Dedi Gilad On Raising $205 Million To Bring Clinical Exam Kits To Every Home

Dedi Gilad’s career as a startup founder was rooted in his upbringing in Tel Aviv, where there is an unwavering resilience, a creative spirit, and an innate drive for entrepreneurship. These qualities would become the cornerstone of his journey, propelling him forward in the world of innovation.

His venture, TytoCare, attracted funding from top-tier investors like Insight Partners, MemorialCare, Sanford Health, Itochu, and the Healthcare of Ontario Pension Plan (HOOPP).

In this episode, you will learn:

• Growing up in Israel, Dedi Gilad’s journey reflects the cultural resilience and entrepreneurial spirit that shapes many successful innovators.
• Dedi’s time in New York not only expanded his horizons but also provided a global perspective crucial for navigating the complexities of entrepreneurship.
• Dedi’s trajectory from combat soldier to software developer highlights the fusion of technology and healthcare, laying the foundation for TytoCare.
• TytoCare’s genesis stemmed from Dedi’s personal frustration, illustrating how addressing real-life pain points can lead to groundbreaking innovation.
• TytoCare’s journey through FDA approval showcases the challenges of combining hardware, software, and consumer-centric healthcare solutions in a regulated environment.
• TytoCare’s innovative B2B model with healthcare providers and payers challenges traditional consumer-centric approaches, emphasizing direct engagement with entities.
• Dedi envisions TytoCare becoming a household standard for initial healthcare examinations, empowering users and complementing traditional medical care.

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About Dedi Gilad:

Dedi is an entrepreneur at heart and a seasoned executive with a strong passion for solving real-life problems using advanced technologies combined with delightful user experiences.

Dedi is currently CEO and Co-Founder of TytoCare, a telehealth company with a mission to redefine primary care delivery by putting health in the hands of consumers.

They seamlessly connect people to clinicians to provide the best home examination and diagnosis solutions by enabling a comprehensive examination and telehealth visit anytime, anywhere.

Prior to Tyto, and for over 20 years, Dedi led technology organizations, business initiatives, and interdisciplinary R&D groups in healthcare IT, SaaS-based systems, and enterprise software.

Dedi has a passion for design & contemporary art and, whenever time permits, enjoys expressing himself creatively through art. He spends much of his free time enjoying life with his wife and two children.

Connect with Dedi Gilad:

• Crunchbase
• Bloomberg
• LinkedIn
• TheOrg

Read the Full Transcription of the Interview:

Alejandro Cremades: All righty hello everyone and welcome to the dealmaker show. So today. We have a founder joining us from startup nation. You know I love israeli founders I got to tell you and today we’re gonna be learning quite a bit about raising money. We’re gonna be talking about. You know a building scaling. Financing how they went about covid and their execution thinking about software and hardware. You know, especially when raising money that’s ah, a challenging you know a path but without a doubt you know like what he’s done and with his team you know is remarkable and very inspiring and we’re going to be learning a lot today so without further ado. Let’s welcome. Our guest today Dedi gilat welcome to the show.

Dedi Gilad: Thank you A andro and thank you for having me.

Alejandro Cremades: Um, so originally born in Tel Avib give us a walk through memory lane. How was life growing up.

Dedi Gilad: Oh growing up in Israel in general, it’s it’s great. It’s a lovely country for people who haven’t been here. It’s an amazing place. Very a unique, very small and very hectic but a great place to live. It was living in the suburbs of Tel Aviv all the way until right after I got married but basically all of my studies a high school university all of that was in Tel Aviv and so that’s basically it.

Alejandro Cremades: Now in your case I mean you’ve been quite a quite all over the place. You know like you’ve lived in New York too I guess how do you think your your worldview opens up where you’re not just stuck in in Tel Aviv you know and and you’re able to see that there’s a life. You know outside.

Dedi Gilad: I think this is this is part of the Dna of israelis in general and and I think for people entrepreneurur entrepreneurs who didn’t do it I highly recommend as an engineer. Also you know curiosity and learning new things is something part of your. Mindset so it it was really amazing. I’m also you know I was working in the us for many years right for my first work I was living for you know, part time in Seattle doing some. Work for like 3 years for Microsoft in 1 of my first jobs as a vendor to them but but it was not really as living in the country so living in New York and in the us gives you a very unique but you know proportion of of how. The real business world is happening your customer are adopting the product. The kids my my my took my 2 children they were quite yaned by but back then ah it was an amazing experience for them as well. So happily we went back right before covid to Israel but it was an amazing experience. You know it’s a very fulfilling one and teaching one.

Alejandro Cremades: And what about the? um, you know also for you getting into into computers because I mean you ended up studying computer science and it sounds like cutting on software has been people tell you know your professional career. So how did you get into the whole thing around computers.

