Kiwi breast imaging software startup raises $5.5 million

Matakina Technology offer over-subscribed. Milford onboard.

Kiwi med-tech company Matakina Technology says it has raised $5.5 million in its latest funding round, including $500,000 in oversubscription.

It says the new investors are a combination of high net worth investors and fund managers from Australia and New Zealand, including Brian Gaynor's Milford Active Growth Fund. 

Matakina Technologies was seeking $5 million from investors for its Volpara Solutions imaging software, which aids in the early detection of breast cancer.

The Wellington-based company, which has already raised $6.5 million in its initial funding round (plus another $1 million from Callaghan Innovation), says it would use the new capital for an “aggressive sales and marketing drive” further into the US and Europe and Asian Asia, and to move its Volpara software to the cloud.

Matakina was founded in Wellington in 2009 by a group of physicists, cancer and medical imaging specialists who saw the need to give radiologists better information about breast density – a cancer risk that also masks tumours in mammography.

Its chief executive, Ralph Highnam, an engineer and breast imaging expert, sees potential for global growth. The total breast screen imaging market is worth around $1.5 billion annually.

Matakina’s Volpara software is installed in 155 clinics in 29 countries and involved in numerous high-level clinical trials, the company says. So far it’s been used to detect more than 4500 hidden tumours.

Matakina marketing and communications manager Jenny Shackleton tells NBR the $6.5 million raised to date has been spent on “getting product ready, globally tested, protected and cleared.”

In terms of money coming in the door, it’s early days.

Revenues for the current year are $1 million and are on course to double next year, based on early orders in the pipeline, Ms Shackleton says.

The company is still making a loss or “in an investment phase,” in startup speak.

Its Volpara software sells for around $30,000 for one X-ray machine or $50,000 for its full suite of software (Volpara Dose, Volpara Density, Volpara Analytics and Volpara Research).

Investors already onboard are from New Zealand, Australia and the UK and include Warehouse founder Sir Stephen Tindall.

“We want to continue to broaden to give us flexibility further down the road, in case we do want to IPO,” Ms Shackleton says.

US gong
The drive to attract new investors should be helped by the fact Matakina has just won Frost & Sullivan’s North American Innovation Leadership Award for Volpara Solutions.

Volpara was hailed as a market leader in automated assessment of breast density, and for market leadership in radiation dose monitoring and breast imaging analytics.

“It is necessary to measure volumetric breast density to control the radiation dose, and Volpara Solution has emerged as a pioneer in leveraging the megatrend of dose reduction by acknowledging patient-specific dose tracking and reporting,” Frost & Sullivan said.

A key success factor is that Volpara Solutions applications are compatible with full-field digital mammography and digital tomosynthesis systems from all the main vendors of these technologies including GE, Siemens and Hologic.

By allowing radiologists to track density and dose scores across time, Volpara helps support the global movement toward personalising breast cancer screening, Frost & Sullivan said.

Women with lower density have a lower risk of breast cancer, and researchers are looking at incorporating breast density into risk models which may support personalised screening protocols.

“We are taking breast cancer detection, diagnosis and treatment to the next level and truly believe that we, and the industry, are on the verge of an evolution in the early detection of breast cancer, and the saving of many lives,” Dr Highnam says.

All New Zealanders will be proud a homegrown technology is helping to detect breast cancer earlier, and save lives.

But potential investors will also have the blunter question: when’s it going to make money?

Ms Shackleton says Matakina has so far chosen expansion over profit, “although we were close to breakeven point this year.”

She adds, “Obviously, Frost & Sullivan has realised as have we that there’s a huge untapped market ready for exploitation around dose, hence the investment round.”

In February 2013, NBR reported that Matakina had won a contract worth hundreds of thousands of Euros, for its Volpara software to be used in a three-year European Union breast screening trial.

The three-year project will cost researchers ¤6 million, with a number of other institutes involved, including Radboud University Nijmegen Medical Centre in the Netherlands, University of Manchester, University of Girona in Spain and Jules Bordet Institute in Brussels. Some 80,000 women were screened during its first six months alone.

Ms Shackleton updates, “The DENSE trial is well underway and will report mid-2015. The researchers are very pleased with how our software is operating so far. We’re now looking at supplying the whole of Norway.”