July 9-10, 2013
San Francisco, CA

Tickets On Sale Now

You’ve got a fever, and the only prescription is more Funding Daily? We think we can help you with that.

We had another whopping 11 funding announcements today, but of all of them, the top two biggest deals went to health startups. We think health is one of the biggest topics of this year. So much so that we held an entire conference around it.

But you don’t need to believe us; the money speaks for itself!

For more funding news as it happens, subscribe to our Deals Channel feed. You can also follow VentureBeat on Twitter, @venturebeat, to view funding news as it’s published.

Healthcare tech startup COMS Interactive grabs $21M

COMS Interactive, a startup that produces SaaS products for the healthcare industry, has secured a new $21 million round of funding, the company announced today. COMS’ main product is Daylight IQ, a software suite that manages health and disease profiles for elderly residents at senior living facilities. The software suite helps track changes in a person’s condition and alerts attendance and doctors accordingly, which basically helps save patients from going to the doctor multiple times before finding what’s actually wrong. Read the full story on VentureBeat.

CareCloud raises $20M to vanquish ‘walking dead’ and ‘dinosaurs’ of health IT

CareCloud has raised $20 million to break the healthcare system out of the Jurassic era. CareCloud offers cloud-based electronic health record (EHR) software. It provides tools for practice management, EHR, and medical billing that connect providers to each other and to patients, creating a complete digital healthcare ecosystem. Tenaya Capital led this round with participation from existing investors Intel Capital and Norwest Venture Partners. It brings CareCloud’s total funding to $44 million. CareCloud is based in Miami. Read the full story on VentureBeat.

FiftyThree raises $15M to unleash your creativity with Paper

FiftyThree is going on fifteen. Fifteen million dollars, that is. FiftyThree is the company behind Paper, an iPad app that Apple named 2012 iPad App of the Year. Today FiftyThree closed a $15 million deal led by Chris Dixon at Andreessen Horowitz with participation from Highline Ventures, Thrive Capital, SV Angel, and Jack Dorsey. Read the full story on VentureBeat.

Personetics raises $11.5M to improve bank customer service

Personetics has raised $11.5 million — led by Lightspeed Venture Partners — for its predictive analytics solutions for the banking industry. The technology aims to predict customer needs and provide quick resolutions so financial institutions can improve their customer experience and reduce their operational costs. This funding will be used to drive sales and scale operations. Existing investors Sequoia Capital and Carmel Ventures also participated in this round. The company has offices in New York, Barcelona, and Tel Aviv.

‘Big data’ startup SpaceCurve raises $10M

SpaceCurve — a startup that lives to suss out massive amounts of location, social, sensor, and timeline data — has just raised $10 million. This round, led by Triage Ventures, is the company’s second institutional round of funding. Since it was founded, the startup has taken a total of $17.3 million, including a $3.5 million Series A last summer. The startup is trying to organize and make useful just about every kind of data imaginable. Read the full story on VentureBeat.

Nok Nok Labs improving two-factor authentication with $4M in debt financing

Nok Nok Labs, a security startup focused on making two-factor authentication even stronger, raised a $4 million round of debt financing today from existing investors Onset Ventures and DCM. Nok Nok is working on its Unified Authentication Infrastructure product — a form of two-factor authentication that companies can build off of. The technology takes advantage of existing features in the devices their employees already have. For example, if an employee is trying to access something on his smartphone, he may have to swipe a finger to prove he is really there. The company announced a $15 million first round of funding in February though a spokesperson explained to VentureBeat that this funding actually closed in 2011. Read the full story on VentureBeat.

CloudByte cooks up $4M for software-defined storage

Showing VCs are more than willing to throw money at buzzword-filled startups, software-defined storage startup CloudByte has raised $4 million in new funding. Campbell, Calif.-based CloudByte’s software promises to “guarantee quality of service to every application from a shared storage platform.” Essentially, the company’s tech brings virtualization and software-defined smarts to storage. Companies can use it to better manage storage for applications in a virtualized data center. Read the full story on VentureBeat.

Real-money gaming platform Skillz files $4M funding round

Real-money-betting company Skillz raised $4 million in its latest round of funding. Skillz provides mobile gamers with a platform to put real money on the outcome of competitive games. It is currently operating in more than a dozen Android games, where players can compete in tournaments for the chance to take home a real-money prize. This is similar to recent efforts from some companies to get into real-money casino games, but Skillz operates solely in skill-based titles. Read the full story on VentureBeat.

Choo choo! Capitaine Train chugs into second station of funding

Capitaine Train has raised $3.34 million (€2.5M) from Index Ventures and CM-CIC Capital Prive to grow its online train-ticket booking platform. The company sells tickets to European destinations and distributes all of the offers of two major railway companies in Europe: SNCF and Deutsche Bahn. Its mission is to become the go-to marketplace for all major European rail operators. Capitaine Train raised $1.8 million from the same investors in Feburary 2012 to build out the technology. Capitaine Train was founded in 2009 and is based in Paris.

YC startup Ink raises $1.8M to make software more open-minded

Y-Combinator startup Filepicker.io has rebranded as Ink and announced the close of its $1.8 million seed round. The “file system as a service” startup went through YC’s Summer 2012 class. It builds tools to make it easier for developers to integrate access to cloud services within their apps on the web, iOS, and Android so they can share content stored in different places. Andreessen Horowitz and Highland Capital Partners led this round. Filepicker is based in Palo Alto, Calif. Read the full story on VentureBeat.