Dedi Gilad: Yeah, so it. So it’s a actually yeah, it started like many israelis ah you know the the science spot or which was not really computer science. Initially it was more physics for me. It came from the high school and things that I liked actually. Love to do things with my hands I’m sculpture sculpturing I’m doing art I took a break actually spot of my life for almost two years doing art so it was part of me but in the army like many israelis I started as a comback. Combat soldier and for medical reasons I had to a re moved or moved to the back offices for the an intelligent unit working with the combat unit so in that unit I learned a lot about the gis. And mapping and software and I got the bug of of computer science and initially as a hobby. But right after the army I said I have to learn more so I did 2 things in parallel one went to the university to really do science and engineering and I I learned engineering. Not. Computer science. But I majored in information system. But also I took a course of soft courses of software development and started to work as part of my studies and this is how I got into it.

Alejandro Cremades: Now in your case too. I mean you went at it. You know you started. It’s it’s interesting though because you went at it. You know in the corporate side versus you know, like the typical folks you know in in computer science that will go at it right away as an entrepreneur What do you think? took you you know? ah. This years I mean we’re talking about at least you know what would you say you know like 1520 years to ah to really start your own startup. What what do you think? took you so long.

Dedi Gilad: so so yes and no I didn’t I also had a small I’ll give you some notes on that. So at the beginning it was really that you at least in my background when I started which was like many years ago almost ah Almost thirty years ago my first job after after my my my studies in the university and was the high-tech industry wasn’t really very strong in terms of you know startups building startups and so forth it just started. All the financing side in Israel so israeli was very focused on it or hardware cheap design and so forth and I’m not an engineer on the hardware side. So I started on the software I t side and started to grow from there into Vp roles and later on ctos as. 1 time in my life with a friend with a dear friend I did started something for like a year a year and a half out of our garage and and and raised some initial funds from the technion incubator but then came ah a.

Dedi Gilad: The the 2000 collapse that you all remember and then we so we couldn’t really raise more funds so we went back each one of us to his own day job and the second time was really when I said I have enough of my own in terms of capabilities. To to start my own business. You have to be very strong at the beginning certainly our type of business and we have to have enough tail wind and support to be able to really go with it all the way like I like I did so that took us more years and this only started. And the end of 2012 like eleven years ago

Alejandro Cremades: So I guess before it started you know like on when you were like in the in the corporate side of things I mean you were actually part of for example, like 2 acquisitions as well. I guess what kind of visibility would you say that gave you into the full life cycle of of a company.

Dedi Gilad: So yeah, one of them was was interesting because it was more a simple and and modest a few tens of millions and and it was between two israelis companies. And what I’ve learned from that is that I hate corporate the company who acquired us was a large company I found myself very quickly managing like 80 people 90 people in a very corporate like a company and I didn’t like it. Also. A. There was a small aqua hire for a previous company into Microsoft at the beginning of the days and and I didn’t really want to move that most of my employees went into Microsoft and I after walking with them for for a long time. It was it wasn’t the right spirit for me. So it was more of starting things from scratch. So this gave me the notion that I’m a type of guy that likes to build things to a certain level to create and to innovate and and that you can do mostly in small companies.

Alejandro Cremades: So Let’s talk about now the the way that things transition because there’s here are ah, really interesting secrets of event that happen. You know all the way leading to diet to care which is the company that the the rocket ship that you have started and that you’re Leading. So What were the sequence of events that needed to happen for you to be like I’m Ready. You know this is it. Let’s go.

Dedi Gilad: Cool. So ah, first it started when I when I said you know at some at some you know age or experience you feel that you are comfortable enough on doing different things in your life and you feel. You have the power mental power I will say the most and the support in my case for my for my wife to really go for it so it it starts to build before that right after my first small episode of startup. I went for like 2 years of sabbatical and did art learned art and teach pottery and and sculpture and I opened up my mind and I said okay I want to do other things in my life. So the job after that happens to be in the healthcare industry. I was running initially a vpr and d and then a Ceo of an israeli subsidiary in the healthcare side. This was the first company who did hardware and software as well. So I was running for the first time also hardware related r and d. And I got the bad I would say healthcare is like a bug and for the first time you see that you have beyond the business aspects and beyond the technology which is most entrepreneurs or most people in the high-tech like there is also a good cause.

