A Handheld Ultrasound Device for Your Smartphone
For most people, having an ultrasound is associated with having a baby. The doctor rubs a lubricating jelly on the pregnant woman’s stomach and then uses a magical wand to produce images of the baby that can then be posted on Facebook and liked by disinterested people everywhere. The way an ultrasound works is that it uses sound waves to produce images in real-time. According to Cost Owl, “most new ultrasound machines fall in the $20,000 to $75,000 range.” High-end ultrasound machines like the one seen below from General Electric (GE) can cost upwards of six figures:
As always, trying to assign a number to the Total Addressable Market (TAM) for ultrasound machines is an exercise in futility. General consensus seems to be that the market is anywhere from $5 billion to $8 billion a year. That’s not a huge number when you consider that medical device manufacturer Medtronic (MDT) recorded almost $30 billion in revenues from selling medical devices in 2017. Still, it’s a large enough market in which a startup like Butterfly Network might look to disrupt with their handheld ultrasound devices.
Butterfly Network and Butterfly iQ
Founded in 2011, Connecticut startup Butterfly Network first came across our radar back in 2016 when we wrote about the Top-5 Artificial Intelligence Companies in Healthcare. At that time, the startup had only taken in $100 million in funding. That all changed last week when Butterfly took in a whopping $250 million Series D round led by Fidelity. With total funding now at $350 million, we decided to take a closer look at the handheld ultrasound device that Butterfly Network is now bringing to market.
The second time Butterfly Network came across our radar was in an article we wrote last year about 9 Artificial Intelligence Startups in Medical Imaging. In that article, we talked about how Butterfly is reinventing the ultrasound machine by squeezing all of its components onto a single silicon chip. Well, ladies and gentlemen, that device is now here at a price point of less than $2,000:
It’s called the Butterfly iQ, and the battery-powered handheld ultrasound device is designed to last an entire shift, or over 2 continuous hours of scanning. When you’re not using the device, just set it on the wireless charging pad. The Butterfly iQ is FDA 510(k) cleared for diagnostic imaging across 13 clinical applications which span the whole body. Right now it’s only available for purchase in the United States, and you’ll need to be a licensed physician to reserve one. Next year the devices are expected to be available outside the United States, which opens up the market to places where such a low-cost device might be needed to improve healthcare for the less fortunate (thus, the reason why the Bill and Melinda Gates Foundation invested in the company.) It pairs well with the company’s mission statement which is to “democratize healthcare by making medical imaging accessible to everyone around the world.”
It’s Time for a Change
Jonathan Rothberg, the founder and CEO of Butterfly Network, is an accomplished serial entrepreneur who also founded Raindance Technologies, a company we profiled before, along with Ian Torrent which he sold for a cool $795 million. It’s statements like this that make us question just what the heck we’ve been doing with our lives so far:
In 2011, Dr. Jonathan Rothberg, inventor of high-speed “Next-Gen” DNA sequencing, decided it was time for a change. He assembled a team of the best scientists and engineers across multiple industries to solve what was thought to be an unsolvable problem. Five years later, we put ultrasound on a chip and created the world’s first whole-body imager for less than $2,000.
For most people, “deciding it’s time for a change” means surfing through LinkedIn in an attempt to find a new corporate gig that’s slightly less soul-sapping than the one they’re in at the moment. Not for Mr. Rothberg, a man who has decided that his “time for a change” involved building a medical imaging device for the 4.7 billion people around the world who lack access to medical imaging.
Other Handheld Ultrasound Devices
When we first read about Butterfly’s handheld ultrasound device, the first thing we wondered was how this would affect existing medical device manufacturers who sell ultrasound units. Then, we realized that if Butterfly Networks is selling devices to 4.7 billion people who don’t have access to an ultrasound, they’re essentially creating a new market. In that case, we’re mainly interested in knowing about anyone else who might be playing in the portable ultrasound device space. We decided to use one of our proprietary research methods to answer this question which largely involved one MBA and many Google searches. The first name that popped up was Philips:
Digging a bit deeper and we see that the Philips device has been available since 2015. That’s when we decided to find someone else who is actually qualified to compare medical devices and found this handy table from an article by Telemedicine Magazine aptly titled The Butterfly Effect:
If you don’t have time to read the excellent article, here are some key takeaways:
- The price for Butterfly iQ is unmatched by competitors and expected to get as low as $500
- All images produced by the devices are stored in “the cloud” where deep learning algorithms study them and learn how to diagnose medical problems
- Ultimately, they would like to get the device in the hands of consumers. Interestingly enough, Butterfly’s Chief Medical Officer, John Martin, saved his own life with the device when he discovered his own throat cancer while testing it.
By now you can see how Butterfly plans to turn this into a consumer device where artificial intelligence algorithms will do the initial diagnosis which can then later be confirmed by a doctor if need be. Remember when we talked about how difficult it is to get women to go in for mammograms? Problem solved.
There’s an old saying that goes something like this. “Sell to the rich, live with the poor – sell to the poor, live with the rich.” Selling to the poor is also better from a perception point of view. Generally speaking, selling to the poor has a sustainability element to it, if what you are selling improves the quality of life for less fortunate people. Butterfly Network has hit the sweet spot with their medical device which will most certainly improve the quality of medical care for half the world’s population while making their investors quite wealthy in the process. At least that’s the trajectory they appear to be on at the moment.