After working for a large company for more than a decade, Dom Messerli was on his own for the first time in 2016.
He’d just launched a medical-technology startup out of his Bristol home specializing in spinal implants. A lot of work remained between the implant concept and the market, including clearing regulatory hurdles, and Messerli felt isolated.
“I was struggling, because I didn’t know anyone in the field,” he said. “I felt like I was this lonely guy in the medtech industry, and I just didn’t feel that there was anyone … who was doing the same thing.”
About two years later, a series of introductions resulted in a connection with the then-newly formed New England Medical Innovation Center in Providence. Messerli found his peers, and his groove.
“All of a sudden there are these pitch events and these things with hundreds of people in the entrepreneurial space,” said Messerli, founder and CEO of Providence-based Lenoss Medical LLC. “I’m not sure if it changed in the state or if I finally got linked into the right people … I think it’s a little bit of both. I think in 2016 there wasn’t really much there.”
GROWING SUPPORT
For years, Rhode Island business leaders have put out the welcome mat for the medical-technology industry, a promising sector that includes the makers of cutting-edge medical devices and digital platforms to improve health care. After all, the state has some crucial ingredients for medtech growth, including top-notch higher education institutions and health systems, along with affordable rents and a smallness that allows easier access to state leaders and other key players.
Still, the sector has had trouble gaining traction in the Ocean State, in large part because of Providence’s location in the gravitational pull of Boston and Cambridge, Mass., and New York City, massive medtech hubs in their own rights.
It has taken time, but many in the industry say the tide finally has turned. Support for fledgling medical-technology businesses has expanded in the Ocean State, and with it an increased sense of community and opportunity that’s the backbone of the change.
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SUPPORT SYSTEM: Lenoss Medical founder and CEO Dom Messerli in his Providence offices with his company’s product, a spinal implant. Messerli launched the medtech startup in 2016 but says he didn’t hit his groove until connecting with peers and fellow entrepreneurs through the New England Medical Innovation Center two years later. / PBN PHOTO/ELIZABETH GRAHAM[/caption]
Aiden Petrie, a co-founder of medical device developer Ximedica LLC in Providence and founding partner at the New England Medical Innovation Center, said he has seen the pace of new startups rise to about 10 high-quality companies annually.
“It’s changed completely, based on what we see walking through the door here every day,” he said, referring to NEMIC’s education program for medtech companies in pre-fundraising stages. Twenty-five people are enrolled.
Elsewhere, the Rhode Island Business Competition added a medtech track this year for ideas related to medical technology and digital health. And Commerce RI and NEMIC recently launched a competitive program called Activate offering up to seven companies thousands of dollars in professional services to fine-tune business plans and prepare for raising money. So far, four have applied.
At Social Enterprise Greenhouse in Providence, program administrators say that while 15 medtech enterprises have completed the organization’s health and wellness accelerator in the past decade, the pace has quickened, with eight of those having completed the accelerator in the last two years.
In perhaps an indication of rising confidence, NEMIC will co-host an event at the Venture Café in Cambridge, Mass., on April 2, promoting Rhode Island as a medtech hub, in hopes of wooing entrepreneurs across state lines.
But for all the improvements in Rhode Island’s medtech ecosystem, obstacles remain.
One of the most stubborn: Industry leaders in Rhode Island readily acknowledge that funding can be difficult to come by beyond Greater Boston, where there seems to be no shortage of venture capital and private-equity money.
LACKING DEFINITION
Medtech can be a difficult industry to pin down, with definitions varying according to group, company or state agency. Although one Providence trade group, RI Bio, offers a current snapshot of activity in Rhode Island, few figures from previous years are available for comparison. This much is clear: The sector is small, but it is growing and holds much promise for creating high-paying jobs.
Rhode Island is home to 42 medical device and equipment companies, which employ about 1,330, according to RI Bio, a life sciences trade group that includes medtech among the fields that it represents.
Employment in the medtech sector grew 13% from 2013 to 2017, the group said.
In 2013, the Rhode Island medtech field was disjointed, with members disconnected from one another, which led to the formation of RI Bio – then known as MedMates – to provide a common voice and spur opportunities. The group rebranded in early 2019, becoming part of the global Biotechnology Innovation Organization.
NEMIC was formed in 2018 as a separate group focused solely on bolstering medtech companies. “We became RI Bio to become more encompassing, and NEMIC was formed to take a strength and leverage it,” said Carol C. Malysz, RI Bio executive director.
