Editor’s note: This is the 14th in a series of profiles of companies selected to present at Venture 2003 earlier this week.As the health care market grows, so do the number of payments and risks of fraud.
Capitalizing on the opportunity and cracking down on abuse of the healthcare system is Bloodhound Software. The firm, which started in 1997 and has drawn funding from a wide range of prestigious investors, expects to reach profitability in the third quarter of this year.
Should Bloodhound raise another round of financing, chief financial officer Dave Neal believes the company can capitalize by going after additional vertical markets.
“Bloodhound’s target market includes managed care organizations, insurers, third party administrators, self-insured entities and other health care payers,” Neal tells Local Tech Wire. “These payers receive claims for payment of many types of medical claims. Bloodhound’s three top markets (Professional claims-$319 million, Facilities claims-$335 million, Pharmacy claims $126 million) represent a $780 million a year opportunity that is growing at 17 percent annually.”
As it did a year ago, Local Tech Wire is featuring in-depth profiles of presenting firms for Venture 2003 built around a Q&A with a company executive as well as a Fact Box of important information. One profile will appear each day.
LTW put together a Q&A designed to not only produce facts about the presenters but also to give each a chance to state the case for venture capitalists to invest.
Answers for Bloodhound were provided by Neal.
Venture 2003 took place earlier this week in Chapel Hill. (Previous profiles – Engineous, Hemocelluar, Elsinore, Gentris, A4, SmartPath, Dynogen, ViASIC, Norak, Kucera, Micell, MindValve and Regado can be found in LTW archives under Executive Q&A category.)
Times are tough. If you had only one chance and one paragraph to convince an investor, how would you answer this question: “Why should an investor choose your company?”
We are on the verge of profitability and are poised for growth in 2003. We serve a market that is almost $800 million in size and is growing at 17% per year. Our ASP solution is the most effective method for payers of medical claims to ensure that they are paying claims correctly per contract.
What is the “pain point” (or points) you address for your customers?
Our customers do not have the internal capability to insure that they are paying the correct amount on claims that are submitted to them. Bloodhound provides them with the ability to improve their financial results by insuring that they pay only what they are obligated to pay by contract.
What makes your company unique? Do you have a proprietary and/or a patented technology? Please explain why it is unique and what the status is of any patent filings.
Bloodhound uses various trade secrets in the performance of its services and takes appropriate steps to protect these trade secrets. The company reviews its development work on a quarterly basis to identify patentable technology.
What makes your product(s) and/or services unique vs. your competition? (Who is your competition, and what do they offer?) If you have no competition, why not?
Bloodhound clients choose us because our product is easier to implement and maintain. We also offer a historical repository of data. Our ClaimsGuard product is based on an open system that gives customers the means to justify claim payment decisions though Web-based rule defense tools. We find significant additional savings for our clients through an easily customizable rules engine.
McKesson is the established player in our industry. McKesson offers an installed software solution to customers. The other two competitors in our industry are iHealth and Intelliclaim.
Does your company already generate revenue?
Bloodhound expects to reach profitability during Q3 2003.
What is your target market? What is the size of that market in terms of dollars? What share of that market do you believe you can win?
Bloodhound’s target market includes managed care organizations, insurers, third party administrators, self-insured entities and other health care payers. These payers receive claims for payment of many types of medical claims. Bloodhound’s three top markets (Professional claims-$319 million, Facilities claims-$335 million, Pharmacy claims $126 million) represent a $780 million a year opportunity that is growing at 17% annually.
What will you do with the invested funds? What is the timeline for product delivery? If you have existing products and services, how will additional funding help you expand your company, if that is the intention, or will you develop new products?
Bloodhound will use new capital to accelerate its growth into adjacent vertical markets including facilities claims and pharmacy claims.
What do you want from an investor other than money?
Board level connections to expand our network of key contacts.
Why will investors be impressed with your management team?
Bloodhound is led by Gary Twigg, who started a similar business and grew it to $77 million in annual revenues. Other members of the executive team provide significant technical capability, health care experience and experience with venture-backed startups.
What is the exit strategy for the investor from your company?
Bloodhound is being managed to take advantage of any type of exit opportunity that might be part of its future.
Just the Facts on Bloodhound: www.localtechwire.com/article.cfm?u=3949