PockeHealth Secures $45-Million CAD Series B for Continued North American Expansion and AI Advancement

Eight years ago, PocketHealth embarked on a mission to revolutionize how patients and healthcare providers access and exchange diagnostic images, aiming to replace outdated methods like CD-ROMs and legacy systems. Fast forward to today, the Toronto-based startup has transformed the landscape with its innovative software, empowering over 1.5 million individuals at more than 650 hospitals and imaging centers across North America. Not only does PocketHealth’s platform grant patients control over their medical images, but it also leverages artificial intelligence (AI) to assist them in interpreting and understanding these crucial images.

Since closing its Series A round, PocketHealth has shifted its focus towards reaching every patient and provider in North America. Over the past two years, the company has undergone significant product evolution, introducing new AI-powered tools aimed at enhancing patient understanding of medical images and enabling providers to operate more efficiently while improving patient engagement and retention. PocketHealth has also expanded its presence across the United States.

With a fresh injection of $45 million CAD ($33 million USD) in Series B funding, PocketHealth is poised to continue investing in AI, product development, and expansion efforts across Canada and the US. To support these initiatives, the startup plans to double its current workforce of 110 employees within the next two years.

PocketHealth’s co-founder and CEO, Rishi Nayyar, expressed the company’s ambitious goal to become ubiquitous in North America’s healthcare landscape, emphasizing the absence of significant competition in solving the challenges PocketHealth addresses. The all-equity Series B round, led by Round13 Capital, also saw participation from new investors Deloitte Ventures and Samsung Next, as well as existing backers Questa Capital and Radical Ventures, bringing PocketHealth’s total equity funding to $75 million CAD.

PocketHealth’s app empowers patients to securely access, store, and analyze their medical image records, encompassing X-rays, ultrasounds, CT scans, and MRIs, and facilitates sharing with healthcare providers. Founded by Rishi Nayyar, formerly of Citigroup, and his brother Harsh Nayyar, a former Google software engineer serving as PocketHealth’s CTO, the startup positions itself as the “world’s first patient-centric image-sharing platform.”Round13, a Toronto-based venture capital firm, was drawn to PocketHealth’s patient-centric approach and utilization of AI within Canadian healthcare. Miranda Ferris, a principal at Round13 who is joining PocketHealth’s board, expressed admiration for the startup’s management team and business achievements.

According to Brahm Klar, managing partner at Round13, the Series B financing was structured with “completely clean terms” and no specific structure. Although the exact valuation of PocketHealth following the Series B round was not disclosed, Klar indicated that it commanded a “significant premium” compared to its previous $20 million Series A funding, despite challenging market conditions. While Rishi Nayyar did not disclose details regarding secondary capital, Klar emphasized that the Series B round was primarily aimed at fueling growth.

Klar commended PocketHealth for its impressive market position in Canada and its successful expansion into the US market. He highlighted the startup’s prudent approach to balancing growth and sustainability, which aligns with Round13’s objectives of supporting PocketHealth’s scaling efforts.From the outset, the Nayyar brothers have demonstrated pragmatism and logic in steering PocketHealth’s trajectory, with a focus on long-term success irrespective of market conditions. Ferris praised their strategic financing approach and disciplined cash management, noting that PocketHealth operated on bootstrapped funds for its initial four years.

Unlike many Canadian tech companies, PocketHealth has never resorted to layoffs or cost rationalization due to macroeconomic conditions, according to Rishi Nayyar. During the venture capital surge, Nayyar asserted that PocketHealth adopted a more cautious approach to hiring compared to its counterparts. Sustainability has been ingrained in PocketHealth’s ethos since its bootstrapping phase, particularly because it offers what Harsh Nayyar described as “an essential service.”

Rishi Nayyar emphasized that PocketHealth remains focused on the healthcare market rather than being influenced by broader tech industry trends. He highlighted the challenging landscape of the US healthcare market in recent years, characterized by ongoing labor shortages and reduced COVID-19-related spending. According to Nayyar, healthcare providers have raised their expectations for new technology solutions, favoring comprehensive platforms over single-point solutions.

PocketHealth anticipated this shift and invested in developing its platform into more than just a “one-trick pony” or a mere “widget.” This strategic decision has yielded positive results, with strong customer retention and significant growth metrics. While Nayyar declined to disclose specific revenue figures, he noted a threefold increase in monthly patient sign-ups year over year and the addition of over 100 hospitals and imaging centers to PocketHealth’s network in the past 12 months, despite challenging market conditions.