How Do You Raise in a Time of Crisis?
Startup Grind’s Q&A with the healthtech startup that didn’t let a pandemic get in its way of funding — or better healthcare.
Every quarter, we select a truly stand-up startup from our Startup Community to feature in-depth. This time around we’re looking at Promaxo, an Oakland-based startup focused on designing customer-centric MRI systems and robotic guidance tools for live diagnosis and treatment in a physician’s office. Promaxo has exhibited brilliant creativity and ingenuity over the last several years and recently closed their Series B-1 funding— in the middle of a pandemic, no less. Keep reading for our Q&A with Promaxo’s CEO, Amit Vohra.
As the COVID crisis unfolded in March, Promaxo was in the midst of raising their Series B-1 round. Simultaneously, they’d been working aggressively on meeting their timelines for product realization and regulatory clearance. As a medical technology company developing capital equipment, the process required some team members to be physically present at their office to operate the MRI scanner and continually optimize the MR images.
On one hand, the pandemic had an impact on some of their investment commitments. On the other hand, it restricted Promaxo from running full-tilt as an organization. Most importantly, they knew they had to ensure the safety and well-being of their employees and loved ones.
Promaxo acted quickly and focused their attention on a plan to operate effectively during the shelter-at-home order. They clarified their classification as an essential business and once they had the confirmation, they implemented a creative company-wide work schedule. The team made sure that the majority of their employees worked from home.
For employees needed to run the scanner, they implemented social-distancing protocols at work and started working in two shifts to keep in-person interaction at minimum. They consistently communicated the critical timelines and schedules to their team & investors, met virtually through Zoom/Uber conference, and kept the team motivated and engaged in these unique times. The quick reaction and adaptability of their team to this adversity allowed them to stay on course, ultimately allowing them to close the first tranche of their Series B-1 funding.
SG: You’ve done so much in regards to the portability of high-tech specialized healthcare. Tell us more about how Promaxo came to be and how it’s evolved over time.
Amit Vohra, CEO of Promaxo: From the very beginning, our goal has been to make MRIs more adaptable and accessible to the physician and patient communities. I had exited my last venture in Spring 2014 and had decided to pursue an Executive MBA at Duke. I chanced upon Promaxo’s underlying MRI technology at a NC Biotechnology Center Event in Fall 2014.
The project was at that stage funded by NIH and NSF and the platform nature of the technology got me excited. I spoke to my advisor and better half, Abhita, and we initiated our own due diligence process. As part of the process, Abhita introduced me to Michael, who ended up being the co-founder of Promaxo. The Company was incorporated in Jan 2016 and we started the journey to realizing our goal. Since inception, we have raised $17.3M in dilutive capital and grown to a team of over 20 employees and interns in Oakland.
Our amazing team has brought the portable single-sided MRI from an early concept to a 60601 certified prototype ready for clinical launch in the US urology market within the next few months.
Promaxo’s vision is “to improve quality and speed of healthcare delivery to those in need while reducing cost. To build and deliver value to shareholders and society in doing so.” A vision without actions is a daydream and with our portable MRI and robotic platform, we are fully committed to our vision of making healthcare more accessible.
SG: Promaxo has raised before, closing a $3.5 million Series A round in 2017. What was different this time around?
Fundraising is about building relationships with the investor community, and each round can take months to materialize. The single biggest lesson I learnt after raising the last round was to start working right-away on the next round. This meant researching all investors relevant to our industry and funding stage, and initiating a conversation with their principals through my network. I agree with the wise folks who stated that a startup CEO stands for “Cash Extraction Officer” and is always raising. I try to be “that” CEO.
Our current round is led by Kineticos Disruptor Fund and we have known the fund founders and partners for several years. We had been communicating on our current round since late 2019 and even though we had a couple of challenges (including the pandemic), the mutual trust between us allowed us to close the round.
SG: Why was this raise so important for Promaxo?
Every round is critical in a company’s growth. Promaxo is on the path to a clinical launch and commercialization in the US urology market and any delays in financing could have slowed our growth curve. The fact that we were able to bring in capital in these unprecedented COVID-19 times makes this even more important. We can go full steam with all resources in place and focus on delivering our next milestone.
SG: How did you find the right investor? Did you pitch multiple?
Fundraising is never easy and requires kissing a lot of “frogs” and “princes/princesses.” So yeah, I am always pitching even when I am not presenting to a bonafide VC or angel investor. The person I am chatting with might not invest but could open doors for us through her/his network.
