Health Wildcatters is a mentor-driven health tech incubator located in Dallas, Texas. Wildcatters takes on about 10 early stage companies each year, culminating each December in a pitch day before an audience of potential investors and collaborators. We recently caught up with Health Wildcatters founder Hubert Zajicek to learn about the incubator’s current class, and why Dallas is a great place to launch a health tech company.
Tell us a bit about what Health Wildcatters is working on at the moment. What are you excited about right now?
Hubert Zajicek: So, big picture, we’ve got with this class that’s going to graduate soon. We have 42 portfolio companies that have gone through the program. Obviously this class hasn’t raised any funding yet. The previous 32 companies have raised above $20 million now; so that’s been in less than three years. And they all started very early, as you can imagine.
Tell us about the start-ups within Health Wildcatters.
Zajicek: We have companies in I think close to 20 states now and in two countries that have joined among those 42. So, this is not just a DFW or a North Texas group. The highest grouping is still healthcare IT or digital health. And the second largest group is medical devices. We have a couple that are more in the invasive side but the majority are noninvasive medical devices. And then we have an unclassified group that covers anything from tech-enabled services to healthcare consumer goods, even a pharma company.
Who is in your most recent class of startups?
Zajicek: First there’s Oqulus, a company that combines retinal scans and a propietary algorithm to instantly identify a wide range of cardiovascular and cerebrovascular biomarkers associated with diabetes, hypertension, muscular dystrophy and stroke risk. The gentleman that runs Oqulus is the ex-director of research for Alcon and is a serial entrepreneur. He’s got partnerships with a variety of large entities that want to dig into their databases.
Optologix is a research tool that could be sold to bench researchers that work in molecular biology.
MediBrookr is like PriceLine for imaging centers. If you want to get an MRI done, you just plug what you need into the app or website and they’ll get you pricing. With high deductible plans, people want to shop around, not just pay whatever comes in the mail.
KnKt’d is a behavioral health platform. It enables a social worker or someone who manages many behavioral health patients to have a dashboard of today’s health. Basically it works with an app that the patients interact with and that helps you deduce how well they’re doing. It’s very important for that workforce, since they are overworked and need a way to triage patients.
HealthNextGen is a software that would help you optimize treatment and predict outcomes of certain lesser-known diseases and how to manage them, especially when there isn’t a big patient base to predict. This is built on machine learning.
HealPal is like a peer-to-peer cancer platform to match you with someone that has a similar cancer. Just because you have brain cancer doesn’t mean that it’s comparable to somebody else with “brain” cancer. There’s dozens of different kinds. So, it matters greatly who you get matched with and for them to be somewhat similar to you, so that our information matters to you.
Friendly is like an asynchronous telemedicine platform that helps compress the doctors visit, gathering data before the physician encounter. The physician can view that data then decide whether he or she wants to go ahead and act on that information or wants to go live.
Endogenesis is basically an optical system that can detect cancer in the gut while you’re doing a colonoscopy, without a biopsy. This technology also involves machine learning.
Clinical Solutions is a marketplace for clinical trials. Let’s say you have some sort of obscure disease or a cancer. If you’re trying to get matched with a trial, it’s extremely difficult and opaque. Even if you go to the government website that lists everything, it’s very, very difficult to maneuver. Clinical Solutions allows these patients to input some information and then be matched with some clinical trials.
Finally, Amity Cloud is an application that helps train healthcare professionals in home healthcare settings. Let’s say you run a home health agency. You have huge a turnover issue to deal with, and you need to verify that care is being delivered at the right time. Very basic things, like: Was my son fed today? If that person is a nonverbal person, you might not know. This gives them the tools, and the evidence to show that services were rendered.
How many applicants apply to Health Wildcatters each year?
Zajicek: Typically about 15 to 20 to get to a single applicant. Generally about a five percent or so acceptance rate. We have gotten to the point where we qualify the applicants a little bit, in the sense that we discourage some that are too early. We have a health innovation hub here and we have some office space now, so we can give assistance and help to people who are thinking about a startup but where it wouldn’t be appropriate to join the incubator yet.
Taking a bird’s eye view of the more than 150 companies applying for the program, what are some of the trends you’re spotting?
Zajicek: Last year we had half medical devices. This year we’re back stronger on the health IT side. Two of the big trends out there have to do with the high deductible plans and the ACOs driving patients and behavior by the hospitals into two different directions. When you look at MediBookr, which would be like PriceLine for imaging centers, that would be something that appeals to people with high deductible health plans. The other trend is that ACOs and the various attached entities are pushing entities like Friendly, which is the asynchronous telemedicine platform. Because of their inherent constraints, ACOs are inclined to abbreviate the patient visit when it’s something that doesn’t need to be a live visit. That trend is supported by people’s lifestyle choices – that people don’t want to wait in waiting rooms or be on the phone.
Oqulus fits squarely into the ACO and population health play. Oqulus is the one where they can take your retinal scans and run them through their software and tell you that you missed 20 people who have signs of diabetic retinopathy. Since an ACO owns your vertically integrated life and healthcare cost, they know that if you become blind, you’re going to be much more expensive. And of course your quality of life goes down. They’re incentivized to catch you earlier, which is where Oqulus comes in.
Given the amount of investment capital in Silicon Valley and New York City, Dallas is a somewhat atypical place for a health tech incubator. What makes the city and region suited to the task?
Zajicek: It’s an interesting geography. There are over seven million people in the metro area, and it’s rapidly growing. We’ve got over seven hospital groups that are competing here. And unlike other cities, they are not compartmentalized. They are encroaching on each other’s territory everywhere. Many residents can literally choose within a five mile radius between a top notch hospital or one of their secondary hospitals, depending on what they prefer. So these groups are all competing and growing, which means they have more resources available. Overall, Texas is fairly entrepreneurial. The laws in healthcare allow physician co-ownership of various entities. We have tort reform here and the economy is doing fairly well. Plus, I think the most independent set of physicians are here in Texas, and that drives quite a bit of ingenuity.
Do you compete with Silicon Valley for the best startups? If so, how do you make Dallas attractive?
Zajicek: Most of the money is on the East or West Coast, obviously. Dallas can’t compete with that. But specifically in healthcare IT, we’ve got large corporations here. We’ve got quite a bit of activity, albeit it more the B2B healthcare IT end of things. We’re not so much about the glitzy consumer app in healthcare, but rather the doing end of things: dealing with large corporations, large populations, big data sets. A lot of stuff here has to be proven the hard way. The entrepreneur will be told: Okay, show me how it works for real, not just in theory. These startups have to pass a pretty high hurdle. Most of our investors are going to come from the region at first and only the next step, an A round or B round would they be able to attract resources from the big strategic VC firms.