Dedi Gilad: What you do in the healthcare when you’re actually impacting people and patient or doing good to the world. It it for me. It’s at that age was something unique. So when things they have evolved this specific way in that company and I said I don’t want to continue there. I I knew that I’m starting something of my own and it started with my youngest kid shahar back then she was four years old and she suffered from a lot of Throatt and ear infections and me taking her in the mornings to the garden to the kindergarten in Israel. I was responsible for the healthcare in the mornings and and this ritual of going to the pediatrician on almost every month or so with the same issues. It just drove me crazy. Why can I do this visit and I started to learn as an engineer. What this. What my our physician which was very nearby like few blocks from my home in e huda and and what is he doing and how can I replicate it somehow and when the time came also in my previous company I decided I’m starting something new and I joined. We offer my dear partner who was with me for 6 years before that as an employee and we started tight. Okay, so titleke came out of a personal need and a personal ah personal frustration I would say.

Alejandro Cremades: So then walk us through the moment that you finally activate this you decide to bring this to life and how did you know the whole thing you know, come together. What were the the early days like when you decided to activate the switch.

Dedi Gilad: Wow! So so it starts when you still. Ah you know, just thinking about it and and reading a lot and doing some market research and and I was back then already pretty savvy with business say or growing bigger companies on what does it take. To bring a a product to life so it was also not only on the technology side but also on the business side so I did a lot of learning and once I saw that there is a a good match. A obviously I was a little bit optimistic back then how differentiate or the solution is how innovative it in terms of. Market adoption I said I’m going out I’m quitting my day job and I spoke with offer both of us and we did a short of analysis together and then we quit together and starting funding ourselves. We started with a small a. Small funding from the israeli government that gives a young entrepreneurs and mostly from our own funds and we said we’ll take like six months and we see if we can raise money. Obviously it took us longer and and it’s it’s how those those initial days title. Was doing both a some proof of concept of the technology because we took something which is very potentially simple, but very very complex in the day-to-day we actually taking the the examinations of a clinician a pcp.

Dedi Gilad: Primary care physician pediatrician and the work that they do physically in their office with a patient so imaging of the ear the throat the skin asccultation recording or listening to the heart and in lung sounds and getting some vital signs all of those active activity. To be done by a lay user at home. So it started with a very big technology barrier. How can we technically do it and give consumers ability to do it so algorithm a tracking guiding user and so forth and in parallel. Seeing if you if we can even raise initial funds and I can tell you this was a very very tough time. It was a it was a good time in Israel in terms of 2012 was a good year to to raise funds. But you know when you come a. Back then with a company that is creating a device a medical device a lot of regulatory that is consumer-based not some you know a a cpu or Pcb that runs in the background of a server something that people actually use. Very very difficult. We took a very it took a very big a leap of faith from our initial investor that this is even achievable for a small company from Israel. We’re not a giant back then we were there were not really too many companies at scale. There were few but very very few.

Dedi Gilad: And and doing this combination of hardware software algorithm a consumer medical. It’s a very very tough combination.

Alejandro Cremades: So for the people that are listening to get it. What ended up being the business model of the company. How do you guys make money.

Dedi Gilad: So it it changed over time and today I would say the following title is a platform powered by a consumer device a kit of multiple like 5 different Fda clear devices. That allows a people to run older a medical service primary care service from home. Basically we sell to providers and to payers so insurance companies large us employers anyone who takes medical risk. A medical insurance on patients we sell it to them in a b two b model as a subscription. The kit itself the device itself along with the service that we provide are all encapsulated into a monthly or a yearly pay payment. Per family who is part of the service. So a large insurer like elvance in the us or anthem is providing it for free to their members to the relevant members and each family who is connected to the service drives a revenue for title. Not directly. We’re not getting paid by the consumer. We’re getting paid by the payer by the insurance company. So this is how the business model works and the longer they are with us both value to the payer themselves so they see cost reduction in their insurance.

Dedi Gilad: Coverage their total cost of care is going down because a service with title saves time and saves E R visit and saves urgent care visit and saves medicine and so forth the consumer have obviously ease of use from home. A. At the lower cost as well between them and the insurer and title is getting basically their revenues from the service.

Alejandro Cremades: So I guess say in this case too. You know for for you guys. You know how is the all the whole fva you know side of things for a company like this. How does that you know pan out.

Dedi Gilad: So so yeah, also very you know a pivotal moment in our life I yeah first of all medical. We’re not a medical device company. We are you know digital health a powered by a medical device. But those companies are usually late bloomers you you cannot go to market unlike other you know consumer oriented or other software saas companies that who can be in the market after 2 years for us it took almost five years until you build the first beta. And test it and go through all the regulatory even before the Fda and Ceo and then you start the see journey in the in the fda journey which is probably approximately 2 years each and what was also difficult for title. It was that we didn’t really have a predicate. In Fda if you have a predicate a similar product already approved. It’s easier and we took a very unique route of a combination product that is built. It’s like 5 different and medical devices a stethoscope an autoscope a thermometer an exam camera and so forth. And combined it into a modularr kit. It was new for the Fda. We had a lot of back and forth initially. But we took you know looking backwards. We probably took the right approach because today it’s much easier for us to change element in the product to add element.