ProxToMe raises $700K for mobile blasts to attendees at live shows

Imagine you’re Bruce Dickinson, the vocally powerful monster showman of heavy metal band Iron Maiden. You’re a legend and a god, but you need new ways to reach your concert-going fans at the show. You might consider using something like ProxToMe to send out a flurry of preshow band pics right before you go onstage to get people really whipped into a frenzy and totally ruin the opening act’s set. The company received $700,000 in seed funding today. It was founded in the U.S. Its development team is based in Italy, and the head of business development in San Francisco. Read the full story on VentureBeat.

Science-related investment fund QWave invests in its first round of companies

QWave, a $100 million fund for early stage private companies working on physics and materials-science-based technologies, announced its first round of investments today. That round includes Estonia-based semiconductor startup Clifton and Indiana-based nano-sized optical chip startup Nano-Meta Technologies, Inc. The QWave fund’s purpose is to help science-based startups capitalize on opportunities as well as provide a platform for investors to participate in the “next wave” of scientific tech. Read the full press release here.

Drawing after Charles Schulz by Meghan Kelly

This is a guest post by Dr. Paul Langevin

Google Glass has the potential to greatly enhance medical practices in a number of ways, VentureBeat recently reported. Among these is the ability to retrieve, see, and disseminate information rapidly and efficiently.

However, Google Glass for health care will remain a concept — rather than a practice — until developers gain a better understanding of the medical environment. There are constraints that non-clinicians seldom realize even exist, and the success of any product in the industry is ultimately determined by its functionality in that environment, regardless of how ingenious an innovation may be.

As a physician, here’s my take on how Google Glass developers can navigate the operating room, and other clinical settings.

The true meaning of “hands free”

This lack of insight into the clinical environment is demonstrated by the “hands-free” technology of Google Glass. A hands-free system in the clinical sense would need to be very literally hands free. I cannot overstate how problematic it would be for a doctor to wave their hands about in a sterile environment. Touching or even nearly touching a sensor to interact with the system would sharply curtail the device’s utility in any procedural environment.

Touching anything that is not sterile, whether it is the Glass or something in proximity to it, would require the doctor to change whatever touched the device such as a gown sleeve, glove or instrument.

Furthermore, a pop-up menu can be and will be very distracting. Non-clinicians do not realize that it is not unusual for some physicians to receive 20 or 40 pages in an hour on our beepers.

These auditory distractions are intrusive enough and at that kind of a rate, they become more than a nuisance. Most physicians dislike beepers because they require us to stop what we are doing, look at the number displayed on the beeper, and call to see what the issue is.

For this reason, texting by cell phone has largely replaced audible pages. The pop-up display of Google Glass is a visual distraction rather than an audio one — it is more difficult to ignore. But it would be useful if the system could filter what gets through to the physician at any time, blocking out all but the truly critical information.

Dealing with sensitive patient data

Maximizing utility of Google Glass will require access to Patient Specific Information (PSI), such as the electronic medical record (EMR). This alone would be reason to strictly limit — if not prohibit — the use of Google Glass in the clinical environment unless it was user selective, or at the very least, password protected. If the glasses were tailored to physicians so that no one else could use them, this would ally concerns about unauthorized access to PSI and reduce theft.

Another suggestions would be to build apps for Glass that can recognize a patient. In that case, an authorized user, even a clinician, would not be able to retrieve information they should not have. To cite a specific case, a physician and a victim of assault were taken to a hospital. Hospital administrators could track exactly who accessed the patient’s record. Nearly 50 employees at that hospital were disciplined or discharged — it became apparent that they had accessed the medical record but were not involved in the patient’s care.

Google Glass has the potential to not only restrict general access to patient data, but also select what information can be viewed by that specific user.

Another good idea that never fulfills its potential?

The device must operate with sufficient speed to allow near instantaneous retrieval of information that typically involves huge files such as display of an x-ray or CT scan. Achieving this may be quite problematic in a wireless device.

Hospitals might need broader bandwidth and/or faster transmission times to accommodate the device.

The biggest problem with Google Glass is cost. If there isn’t a real advantage to the physician and to patient care, the expense of the device and modification of other systems that support it can’t be justified.

Google Glass has potential — but developers will need to work with physicians to build apps that can function in the clinical environment with all of its medical, biological, administrative and regulatory constraints. Otherwise, Google Glass will be just another good idea that never fulfilled its potential.

Paul B. Langevin MD. Cardio Thoracic Anesthesia, Critical Care MD at Hahnemann University Hospital and Associate Professor of Anesthesiology and Biomedical Engineering, Drexel University College of Medicine.  Global speaker, author, multiple patent-holder, and a medical consultant.

Top image via Augmedix

This is the latest in a series of VentureBeat stories about startup culture. This week, our reporter spent time with ZocDoc in New York, a stark contrast to several San Francisco startups we’ve covered.

New York City health startup ZocDoc is best known for helping Americans easily book doctor appointments online. That simple premise helps attract more than 2.5 million unique visitors to ZocDoc’s web and mobile apps each month.

ZocDoc’s appointment booking service (and extras like online check-in) is in more than 35 major metropolitan areas, and it covers 40 percent of the U.S. population. It doesn’t reveal its number of bookings or the number of doctors using the service, but a cursory look at listings in cities like Chicago or Boston shows hundreds of medical professionals, who each pay $300 a month to use ZocDoc.

