AccuVein Wows Investors With Device That Prevents Extra Needle Sticks
Virtually everyone who’s ever had a blood test has experienced this nightmare at least once: Prick, no vein, prick, still no vein, prick … those are all the extra needle sticks that happen when a nurse or other medical professional can’t find a vein to draw blood or insert an IV. The desire to prevent those painful jabs inspired a company, AccuVein, which started up in Cold Spring Harbor, NY, in 2007 and invented a tool that literally illuminates veins, so the caregivers who need to find them can do so on the first try.
On July 28, AccuVein raised $22 million in a Series B funding round that was led by MVM Life Sciences Partners and Bessemer Venture Partners. The company had previously raised an undisclosed amount from private individuals, says AccuVein’s founder and CEO, Ron Goldman. That was enough to build the product and get it into 750 hospitals in the U.S. The new capital, says Goldman, “will be used primarily to build out the sales team and acquire distribution partners overseas.”
AccuVein is based on a simple concept: Human blood absorbs infrared light, making blood vessels easily visible. “We detect with infrared light, then paint the arm with red light,” Goldman says. That causes the veins that would otherwise be concealed by skin to show up clearly on the surface. AccuVein’s product, called the AV300, is a handheld device that can be used in hospitals, or in mobile settings such as ambulances or military battlefields.
But Goldman wasn’t the first to hit upon the idea of illuminating veins—and that caused a dispute that put AccuVein’s future in question. In 2008, Memphis-based Luminetx filed a patent-infringement lawsuit against AccuVein. Luminetx also markets an infrared vein illuminator, though its device is a larger, standing unit. The two companies settled in 2009. Goldman, who has a background in engineering and intellectual-property law, won’t reveal the details of the settlement, except to say that AccuVein has an “irrevocable license” to market the AV300.
With hospital budgets tight and the healthcare system facing increasing pressure to cut costs under health reform, that marketing task is only getting more challenging for AccuVein. The company’s biggest competitor isn’t another device, Goldman says, but rather the status quo—all that pricking to find the wayward vein. So AccuVein has collected return-on-investment figures from its existing clients and used them to develop a calculator that any facility can use to determine whether it’s worth it to them to buy the device.
Goldman argues that the status quo is the more expensive option. “When you miss a vein, bad things happen,” he says. “The costs escalate.” That’s because specialists sometimes have to be brought in to insert catheters into patients whose veins are hard to find. “The cost can be $500 to $1,200 per patient,” Goldman says. The AV300 has a pricetag of $4,500. So even if a catheter procedure only costs $300 and the AV300 prevents just one such procedure per week, the device will pay for itself in about four months, AccuVein contends in a case study on its website.
Goldman adds that there may be intangible benefits, as well. “If you bruise a patient trying to find a vein, the patient ends up dissatisfied,” he says. “Patient satisfaction is becoming an important measure in healthcare.”
In addition to selling to U.S. hospitals, AccuVein is now marketing its device in 80 countries. But Goldman says the overall market is still largely untapped. “The need for vascular illumination is everywhere,” he says. “It’s important to be able to get that needle in, whether you’re on the battlefield or in an ambulance or working in home healthcare.”
Having MVM and Bessemer on board as funding sources will be critical, Goldman says, because both companies have experience managing startups through periods of rapid growth. MVM has invested in a number of medical-device companies, including Vascular Pathways and Solx. Bessemer has also been a player in the space, and in 1999 it sold two of its medical device companies—Endonetics and TransVascular—to Medtronic. “Their focus and expertise in healthcare is critical to us,” Goldman says.
AccuVein will invest some of the new money in developing other applications for its technology, Goldman says. The company has built a strong patent portfolio, which is focused not just on making veins easier to see, but on other medical uses that are too early to reveal, he says. “A lot of it is around illumination,” he says. “We’re making the invisible visible.”