For the current round, we have the right lead investor in Kineticos Disruptor Fund. We keep presenting to multiple investors though to plan for our next close and the subsequent financing rounds.
SG: How did you overcome funding rejection and what lessons did you use to your advantage?
A startup CEO needs to be thick-skinned and not be disheartened by the frequency and unpredictability of ‘no.’ I strongly believe that ‘no’ accompanied by a reasoning for rejection is way better than a ‘maybe.’ The unpredictable no can be exhausting but it must be taken in the stride. Every investor has a sweet spot and I used most funding rejections to define the right investor for the round in play and subsequent rounds. For me, a ‘no’ in the seed round from a VC or corporate strategically could mean a yes downstream once measurable growth milestones have been achieved.
SG: If you had to pick one, what do you think was the biggest key to your fundraising success?
The biggest key to our fundraising success has been transparent and regular communications with the investor community. This has helped us build a strong relationship with the VCs and angels and helped them witness our progress in real-time.
SG: Being a health tech company, how do you see Promaxo and other tech companies fitting into the future of healthcare?
I authored an article which details my perspective on this.
A couple main excerpts:
“Healthcare is a space that moves slowly. Given the amount of money pouring into it every year, which amounts to 18 percent of GDP in the United States, that’s perhaps not surprising. Yet in recent years it seems like technology is finally catching up with healthcare, and it’s changing things more rapidly than anyone could have ever imagined. That’s true for the patients, who now have increased access to wearables and to platforms like telemedicine, allowing them to have more control over their health and to access their care from anywhere.
The role of the doctor, meanwhile, is also changing thanks to robotics, imaging and machine learning, which are meant to help process the more mundane, repetitive tasks to allow physicians to practice at the top of their skills and licensure.I see the role of the doctor as managing all these technologies, making the call on what needs to be done and where. In my perfect world, a doctor would be a conductor in an orchestra: they do not need to perform all the musical instruments, they masterfully choreograph the procedure.”
SG: You’re also currently the co-founder and Director for a new startup called 8chili, technology built for the future of remote collaboration in surgeries. How have the lessons, success, failures (if any) of Promaxo made this possible?
As an entrepreneur, I keep learning every day. The most important lesson I have learnt over the years is to surround myself with the “right” people. These “right” people are employees, advisors and investors who have a positive impact on the company culture and bring diverse and complementary skill sets. I have learnt that empowering the employees, keeping them motivated, and allowing them to express themselves is critical to a successful startup.
SG: What’s kept you going after all these years?
I am motivated every day by the fact that the work we are doing is going to positively impact lives and make a meaningful change in the healthcare domain. What else could I ask for from a lifestyle and a career!
SG: If you had to give advice to anyone fundraising in the current climate, what would it be?
Eric Reis defined a startup as “a human institution designed to create a new product or service under conditions of extreme uncertainty.” The current climate embodies uncertainty. I would advise the fundraising CEOs to be adaptable and action oriented in the COVID-19 world. Communicate with the investors in your network and keep them apprised of any updates and developments. Keep a laser focus and devote all resources to executing on one measurable milestone that could convince the investors that the team can deliver in these uncertain times.
SG: If you had to give advice to anyone in the health tech space — who really wants to make a difference — what would it be?
Healthcare space is ripe for disruption on several fronts. However, it takes time to change the status quo in the health tech domain and needs buy in from all stakeholders including patients, providers, and payers. The first and foremost goal for any startup in the health tech space should improve and save patients’ lives. Simultaneously, they should ensure that a value proposition exists for physicians and payers.
SG: What is the most exciting thing on the horizon for Promaxo?
We’re looking forward to our MRIs being deployed in urology clinics and practices in the US in the coming months. The most exciting thing on the horizon for Promaxo is when our system provides an enhanced and comfortable MRI experience for patients. That would be a truly gratifying experience!
SG: Lastly, what attracted you about the Startup Grind community?
We were excited to join Startup Grind as it provides a global community where we can connect with and learn from like-minded individuals across a wide range of industries. Startup Grind provides us with an opportunity to forge lifelong friendships and leverage a global ecosystem of entrepreneurs, investors and potential partners. As a growth stage medical technology company transforming healthcare through our deep-tech robotic and imaging platform, we embody the spirit of Startup Grind.
Visit Promaxo to learn more about their technology & team. And if you’d like to meet other excellent startups like Promaxo, explore the Startup Grind Membership which brings the best startups in the world together in a supportive & global community.