Both groups offer opportunities for medtech companies, but fill different roles, Petrie said.
While RI Bio is an “industry convener,” NEMIC was created to help people with ideas for a medical device or a digital product raise enough money to get off the ground and into the market.
“Through our backgrounds in angel-investment communities and mine in the development community … we come in with a very specific knowledge base,” Petrie said. “We know medical device development and digital product development. And we’ve got a community around us in the region where we can draw on unbelievable expertise, whether it’s at the hospital or in the industry.”
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NIMBLE MOVE: Aristotle Mannan, founder and CEO of bosWell, a Providence-based company that links community resources with health care services, moved to the city last year after founding bosWell in Massachusetts in 2015. Mannan says that “for anything that involves working with health plans, there’s no better place than Rhode Island because you can try things very quickly.” / PBN PHOTO/MIKE SKORSKI[/caption]
R.I.’S UPSIDE
Aristotle Mannan’s transition from biomedical cancer research in Cambridge to community health work in Boston led him to the concept that eventually anchored his digital health company, bosWell Inc. The Providence-based company helps connect community resources such as food pantries, churches and clinics with health care organizations in order to facilitate medical care for vulnerable people who may not seek a doctor on their own.
Mannan traveled across the country with the idea before founding bosWell in Massachusetts in 2015. He moved to Providence last year after completing a Social Enterprise Greenhouse accelerator program.
“I think digital health is a place where things can be nimble,” Mannan said. “They can move very quickly and I would say for anything that involves working with health plans, there’s no better place than Rhode Island because you can try things very quickly. If I had to do it all over again, I would come [here] earlier, as opposed to going to Boston and Philadelphia and places in between.”
Rhode Island’s size means that experts in marketing, finance, technology and other areas helpful to startups are close at hand, said Aaron Horowitz, CEO of Providence-based Sproutel Inc.
Horowitz founded the company, which produces robotic companions for sick children and brings various other products to market, in 2012.
“There is no such thing as six degrees of separation here; there is only one,” he said. “The size and interconnectedness of the state make it easy to meet the right people and can help accelerate growth.”
Several groups are trying to get that message out and to nurture young companies willing to come and take advantage.
In addition to NEMIC’s event in Cambridge in April, the group will co-host a larger version, in collaboration with Commerce RI, in Providence in May, with the intention of attracting early-stage companies, including those from Massachusetts and Connecticut.
NEMIC also hosts two accelerator programs and two boot camps per year designed to prepare international companies for market, regulatory and fundraising success.
While not specifically focused on medtech, Social Enterprise Greenhouse also runs an incubator for early-stage ideas and a coworking space, and offers a fellowship program, advising and consulting services, and university partnerships. Health and wellness companies have been participating in all of its programs, according to Meg Wirth, SEG director of health and wellness ventures.
FUNDING ISSUES
Francisco Portela found the Social Enterprise Greenhouse accelerator program extremely helpful as he tried to get his medtech startup off the ground in 2016.
But after Portela Soni Medical, which produces an innovative urinary catheter, completed the program, Portela had a new problem: Securing enough money to get off the ground in Rhode Island.
Portela eventually was funded by two investors in California and moved most of the company’s operations to the West Coast, where its product, BLUcath, is manufactured.
“For a startup, there’s not a whole lot of options” in Rhode Island, Portela said, adding that for new companies, attracting qualified employees so close to competitive medtech hubs in Massachusetts and New York is challenging.
Still, there is money for medtech in New England, according to NEMIC co-founder and investments specialist Lydia Schroter. She said about $8 billion from angel investors and venture capital firms is invested in the industry each year in the region.
Robert Brown, CEO and president of Ximedica, has yet to decide whether Rhode Island’s proximity to Boston helps or hurts startups.
Avoiding the big-city expense is a benefit, but Boston has plenty of potential investors and is flush with funding.
“If anything were to hold Rhode Island back, that would probably be the item. … When you’re looking for funding, being in proximity to people who actually have the money can be a good thing,” Brown said.
Although Providence has a strong academic, scientific and engineering foundation, it’s not clear how it’s regarded by venture capital and private-equity firms, Brown said.
“There [are] a lot of companies to invest in, and the general rule is people kind of do the thing that’s easiest for them to do,” he said.
