After less than a year in business, mPulse Mobile Inc. in Encino has raised close to $12 million in venture capital and is on the fast track to expansion. The startup provides mobile phone technology to health care companies. Specifically, it has add-ons to mobile apps to enhance security and increase engagement. For example, an insurance company might have an app that allows customers to log in to their account to search for doctors and make appointments via their phone. While it’s convenient, there’s a risk in putting personal health information on the Internet; in the event of a breach, the insurer could run afoul of the Health Insurance Portability and Accountability Act. MPulse software can provide an extra layer of encryption. The company has other features to make it easier for patients to use medical apps as well. “We have seen 21 percent month-over-month increases in engagement,” said mPulse Chief Executive Chris Nicholson. “Based on these numbers, we could see about 300 percent growth from 2015 to 2016.” Compared to other industries, health care has been slow to adopt mobile technology, partially because of security concerns. MPulse’s technology works as an added security feature for existing apps developed for hospitals, insurers, pharmacies and doctor and dental offices. “Applications must be adequately secured in order for mobile health apps to succeed,” said Patrick Kehoe, chief marketing officer for application security company Arxan Technologies Inc. in Bethesda, Md. “There are critical privacy and security risks inherent in how mobile health apps are deployed into the wild, which leaves sensitive data, IP and logic and controls vulnerable to theft and disruption.” MPulse was spun off from established communications service provider mobileStorm Inc. of Encino. From the spinoff, mPulse acquired mobileStorm’s core messaging infrastructure and added features such as natural language processing and predictive analytics. The company’s technology has attracted key clients including insurance giant Humana in Louisville, Ky.; Inland Empire Health Plan in Rancho Cucamonga; and Anthem Inc. in Indianapolis, the parent of Thousand Oaks-based Anthem Blue Cross in Woodland Hills. Its technology and client list has also drawn investor interest. Team response In August, OCA Ventures in Chicago led mPulse’s bridge round, or preseries round, of funding. Companies that invested also include Merrick Ventures of Chicago and JumpStart Inc. of Cleveland. The raise brought in $1.7 million. After a successful angel round and positive market feedback, mPulse decided to raise more capital a little sooner than initially anticipated, raising more than $9 million in a Series A round held in December. Health care investor HLM Venture Partners in Boston led the campaign and the firm’s executives said they were initially drawn to the talent behind mPulse. “First and foremost, the team was extremely impressive,” said Yumin Choi, a general partner at HLM. “I think at any early stage investment, the team is really the driving force behind it. For this stage of business, the caliber of talent is really several notches above where you would expect a company this size and scale would be at.” Chief Executive Nicholson was a former chief operating officer for Humana’s health and wellness business and Chief Operating Officer Gary Holderby was the former COO of touchscreen maker mobileStorm. He also worked in management at telecommunications company Qualcomm Inc. in San Diego. Together, the top five executives have more than 95 years of experience in the health care and technology industries. “Every single investor that invested in the bridge round followed on and invested in the Series A again,” said Nicholson. “I think that says a lot for their confidence in the business for them to move forward.” Recently, mPulse just added Santa Barbara’s Rincon Venture Partners to its list of investors, bringing its grand total just shy of $12 million. “What’s exciting about that is it oversubscribed our round and helps underline interest in our company,” said Nicholson. He said the company will use the money to fuel growth and support its existing client base. Over the last six months, mPulse has added customers in the pharma and medical device spaces as well as several population health and wellness companies. Over the next year, it plans on adding 20 positions to the company in tech, behavioral science and analytics as well as account management for health care clients. The company will also continue to add sales and marketing personnel across the country. Currently, mPulse has 30 employees in the U.S. and 10 in India. The tech firm has more than a dozen clients throughout the health care industry and provides them with services such as virtual visit support, medication therapy management and live coaching. Enhancing engagement In addition to augmenting security, mPulse technology makes health apps more functional and interactive. For example, most mobile appointment programs for doctors are somewhat static. Typically, a patient will receive a message asking if he or she would like to keep an appointment with an option to text back a simple yes or no. With mPulse’s technology, a patient can let the doctor’s office know when he or she is running late or cancelling, and the software has the extended capability to fill the appointment spot so the health care provider won’t lose money from a vacant time slot. “These (types of) applications make care, treatment, record keeping and department communications more efficient than ever before and are just getting better,” said Nick Nascimento, chief executive of San Diego-based IT consulting firm Sentage Systems. “This translates to drastically lowering the cost per patient treated, and with the improvements, comes better communication and better health care.” On the marketing front, the company leverages social media channels and blogs to educate potential buyers and the consumer market about its health care technology. It also conducts webinars on topics such as the Telephone Consumer Protection Act and engaging in health care. According to Nicholson, mPulse has no direct competitors. However, there are many companies that develop applications and IT for the health sector. In the long term, mPulse wants to build a sustainable business as opposed to quickly driving up revenue and selling off the company, Nicholson said. He believes the company has the potential to become a multihundred-million-dollar enterprise over the next few years and believes the firm’s Encino location will add to its success. “I think it’s great for other startups to think about (headquartering on) the Ventura Boulevard corridor,” he said. “We can attract more senior and experienced talent from Calabasas, Westlake and Thousand Oaks, and we can also attract younger, newer talent from Studio City, Santa Monica and Venice beach areas. We are sort of right in the middle of where those things all come together, so it’s just the perfect mix.”
