When Propeller Health’s founders initially tried to raise funding for their new healthcare technology venture, many of the investors they spoke with were hesitant to take the risk.
It was the early part of this decade, and Propeller was navigating the FDA’s regulatory process for medical devices. The company believed it had a chance to become one of the first to earn market clearance from the agency for a software product, says Propeller co-founder and CEO David Van Sickle. Propeller’s idea for a so-called “digital therapeutic” involved equipping prescription inhalers with sensors and an Internet connection. That way, patients with asthma or chronic obstructive pulmonary disease could more easily track and analyze their inhaler use on an accompanying mobile app and other software.
Startups whose products have a hardware component often face higher costs and unique challenges, and at the time, investors weren’t sure how the FDA would approach the review of Propeller’s product, Van Sickle says.
“It was a very early time for digital health,” he recalls in a phone interview last week. “There was a lot more perceived risk around what we were trying to do. … It took work to find investors who were willing to bet on that approach and [our] team to get that done.”
Van Sickle says Madison, WI-based Propeller was able to score outside seed money from Wisconsin angel investor Jeff Rusinow; Mitch Kapor, the Bay Area-based startup investor who founded tech firm Lotus; and retail pharmacy chain Walgreens. Their early money helped Propeller develop and test its technology. In 2012, it gained FDA clearance to begin selling its first product. Read the full story here.