But there’s a lot more happening inside ZocDoc that’s helping the company push forward. ZocDoc promotes a specific culture to attract the best employees and enable those workers to do their jobs effectively.

In the picture below, you can see the seven values ZocDoc focuses on promoting: “patients first, great people, speak up, own it, us before me, work hard, make work fun.”

“Health care is the biggest problem facing our generation,” CEO and founder Cyrus Massoumi told me. “To change that is very ambitious. … To accomplish it, we try to have ‘humble ambition’ or ‘hum-bition.’ And that permeates everything we do.”

After touring the office and talking with several ZocDoc employees, including Massoumi, I noticed a few ways that ZocDoc is creatively approaching problems like growing pains and subordinate employees. Here’s what I took away from the visit.

Source: Sean Ludwig/VentureBeat

The values ZocDoc emphasizes.

Great people

Recruiting has become one of ZocDoc’s the most pressing issues. ZocDoc has more than 400 employees in offices in New York, Phoenix, and India, and it plans to keep hiring like crazy to keep on growing. On top of revenue ZocDoc generates from its customers (doctors), it’s also tapping the $95 million in funding it has raised from DST Global, Goldman Sachs, Khosla Ventures, and others to keep the engines pumping. Its newest office is in the Phoenix area and the company claims it will hire more than 60 more people for that office alone before the end of 2013.

ZocDoc’s space in New York has gotten crowded enough that employees are now flooding over into the fourth floor of its SoHo-based building. (It also shares that building with other major NYC startups Foursquare and Thrillist.)

“We’ve been in the same space for three years, and we started out with a quarter of this floor,” Karsten Vagner, ZocDoc’s director of people and its third employee, told me.

A hallway in the New York ZocDoc office contains a row of seven rooms, all dedicated for interviewing new employees in person, by phone, or via Skype. When I viewed the office, the rooms were nearly empty, but multiple employees said that was unusual and on the majority of weekdays applicants fill most or all of the rooms.

Massoumi says he chiefly looks for people that will care about fostering the community of his workers, and he’s willing to look anywhere for these employees.

He uses a story to show how serious is about this. Early in ZocDoc’s history — about three years ago — he was visiting Chicago for business. At a pizza restaurant, Massoumi liked the waitress that was helping his group so much that he asked her to interview with ZocDoc. Massoumi said that she put customers first and dealt with their problems more effectively than most waitresses he’d ever seen, so he had to see if she’d come work for the company as its office manager.

“We hire for intrinsics over experience,” Massoumi said. “We need them to share our values more than anything else. … Every employee we have is better than the average employee.”

She is still ZocDoc’s office manager in New York.

Source: Sean Ludwig/VentureBeat

Mike from Monsters Inc. with a ZocDoc hat.

Speak up

Clearly, ZocDoc is trying hard to recruit and fill a lot of key roles. But to get those employees on board, Massoumi believes you have to give those recruits an unusual incentive: the freedom to tell bosses — sometimes loudly — that they are wrong.

“If you want the best people, you have empower them to speak their minds,” Massoumi said. “You can speak your mind here without your job being in jeopardy.”

The call to “speak up” is so prominent that people are criticized if they ever admit later to thinking another approach would have been better but did not say anything.

“Part of your job is to say what’s wrong,” Vagner said. “I don’t want people on my team who just nod along.”

Additionally, employees are able to book time with Massoumi to discuss issues or ideas. That’s made his schedule a bit hellish (it took more than two weeks for me to get him on the phone), but he cares about his employees’ thoughts enough that he’d rather be busy than not have the time to talk to them. “Office hours” sessions vary between 15 minutes up to two hours.

Massoumi also has an initiative to do lunch once a week with the newest New York employees. “I need to know every member of my team,” Massoumi said.

Staying lean

While employees speak their minds about things, something that they don’t question is the operation’s leanness. Even with the $95 million in funding, the company still acts like an early-stage startup.

ZocDoc makes employees share hotel rooms, pushes the boundaries of its office spaces, and only buys used furniture.

Massoumi illustrates this by telling me about the chair he has for guests in his office. The chair’s nickname is “Bouncy” and has a broken piece that makes it sink when people sit down in it.

“It’s been broken for four years,” Massoumi said. “It used to surprise people, but I think they’ve come to appreciate it.”

Source: Sean Ludwig/VentureBeat

Diet Coke cans stacked in a hallway.

Soda love

Outside of pushing values, another thing that seems to be helping fuel ZocDoc’s growth is the staff’s love of soda. Like many startups, caffeine helps drive employees who work long hours, but there seems to be a special affinity for the stuff; it’s a guilty pleasure among employees driven to make other people’s lives more healthy.

While water and coffee are the most popular employee drinks, the office is also well stocked on soda. When I toured the office, empty Diet Coke cans were stacked at the end of one hallway. I found it humorous that one of the most prominent health-tech startups consumes so much soda, and I pointed that out to Massoumi. (Admittedly, I’m a soda addict myself, so I wasn’t trying to judge.)

“We’re a health startup, I know, and we do our best to reflect a healthy lifestyle,” Massoumi said. “We do have one member of our exec team who drinks a lot of Diet Coke, but I haven’t had a drink of soda in 10 years.”

The company also offers beer and wine to employees on Fridays.

‘Unlimited vacation’

Finally, the last thing I took away from speaking with ZocDoc employees was the sense that they could actually take time off without getting a hard time from management. Startups have such a fierce mentality that taking time off can be a negative — and taking too much time off could get you fired.

