The Back Story to Keona Health's $2.5 Million Round
An entrepreneur's journey from Burma to Chapel Hill to revolutionize triage with technology
BY LAURA BAVERMAN
Filed Under: NEWS: Startups
Keona Health is rolling in two months since it landed $2.5 million from a strategic investor and began testing its triage software platform in hospitals and doctors' offices in the Triangle and beyond.
But sit down with founder Oakkar Oakkar, and you'll learn a fascinating back story of more than five years of planning, persistence, passion and scrappiness that it took to win over investors and get on today's path toward revolutionizing the way the medical industry handles inbound calls from sick patients.
Here's my attempt to tell it:
Oakkar grew up in Burma (a nation just west of Thailand) into a political family, and was sent to college in Hawaii to avoid conflict happening in the country.
It was while surfing that he met a mentor who would inspire his career. A consultant for hospitals at Stanford University and Harvard shared with him the challenges of building and launching information systems that make hospitals more efficient. A software developer by trade and co-founder of a business building applications for people in the healthcare and real estate tourism businesses, Oakkar became interested in the field of health informatics.
An eye-opening experience seeking health advice in Hawaii helped him determine a specific path for that interest. When his nose started bleeding uncontrollably—something he'd never experienced before—he called every hospital in town and never reached a person. Then he sat in an ER for six hours before a nurse determined he just wasn't used to the dryness in Hawaii. He paid $650.
“The front door to the healthcare system is broken,” Oakkar says. “Not just in the ER but it's a problem for primary care and any specialist. The telephone calls are the big problem in our health.”
Additional research revealed some alarming statistics. The average 20-physician practice in the U.S. receives more than 150,000 phone calls a year, 20-80 voice messages per hour, and those are calls offices are not reimbursed by insurance or patients to take. And patients either waste time on the phone when they could be getting treated, or they wait for answers that are sometimes very simple and easy-to-treat.
Oakkar thought he could build a software platform that thwarted the inbound calls and the unnecessary ER visits.
Building a business in Chapel Hill
He'd have that opportunity in Chapel Hill, where his now-wife, then-girlfriend had been accepted to University of North Carolina's global public health program. He joined her and won a sweet deal with UNC to develop his triage management idea with help from the new Carolina Health Informatics Program (CHIP). He could apply for National Institutes of Health grants and customize his own master's degree if he agreed to spin out his company from the university. He brought on three co-founders; his former co-founder Jimmy Kaanapu joined him in Chapel Hill as chief technology officer, Duke MBA Stephen Dean became chief operating officer, and CHIP Director and Professor Javed Mostafa signed on as an advisor.
“It was exactly what I needed and everything I learned, I could actually spin into a company,” Oakkar says.
NIH agreed to provide $165,000 for work on the product in 2011. And NC IDEA provided Keona one of its $50,000 grants. Oakkar joined the first class when the Launch Chapel Hill incubator opened in 2013.
But more work was required, and funding was difficult to secure, so Oakkar's mentors Jim Kitchen, a UNC professor and Launch Chapel Hill advisor, and Ted Zoller, the director of the Center for Entrepreneurial Studies at UNC, led a $500,000 round of investment that funded Keona up until the strategic investor came on board.
Kitchen invested for two reasons. Because Oakkar represented the type of young, capable entrepreneur coming out of UNC that Chapel Hill wanted to support and build up, and Kitchen believed the market was ready for Keona. Equal parts jockey and horse, he says.
“He recognized a really great opportunity and was able to execute on it so far,” Kitchen says. “There are a lot of disruptive things they can do with that company.”
Keona Health became the first Launch Chapel Hill company to graduate and move on to its own office space in Chapel Hill, fulfilling the community's vision to grow an entrepreneurial ecosystem.
Why it's changing the way patients communicate with doctors
So what is the power of Keona?
Oakkar says it's two-fold. It allows patients an easy online and mobile platform for reporting health problems, and a guaranteed response within 10 or 15 minutes. The software collects symptoms and compares them with data from an individual's electronic medical records. It asks intelligent questions based on the problem, using data and research from medical journals. And it offers personalized care recommendations and detailed information so patients can educate themselves on their condition prior to a doctor's visit.
For nurses and doctors, it notifies of new entries and integrates with calendaring systems to automatically books appointment.
A Keona case study shows that the software can cut the triage time in half.
Keona is already bringing in some revenue. The OBGYN, campus health and family medicine clinics at UNC are using the platform. Tulane University, Chapel Hill Children's Clinic, Goldsboro Pediatrics and University of Wyoming family medicine are clients. There are discussions underway with Cleveland Clinic, St. Francis Health in Connecticut and Duke Health, any of which would get Keona on the radar of the rest of the healthcare industry.
Oakkar's greatest challenge is building scale around the platform, Kitchen says. Discussions with hospitals can take six to 12 months. Oakkar will have to hire a sales team and translate the successes Keona is having with local hospitals and clinics nationally in a quick and compelling way to help them make decisions and get up and running faster, Kitchen says.
Already, Keona is fully integrated with five of the major electronics health records (EHR) providers, and soon will be available on their marketplaces (similar to Amazon Web Services but for the medical industry). Its already a top-rated application in the Allscripts marketplace and in August 2013, Keona won Allscripts Open App Challenge and $100,000. Next year, Keona will add the remainder of the top 10 EHR companies. That will let onboarding happen faster for their clients.
“Our goal is for smaller practices to come to our site and provide the practice's information and we can enable our services in a self-service way,” Oakkar says. “But we're not there yet.”
Strategic investor opens new opportunities
After Kitchen and Zoller's initial investments, and others from family and friends, Oakkar had a choice of Series A funders. The strategic investor, who Oakkar has agreed not to reveal, offered a new line of business for Keona. It will provide access to a series of call centers for the healthcare industry that handle after-hours calls on behalf of hospitals and practices.
Today, many of those centers fax communications from off-hours to practices each morning, Oakkar says. It's a time and labor-intensive task that could be automated with Keona's system.
“If we do that, we're connected to the patient, provider and call center,” he says. “Once we hit that, then it's jackpot. We own the space.”
That might seem like a bold statement considering the influx of startups into the healthcare industry. Oakkar admits it's a crowded space. There are many companies offering tele- or video-medicine tools. But most of those connect patients with an on-call doctor versus their own. Oakkar believes the value of Keona is in its ability to more quickly connect patients with their own providers. The Affordable Care Act will only grow the need for more automation in the doctors' office—20 million new patients are expected to enter the pool.
That's at least a $2 billion opportunity for Keona, he says.
Keona's goal by April 2015 is to reach a revenue of $1 million, and by 2017, $12 million. Oakkar has eight people on the team today, and will hire at least three in the next year. He's looking for developers, customer success managers, clinical informatics experts and salespeople.
Hires could happen faster. When he pitches the right person on Keona, a sale seems to happen like magic, Oakkar says.
“What we hear from clients is that this is a solution they've been looking for forever,” he says. “'Where have you been?' We hear that all the time.”
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