience and networks and kept very clear on my vision and direction. I knew my business’ value and my value as founder and CEO and stuck to my plan to raise capital and grow the business myself.”
Jenny says the buy-out offers could be delivered very differently and she advised women to be prepared for predatory offers but use your confidence, your numbers, knowledge and experience to present the case for funding and stick to it.
Now, Jenny has financial backing to grow the business.
“We will use this investment to deliver a stronger sales and marketing focus as well as develop EpiSoft’s platform for global scalability.”
The Episoft platform already works with some of the leading healthcare organisations from around the world including Healthscope, Sydney Adventist Hospital, Singapore University Hospital, the Chinese University of Hong Kong and St Vincent’s Hospital Melbourne.
Learn more about the EpiSoft platform here.
*Are you a woman entrepreneur looking to take her business to the next level? Applications are now open for the 2018 Springboard Enterprises Australia Accelerator - learn more here.