“I think unlimited vacation is unusual, but it’s also valuable,” Massoumi said. “It taps into ownership. It’s our job at ZocDoc to improve health care in America, and our people understand that.”

ZocDoc head of communications Allison Braley took two-and-a-half week break in Sri Lanka when she started, senior PR manager Jessica Aptman just took a 10-day vacation to Taiwan, and Vagner said he recently took a two-week vacation to Fiji.

“I worked a lot to make sure everything was covered,” Vagner said. “There’s a clear expectation that you do your job and do it well. We believe taking time off doesn’t have to interfere with that.”

Check out more photos of ZocDoc’s office below.

All photos by Sean Ludwig/VentureBeat

Digital health incubator Rock Health released data today that shows an increase in funding for med-tech startups in the first quarter of 2013.

Thirty-seven health deals were valued at a total of $365 million, which is 35 percent higher than the first quarter of 2012, “suggesting that 2013 will be another record year for the digital health industry,” the blog post reads.

Rock Health cofounder Halle Tecco said the uptick in venture investment was matched by several acquisitions, including UnitedHealth Group’s buy-up of Humedica (a deal that was reportedly valued in the hundreds of millions). “The players seem to be especially heating up their M&A engines,” she said.

According to Rock Health, the largest and most notable deals of the quarter include:

• Healthcare data warehousing provider HealthCatalyst raised $41 million from Kaiser Permanente Ventures, Norwest Venture Partners, and Sequoia Capital
• Audax Health, led by a 23-year-old college dropout, raised $21 million from former Apple CEO John Sculley
• Kareo raised a $20.5 million sixth round to build out its medical office software
• Mobile health company PatientSafe Solutions raised a $20 million third round from Merck Global Health Innovation

What’s coming up in 2013? Tecco predicts a booming demand for wearable devices from companies like Jawbone, Misfit Wearables, MC10, and Basis. She said Fitbit has been shopping for a $30 million round, which was leaked to the press, but to her knowledge, the deal has not yet closed.

Remote patient monitoring is another rapidly-growing digital health market, which increased to $10.6 billion last year, according to a report by Kalorama Information. Rock Health points to a handful of startups that received funding this quarter, including Bam Labs, a sleep monitoring device placed under a mattress to detect movement and heart rate, and Independa, an independent living solution for the elderly.

Other areas to watch include personalized health and cloud-based electronic health records. On the other hand, bio-tech and medical device entrepreneurs are struggling to gain investment due to complex regulatory issues. Read more on Rock Health’s research here.

July 9-10, 2013
San Francisco, CA

Tickets On Sale Now

It was the first day of spring this week, and we’re excited to shake off that flu season in exchange for allergy season. Yay!

Investors are thinking along the same lines today, with two big deals in the health sector — one in genome chips that can read your DNA faster than ever before, and one in a company that is revolutionizing your wait at the doctor’s office.

Health tech is a big issue as machines, the cloud, and our bodies all move closer together. In fact, we think it’s such an important topic that we’ve built an entire conference around it.

For more funding news as it happens, subscribe to our Deals Channel feed. You can also follow VentureBeat on Twitter, @venturebeat, to view funding news as it’s published.

OneMedical gets $30M to bring high-quality healthcare to all Americans

Startup founders often make bold claims about disrupting entire industries. Dr. Tom X Lee is one such entrepreneur, but in this particular case, his company is already shaping the future of healthcare. Dr. Lee is the founder and CEO of One Medical Group, a chain of concierge primary care practices operating under the tagline, “The doctor’s office. Reinvented.” The company took on $30 million in sixth round of funding today. Read the full story on VentureBeat.

New Russian high-tech fund to invest up to $20M in startups across the globe

In a new illustration of the vibrant activity of the Moscow venture scene, Maxim Shekhovtsov and Alexander Zhurba – founders of TexDrive, one of the city’s largest startup accelerators – announced last week the creation of a fund dedicated primarily to IT projects in Russia and around the world. Read the full story on VentureBeat.

Genapsys raises $8.5M to sequence your genome on a cheap chip

While it’s remarkable that we can actually sequence entire genomes today, the process remains relatively expensive. Genapsys aims to change that with its Genius system-on-a-chip sequencing technology (above), which is significantly cheaper than the competition and offers dramatically faster turnaround times. The company revealed today it has raised $8.5 million of a $13.5 million round, according to an SEC filing. Read the full story on VentureBeat.

Decide.com scoops up $8M from Vulcan Capital & others to further combine ‘big data’ & shopping

Online shopping startup Decide.com has raised $8 million in its third round of funding so it can continue to help consumers find the best site and time to buy products using “big data.” Seattle-based Decide.com claims to sift through more than 230 terabytes of data to find the best-rated products from every major retailer in the United Sates. Maybe more importantly, it also uses that data to predict future prices on 1.6 million products so you can choose the best time to buy. Read the full story on VentureBeat.

RoboteX private security robots gets $2.06M backed by Peter Thiel

RoboteX, a California company building robots for “first responders,” has filled $2.06 million of a desired $5 million round of funding, according to a filing with the SEC. RoboteX was founded in 2007 and creates robots without the use of government funding. Its line of “Avatar” robots are meant to help with security, sometimes in situations that could be dangerous for humans. The website lists examples such as serving papers to a dangerous individual, entering hostage situation, patrolling, investigating suspicious packages, and more. Read the full story on VentureBeat.

