Teledermatology startup 3Derm Systems is raising a Series A round to boost its sales and marketing team. The goal is to expand its New England customer base and add clients in Midwest and Southwest markets following a commercial launch earlier this year, 3Derm CEO and Co-founder Elizabeth Asai said in a phone interview.
A Form D filing on the Securities and Exchange Commission’s website noted that the Boston-based company has raised $1.66 million with a goal of $3.15 million, but Asai said she could not comment on the filing directly. She did say that the round would include new institutional and strategic investors. To date, 3Derm has raised $2.3 million.
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Primary care physicians use 3Derm’s imaging system to capture and deliver three views of a patient’s rash or other skin irregularity. They store and forward these images to board-certified dermatologists within a health system’s network.
Some of the company’s funding has come from accelerators Healthbox and Mass Challenge. The Yale University spinout graduated from Healthbox’s Boston cohort three years ago. Separately, Asai said the business has received funding from Massachusetts Life Sciences Center.
Among other teledermatology companies with a business-to-business model are SkyMD and OnDerm.
Telemedicine companies’ future is influenced by parity legislation. So far, 29 states have passed legislation for private coverage that reimburses for remote care at the same rate as in-person care, according to data from ATA. Another eight states are reviewing parity legislation for private coverage. Massachusetts is also reviewing telemedicine legislation, but last week state lawmakers dropped parity from the bill.
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Clinical validation has a significant impact on shaping telemedicine’s future as well. An efficacy study of 3Derm’s technology conducted at University of Massachusetts Memorial Medical Center identified an equivalent number of skin cancers using images from 3Derm’s product compared with in-person visits. The study, which included 350 participants, identified 70 percent of patients with benign conditions at the point of care, reducing unnecessary referrals to dermatology practices. The 3Derm study results were presented at the American Telemedicine Association conference earlier this year.
CORRECTION: An earlier version of this story misspelled Elizabeth Asai’s surname.