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Deal Spotlight: Sana Health — Smart Sleep Mask For Insomnia

Consumers in the USA spent over $41 billion on sleep aids in 2015. This number is expected to grow to $52 billion by 2020¹. This increase is fueled by an overall decrease in sleep, with average Americans getting 9 hours of sleep in 1910 compared to 6.8 hours per night in 2013². There are several common causes at the heart of this increased insomnia — mental health disorders like post-traumatic stress disorder and anxiety disorders, sleep interfering prescriptions like antidepressants, stress, irregular work and sleeping habits, medical conditions like heart disease or asthma, or even aging³.

Sana Health, part of the HAX hardware accelerator, has built the world’s first smart sleep mask, a light and sound simulation device which monitors bio-metric data to guide the user to natural deep sleep. The mask’s patent-pending neuro-modulated stimulation guides the brain through the ideal sequence of patterns for a deep sleep.


Product

Sana is designed to combat insomnia by mirroring the brain’s trigger patterns right before it is about to fall asleep. Using audio-visual stimulation, Sana triggers the specific patterns in the brain which lead to a deep sleep. Currently, the product focuses on two core cases — PTSD-induced Insomnia, and Chronic Pain Insomnia.

“In the same way that when you go into a nightclub, and hear fast music and see strobe lights, this produces an excited state in your brain, this device produces the patterns your brain needs in order to produce deep states of relaxation.”
- CEO Richard Hanbury’s description of how Sana works

The device has a heart rate variability(HRV) monitor on the forehead which tracks minor fluctuations in the wearer’s nervous system. Sana’s goggles emit light pulses and periodic sounds in response to this personalized bio-metric data. Furthermore, users can use this data to keep track of their health and overall well-being.

The device needs an initial ‘training period’ to sync the device with your neuro-patterns. After 4 uses, wearers can go to sleep within ten minutes and sleep through the night.

“It was the difference between something quite good and something extraordinary”
— Bertrand Piccard of Solar Impulse on the customization of his sleep patterns using Sana. Piccard used Sana on his round-the-world journey on a fuel-less plane requiring system checks every 20 minutes.

Market & Industry Analysis

The US market for sleeping aids is projected to increase from $41 billion in 2015 to $52 billion in sales by 2020. Roughly 60 million people in the US, alone, are affected by a sleep disorder every year. This means that 1 in 3 US adults don’t get enough sleep due to sleep related disorders. A lack of sleep has been shown to cause mood and memory impairments, which gives sleep aids a broad-based appeal.

Sleep disorder diagnostic devices market revenue in the U.S. and Europe in 2013 and 2017 (in million U.S. dollars)

To solve their sleep problems, 4% of Americans use sleeping pills (or other medication)⁵. However, sleeping pills provide limited upside. First, patients are at the risk of overdosing. Second, these sleeping only add 8–20 minutes of sleep time and have negative day-after side effects like drowsiness and dizziness⁶. Because of these downsides, a lot of consumers have shifted towards sleep apps and wearables. In 2017, almost 70% of consumers either used a sleep app, or were open to using one for their sleep disorders. Furthermore, 50% of consumers use a combination of more than one sleep aid including wearables, apps, medication, and herbal remedies⁷.

Percentage of U.S. adults that use apps to track their sleep as of 2017

As a result, 110 million medical wearables are expected to be sold in 2018 in the US⁸. The biggest advantage is that wearables can monitor a wide range of medical risk factors. Therefore, smart medical devices are now tracking a wide spectrum of bio metric data and providing personal analytical data to facilitate preventative care, and manage illnesses.

Currently, there are two big challenges in the industry — regulatory standards and security.

Regulatory Standards

The complexity and volume of the submissions required to receive the green light from the FDA have increased over the last 20 years. More clinical data is required now, than ever before, to meet regulatory standards before the product can reach consumers. This has led to increased time and cost overhead, and delayed product launches. For the industry to grow, regulatory standards would have to become more uniform, and cheaper.

Security

Since medical devices collect, store, and manage large amounts of sensitive data, it is critical for companies to maintain a secure cloud-based infrastructure to prevent data theft and breaches. This is particularly important due to the increase in cyber attack volume through 2017⁴. While in other instances of cyber attacks, personal information is at stake, attacks on medical devices could endanger lives. Therefore companies have to spend a lot of time and money on product security.

Competition

This product faces a variety of competitors. From prescription medication and novel mattresses, to wearables, sleep tracking apps, and IoT devices, consumers use a wide variety of products to facilitate higher quality sleep. According to Crunchbase, sleep-focused companies have raised over $700 million in venture capital. In 2017 alone, funding in ‘sleep-tech’ surpassed $300 million. This industry has also seen several acquisitions and exits. Most prominently, Apple acquired Beddit to integrate its sleep tracking tech into its Apple Watch⁹.



Paraj is a senior at Franklin & Marshall College majoring in Business and Computer Science. He is passionate about entrepreneurship and early stage investing. This deal summary is part of The Dealflow Project aimed at finding exciting early stage startups and making deal research more accessible to early stage investors. For any feedback on this article, or to request an article on a specific early-stage startup, email Paraj at parajmathur08@gmail.com.

You can learn more about Paraj on his website. He is currently looking for VC Analyst positions for after he graduates in May 2018.