Sneezing girl image via Shutterstock

The Senate has backed a repeal of a 2.3 percent tax on medical device makers that was enacted as part of Obamacare.

Silicon Valley’s health-technology entrepreneurs view this move as a step in the right direction, whether or not the bill passes.

“It could move forward and, more importantly represents how much the tax is disfavored,” said Practice Fusion‘s senior policy advisor Lauren Fifield. Practice Fusion is a San Francisco-based startup that has been keeping a watchful eye on hearings in Congress this week.

As VentureBeat reported, the Food and Drug Administration is under pressure to determine which “grey area” mobile medical apps should be regulated — and potentially taxed as medical devices.

“This may bode well for med mobile app developers — if the Senate is voting to repeal the tax for devices, there’s no way they’d support a tax on entrepreneurs,” said Fifield.

Happtique’s Ben Chodor was brought in to testify in Congress this week, and represent the voice of health entrepreneurs.

Chodor is outspokenly critical about the tax on medical devices, especially considering that it could prompt bio-tech and life science investors to look at international markets where tax rates are lower. “I think and believe they listened,” he said.

According to Politico, the language was included in an non-binding amendment to the budget resolution, meaning the tax will remain in place regardless of whether the resolution passes. But it does demonstrate growing bi-partisan opposition to the tax in the nation’s capital.

“The importance of this vote cannot be overstated,” said Utah Republican Sen. Orrin Hatch, who introduced the amendment. “For the first time, Democrats and Republicans have come together in recognizing how bad this tax is. We cannot stop here. We must continue the fight to get rid of this tax.”

As Newsmax points out, most of the Democrats who backed this Hatch amendment are from states that are home to numerous medical device-makers.

Practice Fusion provides free web-based health records to doctors, and now it’s expanding to serve the general public, too. The company has just acquired 100Plus, a mobile app maker that helps regular folks track the health impacts of their behavior.

The company won’t disclose the final sum, but did tell us that the acquisition was a combination of stock and cash.

100Plus’s mobile apps use analytics to show how minor behavioral changes like drinking a glass of water in the morning or walking to work can lead to a longer and healthier life. The startup’s first app demonstrated the impact of alcohol consumption on lifespan, and it launched at the SXSW conference in March.

This is Practice Fusion’s first major acquisition, but it has ample budget given that it raised $34 million in June. The relationship appears to be longstanding — Practice Fusion’s CEO Ryan Howard is listed as 100Plus’s cofounder on Crunchbase, and he provided a small amount of funding in the company’s early days.

In a recent interview at the San Francisco headquarters, Howard revealed that Practice Fusion plans to roll out consumer health products in the coming months, so the acquisition is in line with the broader strategy.

Practice Fusion is best known for its free web-based electronic health record (EHR) for doctors, which became big business in 2009 when Congress passed the Health Information Technology for Economic and Clinical Health Act, a mandate that pushes doctors to adopt an EHR by a fixed deadline of 2015.

The 100Plus apps will likely be rebranded, and the 100Plus team will be brought into the Practice Fusion fold.

The existing apps are an impressive technical feat, but it did not gain a strong foothold with consumers (it’s a similar story to design-focused health app maker Massive Health).

According to Practice Fusion’s associate vice president of corporate development Patrick Dugan, these insights should be made available to physicians. The goal is to keep doctors informed about a patient’s health in between visits. ”100Plus was interesting for us because they make it easy for people to engage with their health on a daily basis,” he said in an interview.

Chris Hogg, CEO and cofounder of 100Plus

Through the strategic acquisition, Practice Fusion will also gain an analytics expert in the form of 100Plus CEO Chris Hogg, who will assume a new role as the vice president of data science. “We were trying to make health feel like less of a chore,” Hogg told me, adding that in his new role he’ll “create a link between the doctor and patient between visits.”

Practice Fusion is accumulating a vast store of information about the patient experience, which may prove to be a valuable revenue stream. “We have more calendars, reviews about doctors, and records of visits than anyone else,” Howard told me.

The company has about 150,000 users, including doctors, nurses, and hospital admins, which accounts for about 6 percent of the addressable market.

100Plus was founded in 2011 and raised $750,000 in funding from Founders Fund, Greylock Partners, Felicis Ventures, and Band of Angels Acorn Fund, among others.

This is the latest in a series of stories about startup culture. This week, our reporter checked out Practice Fusion in San Francisco, a stark contrast to Twilio’s fast-paced work ethic, and Couchsurfing’s laid-back hippie culture.

If CEO Ryan Howard hadn’t been involved a serious motorcycle accident, Practice Fusion would have crashed and burned years ago.

Howard was knocking on investors’ doors to fund his free electronic health record (EHR) with little success. Doctors were reluctant to ditch paper-based systems, so it seemed to the VC crowd like the right idea at the wrong time.

But unwilling to admit defeat, he used cash from the settlement from his motorcycle accident to pay the salaries of three employees.

“We were going out of business, I needed two root canals, and I was in massive debt,” said Howard in an interview at the company’s sprawling San Francisco office. “I would define the period of 2005 to 2007 as me, in my pajamas, furiously working in my house.”

In 2009, Congress passed the Health Information Technology for Economic and Clinical Health Act. With the Obama administration committed to the proliferation of EHR’s, Practice Fusion caught the attention of a band of angels, including investor Peter Thiel, the managing partner of Founders Fund. Thiel recently declared: “Practice Fusion revolutionizes our interactions with the medical community, just as Facebook did for social networking.”

