Navv Systems Inc., born out of Henry Ford Health System, seeks to use the injection of a $3.2 million venture capital seed round to bolster its pipeline of healthcare systems focused on better tracking of equipment and personnel, as well as helping patients and guests better navigate the complex facilities.
The first institutional investment round for Navv Systems was led by noted healthcare venture fund Arboretum Ventures out of Ann Arbor, Mich. and included participation from Detroit Venture Partners and Narrow Gauge Ventures, also out of Ann Arbor.
As a trained physician, Navv Systems CEO Dr. Daniel Siegal said he knows first-hand the frustration of finding needed equipment or hospital staff in the sprawling facilities.
"There's a ton of frustration, not knowing where the things we need are in order to provide care," Siegal said.
"That can be people, that can be equipment, or it can be literally just finding your way through a big complicated building. And if you've spent any time within a hospital, you have probably gotten lost or you probably know someone who's gotten lost. And when people show up late to appointments, there's this snowball effect, and it causes all kinds of challenges ... for patients, providers, healthcare systems."
Navv Systems' technology, licensed to the company in 2019, was first conceived through Henry Ford Innovations, the development and commercialization arm of the Detroit-based healthcare system. The technology is in use at all six of Henry Ford's hospitals and used for patient transport, housekeeping and central pharmacy deliveries.
"We are really excited by the increased functionality that the NavvTrack provides for hospital operations," Dr. Richard "Chip" Davis, senior vice president for Henry Ford Health System and CEO of the Henry Ford South Market and Henry Ford Hospital, said in an emailed statement to Crain's. "It has improved efficiencies and made better use of hospital resources like patient transport and housekeeping services, equipment utilization and visitor wayfinding across all five of our acute-care hospitals."
In addition to being the company's co-founder and CEO, Siegal is the vice chair of the radiology department at Henry Ford Health System and has a background in computer science.
The company's other co-founder and CTO, Paul Zieske, has a background as an engineer and in healthcare IT.
Navv Systems projects revenue of about $500,000 or just over for this year, and expects that figure to triple next year. The company has five employees and seeks to grow to 10-15 over the next 12-18 months, according to Siegal.
Siegal said Navv Systems seeks to rely on a "confluence of technologies" and works with Apple Inc.'s indoor positioning system that allows for tracking of a hospital floor plan. Existing tracking technologies like radio-frequency identification, or RFID, have traditionally been very expensive for hospitals to implement at scale, Siegal said.
While acknowledging a good amount of competition in the healthcare equipment-tracking sector, Siegal said Navv Systems aims to differentiate itself by offering a single platform. For competitors, the CEO points to companies such as Connexient Inc. and AerosScout Industrial.
"If you were to try and do this using some of the other existing tools that are out there, you'd have to have separate solutions that don't necessarily talk or play nicely with one another," Siegal said.
The CEO added that because the company is focused on using software rather than hardware, the platform can be up and running at a hospital in a manner of weeks.
Additionally, Siegal said Navv Systems relies on what he called a "responsive web app" for patients and visitors using the company's service on their mobile device for navigating the hospital complex. Doing so, he said, means the person does not need to worry about trying to download a new mobile application as they enter the facility.
Brian Peters, CEO of the Michigan Health & Hospital Association, said the need for modernizing the healthcare supply chain has grown exponentially in recent years as more health systems are becoming integrated with thousands of employees and equipment across several facilities.
"Years ago, healthcare in the state of Michigan, in particular, consisted of primarily independent hospitals that did not have relationships with other hospitals and skilled nursing facilities," Peters said. "Today, that looks very different. There's a number of large integrated health systems that have a large regional or even multi-state footprint. We are much more sophisticated now than ever before in healthcare. Not only supply chain management. But how we deploy staff. That's taken on a very different look in recent years."
Supply chain management is a critical focus for the industry, he said.
"Making sure you have the right people and the right equipment and supplies in the right setting and the right amount is paramount now," Peters said. "We are an operation that is running 24/7, 365, and we don't know minute by minute who is going to walk though the door at the hospital and what services they will need."
Life science and healthcare-focused startups such as Navv Systems accounted for the majority, 40 percent, of venture capital dollars invested in Michigan last year, according to the most recent research report released by the Novi-based Michigan Venture Capital Association trade group.
As part of the Navv Systems deal, Arboretum Ventures Managing Partner Tim Petersen will join the company's board of directors.
"We've been very impressed with the sophistication of Navv's technology, and the early customer traction Dan and his team have achieved," Petersen said in a statement. "Navv is another prime example of clinician-led innovation emanating from a world-class organization like Henry Ford, addressing an important and immediate healthcare challenge."
This story first appeared in our sister publication, Crain's Detroit Business.
Crain's Senior Reporter Dustin Walsh contributed to this report.