For some in the industry, it makes the most sense to include Rhode Island in Boston’s orbit.
The state hasn’t yet proved its pull for established companies, but medtech has presence, said Brian Johnson, president of the trade association MassMedic, which represents medtech companies across New England.
The group partnered with Ximedica on an entrepreneurial boot camp for medtech startups last fall.
“You can see the potential there; it’s all over the city,” Johnson said, but, “We don’t really look at Rhode Island as its own individual hub. … I think it’s going to take a lot of effort to develop that singular voice.”
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HEALTHY DEMO: Lenoss Medical founder and CEO Dom Messerli demonstrates how to use a blood pressure cuff to participants in a workshop at the New England Medical Innovation Center. From left: Chris Chaput, Jeremy Krause, Joey Gu and Messerli. / COURTESY NEW ENGLAND MEDICAL INNOVATION CENTER[/caption]
IT STARTS WITH RESEARCH
As the number of in-state startups making their way through NEMIC programs increases, Petrie attributes the flow to sharpened priorities in academia and health care.
“In the labs of Brown [University] and [the University of Rhode Island] and Lifespan [Corp.], there is a focus on … research that leads to companies,” he said. “That wheel is beginning to spin more. … You just have to get a couple of successes for people to say, ‘Oh, this is an interesting area to play in.’ So I think you’re getting more momentum, and it’s probably fair to say that Brown and Lifespan are the most productive.”
Of the 25 participants enrolled in a current NEMIC education program, seven are from Brown, two from URI, six are affiliated with Lifespan and the remainder are industry professionals or entrepreneurs.
Wirth, of Social Enterprise Greenhouse, is also the founder of Providence-based Maternova Inc., a company that sells technologies and devices to improve the health of women and newborns. The company, created in 2009, was the first medtech venture to complete an SEG accelerator. After establishing Maternova on a global market scale, Wirth joined SEG in her current role in 2018.
“The sense is there is a lot more support,” she said. “There’s a lot of interesting crossover also, with creativity and the arts; there’s the universities but also the growing startup ecosystems that are all linking to one another. You can’t just have a great medtech idea; to succeed, you also need a brand and a user interface and creative communications and all the other pieces that are available [in Rhode Island] within a fairly short distance of one another.”
‘FAVORABLE ECOSYSTEM’
The state’s dense networks of specialized interests is an attribute that Mannan, of bosWell, said that SEG makes good use of.
His company had already completed MassChallenge in Boston and Village Capital, another accelerator, but his goal upon arrival in Rhode Island was to make practical connections.
“I’d say Social Enterprise Greenhouse is unique in a number of ways, but what I was really hoping to get out of it was relationships in Rhode Island, and that’s what they really delivered on,” he said. “You can’t put a price on that.”
BosWell’s free app is now being used on a pilot basis for record keeping and data reporting by community groups in Rhode Island and Massachusetts. It allows traditionally low-tech organizations to upgrade from paper records, and connects groups serving the needy to the health care system.
Rhode Island’s small arena allowed the company to act quickly, Mannan said.
“I think Rhode Island has an incredibly favorable ecosystem. Most people spin their wheels early on … and half that battle is trying to get some attention,” he said. “[In Rhode Island] you can cut through a lot of that noise very quickly.”
That easy connectivity bodes well for the state’s startup environment, particularly in digital health, Mannan said. His experience has led him to recommend Rhode Island to other early-stage companies.
For his part, Portela is not sure where Portela Soni Medical’s permanent headquarters will be. With manufacturing and product sterilization taking place on the West Coast, no pressing ties to Rhode Island remain, other than his fondness for the state.
But Johnson, of MassMedic, said Rhode Island’s efforts to make a medtech name for itself may well be productive, especially when it comes to young companies.
“I think they’re doing the right thing in making the argument and trying to attract the companies and the talent,” he said. “I think they will ultimately be successful, but I just think it’s going to come from the startups that pick Providence and grow up there.”
An earlier version of this story gave an incorrect date for an event the New England Medical Innovation Center is co-hosting at the Venture Café in Cambridge, Mass. It has been rescheduled to April 2.
Also, story misidentified the Rhode Island Business Competition with an outdated name and mischaracterized its relationship with the R.I. Commerce Corp. While Commerce RI does provide funding, the competition is not part of Commerce RI.
Elizabeth Graham is a PBN staff writer. Contact her at Graham@PBN.com.