Thiel saw an opportunity to take advantage of a government mandate that push doctors to adopt an EHR. The fixed deadline is 2015 — after that, eligible health care providers who don’t comply will be penalized by CMS, the federal agency that administers Medicare and Medicaid.

With eligible doctors and hospitals receiving “meaningful use” checks for switching over to Practice Fusion’s free EMR,  it’s not a tough sell. Albert Santalo, the CEO of cloud-based EHR provider CareCloud, is a competitor but credited Practice Fusion for its “evangelist efforts” and creating ”greater awareness of EHR technology by doctors in general.”

With new investment, Practice Fusion stacked up its sales team, and grew 500 percent for two years in a row. Last year, according to Howard, it turned over “serious solid revenue,” primarily through advertising. It recently had to revise its expectations for 2013, as a few weeks into the new year, the sales team secured its first million dollar advertising deal with a major pharmaceutical company.

Practice Fusion has about 150,000 users, including doctors, nurses and hospital admin, which is about six percent of the addressable market. Howard sees an opportunity to make money through the fast-growing store of data. Stripped of any personally identifiable markers, patient information can be sold to pharmaceutical companies.

He responds to a question about potential privacy concerns by listing the positive outcomes from mining data about doctors and patients. “We can recommend drug therapies based on their popularity [with previous patients],” he said, and claims there are 200,000 avoidable deaths a year because “data is simply not shared.”

This is in sharp contrast to online health portal WebMD, which is struggling to conserve its relationships with big pharma and recently laid off 14 percent of its staff. In its seven years, Practice Fusion has grown to over 250 employees, and has about 20 job openings.

What’s the culture like?

Employees at Practice Fusion’s office in downtown San Francisco are reminded every day about the sheer fluke that led to the startup’s existence.

“A great leader has to be vulnerable,” Howard explained. Photographs and news clippings from Practice Fusion’s past adorn the walls. I even saw a fading Starbucks napkin, a souvenir from the founding team’s first “office.”

The well-funded startup is in full hiring mode, but it’s looking for a specific type of employee to add to its team.

It may seem counter-intuitive, but the ideal job candidate, according to Howard, has little or no health care experience. In his view, employees that have worked in the industry for too long as less inclined to dream up big ideas, and the “unlearning” process takes too long.

Practice Fusion is looking for high-achievers, but it’s important to Howard that employees are “happy and healthy,” and fit in with the culture. During a walk through the company’s offices (his dog trailing behind), he told me about a seriously talented engineer who was recently asked to leave as he didn’t get on with the team.

New employees undergo an extensive training process, which involves several weeks of education on a range of relevant health care topics, such as meaningful use, billing, and the regulatory issues facing big pharma. Similar to larger companies like Google, Practice Fusion emphasizes professional development, and mentors assigned to junior-level employees ensure that they meet goals.

High-performing employees have the freedom to try their hand at roles in different departments — one staff member I met started out in the call center (this team cold-calls doctors to inform them about the free EMR) and later shifted into product.

Word of warning: If you love to pig out on cookies and soda, Practice Fusion is probably not for you. The kitchen is fully stocked with healthy and organic food, and it has no carbonated drinks.

“I believe you should be emotionally and physically at your best,” explained Howard, who also insisted on offering free weekly yoga and soccer classes for the staff. This focus on balance means the startup has been able to retain talent through its ups and downs.

In a recent end-of-year report from RockHealth and Interwest Partners, survey respondents predicted that Practice Fusion would be the most likely digital health company to IPO in 2013. The company raised a massive $34 million in venture funding in June.

For those that stayed loyal to the company from its early days, the bet is about to pay off.

What are the best perks?

• Healthy meals: Food is catered every day, and Practice Fusion has a fully stocked kitchen with delicious treats. From time to time, the company will invite nutritionists to meet the staff and discuss healthy eating plans. 
• Fitness opportunities: New employees receive a FitBit to help them track activity levels throughout the day. In addition, a weekly yoga class takes place in the office, and everyone may have a discounted gym membership.
• Computer science classes: Employees that want to bolster their mobile development or Excel skills can enroll for free in any of Academy X’s classes.
• Dog-friendly office: Howard is rarely seen without his trusty sidekick.
• Work/life balance: Employees receive four weeks of PTO per year, in addition to the standard vacation time.

Hiring?

• You betcha. Practice Fusion has openings in almost all its departments at a variety of levels. The fast-growing startup is currently hiring in legal, finance, operations, product design, engineering and more. 

“Startup culture” is a new series that highlights what it’s really like to work at a Bay Area startup. Please send your suggestions for the most rockin’ office spaces, startup happy hours, or company perks via email (christina@venturebeat.com) or Twitter (@chrissyfarr). 

July 9-10, 2013
San Francisco, CA

Tickets On Sale Now

Health care software and cloud solutions company Recondo Technology has received a $20 million investment from Bregal Sagemount to accelerate its growth in the booming medical sector.

Greenwood Village, Co.-based Recondo Technology provides all kinds of software and services, including payments, insurance verification, and revenue recovery, to more than 450 U.S. hospitals. During its fiscal year 2012, the company claimed to increase revenue by 94 percent.

“This investment will be used to significantly expand our sales and marketing efforts, take client service to a new level, and broaden our product offerings through internal development and strategic merger and acquisition (M&A) opportunities,” Recondo CEO Rick Adam said in a statement.

