Systems of record in software are like beachfront property in California. For all the talk and aspiration, most of it has already been developed. Most startups are actually building a system of engagement on top of an existing system of record or, as we’ve seen in the past two decades of SaaS, replacing a dated on-premise solution.
These product approaches are the equivalent of retrofitting or tearing down an existing beachfront property. Prosica is that rare exception, building the first software solution that pathologists use to gather, analyze, manipulate, share, and store their primary data. Today, I am excited to announce that Scale is leading a $23M investment in Proscia.
On the Path to Digitized Pathology
Pathology is the study of causes and effects of diseases through the analysis of body tissue, most frequently using a microscope. Roughly 70% of body tissue (or “slides”) analyzed by pathologists is for the identification of potential cancers. There are roughly 13K pathologists working for more than 3K organizations in the U.S. with more than $10B of spend; worldwide market numbers are 2.5 to 3.0x U.S. levels.
Today over 95% of slides are still analyzed through a traditional microscope that is fancier and more expensive than what we used in high school biology, but no different in function or technology. There have, however, been significant advances over the past decade in digital pathology scanners, which allow pathologists to render slides into a digital format for analysis on or by a computer. Only recently have these scanners achieved image quality parity with traditional slides, a milestone that would not have been true even five years ago.
Modern digital pathology scanners have also made strides in speed. The files they render can be large, more than 10GB at times, but connectivity, cloud, and storage costs are such that today this has become manageable. Image recognition algorithms are starting to gain adoption, which can accelerate and aid the pathologist’s work but only with digital images. COVID-19 has made many organizations internalize that requiring pathologists to work from a lab is a limiting restriction as work-from-home becomes more widely adopted.
Said more succinctly: After decades of promise, we believe digital pathology is finally ready for mass adoption.
Proscia Shows the Promise of Digital Pathology
As you see in many industries, the hardware manufacturers of digital pathology microscopes bundle software with their hardware. Our research suggests these solutions are fine for early adoption, but it is rare that manufacturers develop world-class hardware and software. Importantly, hardware vendors have chosen to make scanner interoperability a challenge for labs even though most labs prefer microscopes from multiple hardware vendors. Enter the Proscia opportunity.
Proscia’s Concentriq platform gathers pathology slide images from a lab’s various microscope sources. It provides intelligence and workflow for managing and optimizing the storage of the images. It allows an individual or a team to manage the workflow for analyzing and reviewing image slides. It also has great sharing and collaboration tools, much like you might find in a mature SaaS app like Box, to allow a pathologist to get a second opinion from another lab, or share findings with an external co-collaborator. Perhaps most exciting, Proscia has built out a library of first- and third-party applications, predominantly in image recognition analysis, that allows pathologists to improve accuracy and accelerate their work.
Proscia serves dozens of enterprise customers including some of the pre-eminent research centers in the U.S. and abroad like the Johns Hopkins University School of Medicine, the Joint Pathology Center (JPC) of the U.S. government, and the University Medical Center (UMC) Utrecht.
Proscia’s Impact on a Very Personal Market
At Scale Venture Partners, we invest in business software at the application and infrastructure layers, where new software can improve the lives of users and sometimes even address other externalities. In the case of Proscia, the potential for positive impact is even more direct — and personal. After all, it’s rare to find someone whose family or loved ones have not been impacted by cancer in one way or another. That process is complicated and scary. Proscia is positioned to be a key piece in the puzzle of making the cancer diagnosis easier, more precise, and more accurate.
Prosica was founded by three undergraduates who struggled with the exact problems they formed Proscia to solve. I could not be more impressed with the professionalism these first-time executives are bringing to a nuanced industry. Unfortunately, COVID-19 has made it such that I have never met Proscia co-founders David West, Coleman Stavish, or Nathan Buchbinder in person. Nevertheless, countless Zooms over the past months have brought us quite close. That first face-to-face Board dinner will be very special, a celebration in its own way.
I believe the future for Proscia is very bright and look forward to working with the company, its existing investors, and new co-investor Hitachi Ventures on the path to digitized pathology.
Scale investments are always team efforts. I want to credit my colleague Jeremy Kaufmann, who was instrumental in our Prosica investment. He pioneered Scale’s ongoing work around PACS in the radiology market and contributed insights that helped us champion this opportunity internally with the full team.