Nanox, maker of a low-cost scanning service to replace X-rays, expands Series B to $51M
A lot of the attention in medical technology today has been focused on tools and innovations that might help the world better fight the COVID-19 global health pandemic. Today comes news of another startup that is taking on some funding for a disruptive innovation that has the potential to make both COVID-19 as well as other kinds of clinical assessments more accessible.
Nanox, a startup out of Israel that has developed a small, low-cost scanning system and medical screening as a service" to replace the costly and large machines and corresponding software typically used for X-rays, CAT scans, PET scans and other body imaging services, is today announcing that it has raised $20 million from a strategic investor, South Korean carrier SK Telecom.
SK Telecom in turn plans to help distribute physical scanners equipped with Nanox technology as well as resell the pay-per-scan imaging service, branded Nanox.Cloud, and corresponding 5G wireless network capacity to operate them. Nanox currently licenses its tech to big names in the imaging space like FujiFilm, and Foxconn is also manufacturing its donut-shaped Nanox.Arc scanners.
The funding is technically an extension of Nanox's previous round, which was announced earlier this year at $26 million with backing from Foxconn, FujiFilm and more. Nanox says that the full round is now closed off at $51 million, with the company having raised $80 million since launching almost a decade ago, in 2011.
Nanox's valuation is not being publicly disclosed, a but a news report in the Israeli press from December said that one option the startup was considering was an IPO at a $500 million valuation. We understand from sources that the valuation is about $100 million higher now.
The Nanox system is based around proprietary technology related to digital X-rays. Digital radiography is a relatively new area in the world of imaging that relies on digital scans rather than X-ray plates to capture and process images.
Nanox says the ARC comes in at 70 kg versus 2,000 kg for the average CT scanner, and production costs are around $10,000 compared to $1-3 million for the CT scanner.
But in addition to being smaller (and thus cheaper) machines with much of the processing of images done in the cloud, the Nanox system, according to CEO and founder Ran Poliakine, can make its images in a tiny fraction of a second, making them significantly safer in terms of radiation exposure compared to existing methods.
Imaging has been in the news a lot of late because it has so far been one of the most accurate methods for detecting the progress of COVID-19 in patients or would-be patients in terms of how it is affecting patients' lungs and other organs. While the dissemination of equipment like Nanox's definitely could play a role in handling those cases better, the ultimate goal of the startup is much wider than that.
Ultimately, the company hopes to make its devices and cloud-based scanning service ubiquitous enough that it would be possible to run early detection, preventative scans for a much wider proportion of the population.
What is the best way to fight cancer today? Early detection. But with two-thirds of the world without access to imaging, you may need to wait weeks and months for those scans today," said Poliakine.
The startup's mission is to distribute some 15,000 of its machines over the next several years to bridge that gap, and it's getting there through partnerships. In addition to the SK Telecom deal it's announcing today, last March, Nanox inked a $174 million deal to distribute 1,000 machines across Australia, New Zealand and Norway in partnership with a company called the Gateway Group.
The SK Telecom investment is an interesting development that underscores how carriers see 5G as an opportunity to revisit what kinds of services they resell and offer to businesses and individuals, and SK Telecom specifically has singled out healthcare as one obvious and big opportunity.
Telecoms carriers are looking for opportunities around how to sell 5G," said Ilung Kim, SK Telecom's president, in an interview. Now you can imagine a scanner of this size being used in an ambulance, using 5G data. It's a game changer for the industry."
Looking ahead, Nanox will continue to ink partnerships for distributing its hardware and reselling its cloud-based services for processing the scans, but Poliakine said it does not plan to develop its own technology beyond that to gain insights from the raw data. For that, it's working with third parties - currently three AI companies - that plug into its APIs, and it plans to add more to the ecosystem over time.