Phil Yates, a founding partner of Bregal Sagemount, and Pavan Tripathi, a senior associate, will join the Recondo’s board of directors.

Hospital reception via Monkey Business Images/Shutterstock

This year, Silicon Valley had a few big moments of clarity and cooperation between entrepreneurs and digitally-savvy patients and doctors.

Outraged by the healthcare industry’s slow adoption of digital systems, some tech entrepreneurs questioned whether doctors could be replaced by machines altogether. Vinod Khosla likened modern medicine to witchcraft, and IBM supercomputer Watson was set to work to help oncologists treat cancer patients at Sloan-Kettering.

Encouraged by “meaningful use” incentives, healthcare providers and hospitals finally embraced the cloud. In 2012, 72 percent of office-based physicians used electronic medical record or electronic health record (EMR/EHR) systems, up from 48 percent in 2009.

To empower patients to monitor and track their health, entrepreneurs produced some seriously cool hardware: one Cambridge, Mass. startup developed an under-helmet skullcap that alerts a nearby physician when an athlete’s collision is potentially dangerous. Another created a biosensor that uses an iPhone or iPad camera to provide touch free heart rate measurements. MIT researchers produced Bandu, a small wristwatch-like device that will monitor the body for signs of stress then take steps to counteract it.

Many of these entrepreneurs were supported by venture capital firms for the first time. Venture investment in digital health grew by 43 percent year over year, according to a soon-to-be released report from Rock Health.

With so much activity in this space, VentureBeat sat down with Nate Gross, cofounder of Rock Health and doctors’ social network Doximity, to compile a list of the ten biggest health-tech stories that shocked and amazed us this year.

10. Scanadu brings vitals home

Scanadu recently unveiled three devices that can be used at home to monitor and track your vitals. One of them, Scout, is a sensor that people hold up to their temple; in less than ten seconds, it will collect data on pulse, heart rate, electrical heart activity, temperature, heart rate variability, and blood oxygenation. The device should be available by the end of 2013 for $150. The company’s founding team includes Walter De Brouwer, an academic and founder of TEDGlobal. De Brouwer was inspired to start the company after his son suffered a brain trauma and was hospitalized for a year.

The story: “‘People can get access information about health and connect to each other about health, but the piece that is missing is that people can’t get information about their own body,’ said De Brouwer. ‘By getting precision diagnostics into the hands of people, this can enable them to get early detection and to inform their conversations with their doctor in the ways that haven’t been possible.’

9. The rise of Practice Fusion

Practice Fusion, a provider of free, web-based EHRs, experienced a meteoric rise this year. It was no overnight success. The company launched in 2005, when there were few incentives for doctors to abandon paper-based systems. Company spokesperson Emily Peters said the stimulus plan and government investment in health IT kept them from going out of business during the economic recession. When Practice Fusion’s users (around 50 percent are doctors) started to receive meaningful use checks in March or April this year to adopt and use an EHR, the technology took off.

“This is the year we went from being the scrappy startup to a big deal” said Peters. A survey conducted by InterWest partners found Practice Fusion is considered the most likely EHR company to go public, followed by ZocDoc and Castlight. In July, the company raised $34 million at a valuation of $500 million, up from $100 million in its previous financing round.

The story: ”‘Ninety percent of doctors do have a computerized billing system, but 90 percent of doctors don’t have an electronic medical records system,’ said Practice Fusion CEO and cofounder Ryan Howard. ‘That means the focus is on getting paid, not on healthcare.’”

8. VCs open their checkbooks

Venture capital investment in med tech and health IT skyrocketed this year. According to Rock Health’s survey, 135 digital health companies raised more than $2 million in funding. Among the 177 investors that poured funds into these companies, roughly 10 percent are completely new to the space (based on a sample from a single quarter). Why this surge in interest? Morganthaler, the venture firm that invested in Doximity and Practice Fusion among others, saw it coming.

“As the requirements under both the HITECH Act and the Affordable Care Act [Obamacare] continue to roll out, there will be additional opportunities for startups in healthcare,” said Rebecca Lynn, a health-tech focused partner at Morganthaler. These acts change the incentives in healthcare with both a carrot and a stick. She explained, “As the incentives change, payors and providers will need to adopt new technologies provided by these startups to be efficiently compliant and competitive.”

In recent months, angel investors also stepped up their investment in health tech, in part due to partnerships like SecondMarket’s with Startup Health.

The story: ”‘Our members might be interested [in health tech] from a macro perspective, but they don’t feel comfortable enough to deploy capital,’” said Jeremy Smith, SecondMarket’s CSO. SecondMarket’s investors are encouraged to pour thousands of dollars into promising health tech startups as well as Startup Health’s new fund. According to a document available to SecondMarket’s network of accredited investors, Startup Health is building up a $7.5 million Innovation Fund to support up to 100 digital health and wellness startups.”

7. Health tech incubators proliferate

A growing number of startup accelerator programs this year specialized in digital health. Nike+ launched its accelerator in partnership with TechStars to encourage developers to build health and fitness applications. This year, the New York Digital Health Accelerator, a program with an initial investment of $4.2 million, also announced its inaugural class. This is indicative of two things: increasing venture capital investment in the space and a booming interest among entrepreneurs.

The story: “The catch: all the products these companies create will have to use the Nike+ platform and/or NikeFuel ‘to build offerings that inspire and assist people to live more active, healthy lifestyles.’”

