Building a Capital Efficient Healthcare AI Venture to $20M: Deepak Gaddipati, Founder and CTO of VirtuSense (Part 2)

Sramana Mitra: What year are we in now?

Deepak Gaddipati: 2012. In 2013, we licensed some of the technologies we developed and started Virtusense. The single objective when I started was to prevent falls. I was very passionate about it. I really wanted to figure out a solution. We didn’t have a solution, but we had a lot of ideas and technology on how to do it.

Sramana Mitra: You didn’t really have an idea of what market you were going after. Are we talking B2C?

Deepak Gaddipati: I had an idea. We wanted B2B. We wanted to be in the early detection for fall risk. When we started, all I wanted to develop was a tool that is going to tell that this person is going to fall in the next six months with a 50% probability.

Sramana Mitra: What was that technology? How would you do that?

Deepak Gaddipati: I got exposed to a lot of LiDAR and machine vision. Our thesis was very simple. If we can identify the movement of individuals using standardized tests that are currently connected with our natural eyes like see how a person walks, see how they get up from the chair. These are all subjective things.

If we can automate this with a very simple LiDAR sensor and train them with AI to automatically measure body movements. Then compare them against norms. That would give us a risk score. It took a lot of published research to get that normative data. We track about 30 different joints in the body. We ask them to walk 12 feet to identify each movement. We figure out their gait speed. What is their stance?

Based on normative data, we could say that this person has these things which are three to four standard deviations away. Then this is what would cause them to be at a higher risk for a fall. Then we had a bunch of government studies in motion labs where they quantified that if they had this deficiency, this is the risk for falls.

We took all the data and integrated it into our technology and our product. In less than 60 seconds, you do a gait, balance, and function assessment. We could tell the percentage of risk for this person for falls in the next few months. It was a big thing. We got a lot of good data. We ran a bunch of studies. We shared this data directly with CMS. We wanted to compare falls 12 months before and 12 months after implementing this technology. We reduced those numbers by almost 73%.

Sramana Mitra: In 2012 when you started this company and decided to license this technology, how was the company financed?

Deepak Gaddipati: I self-financed it. Until the end of 2014, I self-funded it. After that, we raised a small angel round. It was less than $300,000. We used that to get more people.

Sramana Mitra: The first bit that you self-funded, was it just you, or did you have colleagues with you?

Deepak Gaddipati: I had quite a few engineers. We had about five to six full-time people and half a dozen part-timers.

Sramana Mitra: That was a big burn rate.

Deepak Gaddipati: Yes.

Sramana Mitra: How long did it take you to when you were able to raise the angel round?

Deepak Gaddipati: Almost two and a half years. In healthcare, the biggest problem is, no one is going to buy from you until you show validated research that it actually works.

This segment is part 2 in the series : Building a Capital Efficient Healthcare AI Venture to $20M: Deepak Gaddipati, Founder and CTO of VirtuSense
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