Long Journey in Healthcare: Canadian Entrepreneurs Matthew Sappern and Emily Hamilton of PeriGen (Part 4)

Sramana Mitra: The story that you described from 1995 to 2008 is not Perigen?

Emily Hamilton: Correct. Perigen acquired all of the assets of that company.

Sramana Mitra: Who’s Perigen?

Matthew Sappern: Perigen is actually the combination of a company called E&C Medical, which was based in Tel Aviv that was trying to do pretty much what Emily’s team is doing, but from a different place. It was all driven around intervening in difficult labors. E&C, in 2009, was owned by a few private equity firms who decided to invest in buying the assets of Emily’s company and combining them with the assets of E&C into one company, naming it Perigen.

Sramana Mitra: Did E&C have any customers? Was there revenue in the company?

Matthew Sappern: There was revenue, about the equivalent of what Emily’s company had. Significantly large healthcare systems were customers.

Sramana Mitra: You brought together about $5 million each in revenue. You were in $10 million revenue across a number of customers. That was the beginning of Perigen?

Matthew Sappern: I think it’s safer to say, in terms of recurring revenue, that it was about an $8 million company.

Sramana Mitra: What happens in 2008?

Matthew Sappern: In 2009, the companies were brought together and had some compelling technology but struggled to get to market. In fact, that’s when the Board reached out to me and asked me to join as the CEO. They saw they had some great intellectual properties here that had yet to really grow. It had yet to live up to what they thought their promise was. I, at that time, had been working at Allscripts and actually was a corporate officer. The Board recruited me to come in and actually, first and foremost, determine if we had a company here. It was a very significant pivot. I’d like to call it the oldest startup around at that point.

Sramana Mitra: In terms of next major strategic moves of Perigen as an entity, what are some of the highlights?

Matthew Sappern: The most important moment for us came when we realized that a large chunk of our business was no longer sustainable. The company, as it existed, was not a sustainable company. There was a moment of clarity where we said we got a remarkable nugget of technology, which was the work that Emily and the team had done that was part of a significantly over-engineered and bloated product line. It was tremendously out of step with the market. It was quite fortunate that we were able to realize that a strategic pivot had to occur. So we started that process in 2013 and completed that mid-2014. We had pretty significant growth and remarkable traction since then.

Sramana Mitra: What is the driver of that traction? What are the key strategic drivers of that traction?

Matthew Sappern: To a degree, success breeds success. We were quite fortunate that we identified some evangelists within the world in which we were trying to sell. If there was one message that I would give to your cause of entrepreneurs, it is finding those customer side advocates or evangelists. As a CEO or someone like Emily who gave birth to this technology, we’re always going to be outsiders to the hospital community.

Finding that person within the hospital community who is like-minded and is engaged in what you are doing and who can constantly improve your technology and give you frank feedback became the turning point for us. Fortunately, we now have a number of clients. There is a whole culture to our client base now, which is great. Finding those one or two people who can advocate for you within the inside of the hospital community because as a vendor, you’re always going to be on the outside.

Sramana Mitra: You’re still selling the same product that Emily talked about?

Matthew Sappern: Yes. We actually trimmed the product line down to the things that Emily had been developing all of her life. It has served now as the foundation for other products. The core competency that Emily built into the product, we are now able to reuse and expand. We’ve got multiple offerings. We’re bringing new products and services to obstetrics that never existed before, all of which is based on finding new uses for that core foundational technology that Emily developed.

Sramana Mitra: Where are you revenue-wise today?

Matthew Sappern: We will do about $12 million this year.

Sramana Mitra: The company is now owned by private equity?

Matthew Sappern: It is currently owned by private equity. I’ve enjoyed your writings on venture capitalism by the way.

Sramana Mitra: Thank you.

Matthew Sappern: For someone who spends a lot of time in front of private equity firms, it’s fun to read about.

Sramana Mitra: I think I’ve got your story. Thank you for your time.

This segment is part 4 in the series : Long Journey in Healthcare: Canadian Entrepreneurs Matthew Sappern and Emily Hamilton of PeriGen
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