6. The steady move to the cloud

By 2014, Obamacare mandates hospitals and practitioners with paper records switch to electronic medical records. It will not be a simple transition. However, physicians see the benefits of storing health records in the cloud, which makes it cheaper and faster to organize massive amounts of information. At Seattle’s Children Hospital, in one notable case, researchers were able to work with a huge amount of data to identify patients whose cells looked similar, and identify a rare bone disease called craniosynostosis.

The story: “‘The healthcare industry is fragmented, complex and paper-based,’ said Darin Brannan, president and CEO of ClearDATA, a provider of cloud computing services. In 2012, that began to change with the major shift toward web-based EMR technology.”

5. The Allscripts drama

One-time high flyer Allscripts seemed poised for success, given the EHR boom due to government stimuli. But the company landed in a steaming pile of drama in April after its chairman was fired in a board dispute and three directors resigned in protest. With shares plummeting, the Chicago-based company announced it would bring on a new CEO lured from its rival, Cerner. Then, the company experienced a sales slowdown when customers tried to upgrade to a new product — one that would actually let their doctors’ offices and hospitals share digital patient records.

The story: “The lesson for up-and-coming health IT vendors? ‘The meltdown showcased the rocky transition our sector is going through trying to get legacy vendors to quickly adapt to a changing marketplace and regulatory pressure,’ said Peters of Practice Fusion.

4. Human genome sequencing hits $1000

The quest to harness the potential of human DNA for the purposes of diagnostics and drug treatment hit a major threshold in January 2012: the thousand-dollar genome. Carslbad, Calif.-based Life Technologies introduced a machine to map an individual’s genetic makeup. The news inspired entrepreneurs to harness this data, banishing a one-size-fits-all approach to medicine.

The story: ”‘Every disease has a genetic component, and yet largely none of the available genetic information is being used today to treat patients,’ said Dr. Dietrich Stephan, cofounder of Navigenics. ’With the knowledge we have now about your genes, we are finding ways to diagnose sick people earlier and develop medicines to zap the core defect.’”

3. Khosla made THAT prediction

Tehc luminary Vinod Khosla declared at the Rock Health Innovation Summit that medicine is not so disimilar to witchcraft. The entrepreneur, who made his mark during the dot-com boom, said that machines driven by large data sets and computations power would be better for patients than the average physician and imagined a doctor-free future. Needless to say, this went over great with the medical community.

The story: “‘Eventually, we won’t need the doctor,’ said Khosla. Columbia University-trained doctor Bijan Salehizadeh was one of many critics who vocalized resistance, responding that he was ‘nauseated’ by Khosla’s remarks.”

2. Amazon unveils its free genetic database

Armed with data, developers with little or no medical training can help determine the underlying genetic cause for some of the most common diseases. Amazon’s cloud computing unit, Amazon Web Services, announced in March it would store for public use the entire contents of the National Institutes of Health’s 1000 Genomes Project, a survey of genetic information around 200 terabytes in size.

Developers can freely access the system and can choose whether or not to share their research. The people in the study consented to have their data made public, and there is no personal information linked to their genetic data.

The story: “‘It’s the only public data set like this,’ Lisa D. Brooks, program director for the Genetic Variation Program of the National Human Genome Research Institute. ‘It is an almost complete set of human genetic variants.”

1. Healthcare reaches government

Todd Park, cofounder of health IT juggernauts Athenahealth and Castlight, was promoted from CTO of the Department of Health and Human Services to CTO of the United States.

With this executive appointment, med tech entrepreneurs gained a powerful new ally. Park was instrumental in launching the Presidential Innovation Fellows program, which invites innovators from outside government to work with the powers that be to solve socio-economic problems, particularly those facing health providers and hospitals. It should come as no surprise that one of the fellowships was awarded to a team building tech to enable millions of Americans to easily and securely download their own health information electronically.

The story: “‘We have an opportunity to make this country shine,’ Park said. The government’s official document on its Digital Government Strategy broadly sets out to ‘ensure that as the government adjusts to this new digital world, we seize the opportunity to procure and manage devices, applications, and data in smart, secure and affordable ways.’”

Image credits: lenetstan/Shutterstock, JCD/Shutterstock, Maria Ly/Flickr

New York health tech startup ZocDoc will soon open its second office in Phoenix, a city not usually known for attracting startups the way San Francisco, Boston, or Chicago does.

ZocDoc helps digitally connect patients with doctors for all kinds for appointments. As with all things medical, the service needs high-quality customer service and support. This was the thinking behind Phoenix — the city is geographically distant from its NYC headquarters and is isolated from most extreme weather events. When NYC was threatened by Hurricane Irene, ZocDoc had to create a pop-up office in Chicago for customer service in case the HQ lost power or would be without power for days.

“Many companies may look at the Bay Area, where people try to attract engineers, but this is for customer service and sales,” ZocDoc director of communications Allison Braley told us. “We want better customer service coverage and it’s an untapped place in a sense.”

Braley admits that it’s a little strange to see a quickly growing 320-person startup like ZocDoc pick Phoenix for its second office, but the company especially liked the weather and proximity to universities to find talent. Phoenix also offers many emerging private companies to pluck talent from, as listed in the Inc 5000.

“For tech companies of our size, it is a bit unusual, but it made sense for us,” Braley said. “We only have a few employees there now, but we’ll add many more as we scale and grow.”

ZocDoc has raised about $95 million so far, including a large $50 million round last year from DST Global.