Dedi Gilad: It’s not like fixed because in the Fda on the regulatory reward any change you do software or hardware requires a lot of clearances again. Any marketing materials requires approval. So it’s difficult so we were the first one who actually did it. Without a requiring at the nova process I don’t want to go into the tits but it was a difficult process but also ah barriers to others.

Alejandro Cremades: Now when it comes to racing money. You know for a company like this is not easy I mean I guess just in for the people that listen that are listening right now to really see it how how much capital 2 have you guys raised to date.

Dedi Gilad: Date we raised 205000000 and we did it in like 5 rounds a scene and up to round a serious d that was in 2 trenches.

Alejandro Cremades: Okay, and then.

Dedi Gilad: Again, if you asked me ten years ago I would say you are crazy I thought we will end up with maybe anywhere between 30 to 50000000 a it’s complex. It’s really complex because it’s not only about the device part and the Fda. It’s much more around the the the behavioral science and the change that you make our marketing team is very very different for most companies again in in b two b saas companies you have a marketing that is doing lead Gen creating a pipe. You have sales people that go b two b and sell it pretty straightforward in our case, the work starts after the b two b sell because then you have a largepayer or insurance company that bought even few thousand devices to begin with. And and then they have to distribute it effectively to the right population with the right messaging and nobody is using even very advanced consumers today. Don’t really do those kind of listening to their child’s lungs at home without any physician. It’s very rare. Even today. So how do you convince people to get it even for free and then to use it and actually the usage itself brings the value because the usage itself saves the money if people continue with their behavior and go to the clinic and have fever or something. Our.

Dedi Gilad: Product is not working so the value is not there so you have to do a lot of b two b to c or or direct-to-consumer work in terms of engagement you know training behavioral change and and took us some time to understand that this is a need. But this is heavy in in in in both in development but also in resources and cash so you need funds for 2 types of marketing for very very complex r and d we have groups that are doing machine learnings and and and ai very deeply to analyze. Things in your lungs also Fda cleared wizzes and crockles and ear infection and so forth. We have hardware group. We have freewa group. We have servers and integration and we have app for for ios android so you have like 3 different companies.

Alejandro Cremades: Now How how challenging is typically you know to to really put this in front of an investor and and what does that journey of enrolling them into.

Dedi Gilad: Into one.

Alejandro Cremades: The excitement of of what’s possible because there’s a lot of education and dreaming there that needs to happen for people to really believe in this because I mean it’s challenging when you combine both software and hardware.

Dedi Gilad: Yeah, so I think what’s there’s good things and bad things you know or challenging things I think the good thing also in terms of sales and our growth set same goes with investor when you sell them a dream is that it’s very tangible. Everyone. From the first friends and families to the largest like insight partners who who joined us and some large pension fund from canada in the last round they all see it very vivid that they can be a user anyone who speaks with me. can be a title user you can be a title user even if you have kids if you even if you don’t have kids anybody can see it very tangible. Why it helps them so that’s the easy part people get excited very quickly. Both investors and also customers and you know at first phase it’s enough for them to get excited to. Give you the funds then they they they know the heavy lifting and the complexity of behavioral change comes only later so at the beginning you know there’s a lot of excitement still there. It’s it’s very complex when you start to drill down. Into the business model and into comparables investors they like ventures and and some innovation but they don’t really like it. They like to have comparables you are similar to another company who already did it in a different field and they can do the comparable.

Dedi Gilad: In our case, there wasn’t really something similar to that so it was very if you talk about medical devices. It’s mostly sold to either as a d two c or devices only either as a capital equipment to health system hospitals or to the home like thermometer or some things like that. And service saas we are not pure Saas we are a combination so it it was hard for them to digest happily. The first investors were really excited about the vision and went with us and we were very a you know Israel entrepreneur I think one of the things that is unique to them. Is that we can be as I call it line and mean we can do a lot relatively with a small amount of funds. So we we brought the first mo-ups and and better product working clinically very fast. It wasn’t approved by the Fda yet it wasn’t ready for scale but it was working so the the ability to imagine that this technology can work was very quick after like a year and a half the initial product and then it was a lot of heavy lifting until. Can really submit it to the Fda and go to market.

Alejandro Cremades: So I guess obviously when when you bring investors Obviously vision is a big one and let’s say you were to go to sleep tonight and you wake up in a world where the vision of title care is fully realized what does that world look like.

Dedi Gilad: We are getting there by the way we have today more than 1000000 members using the product about 40000 clinicians using the system. Out of about 220 health organization again, we don’t sell directly to consumers. We sell to health organizations. So the vision is is really that most households certainly families with kids to begin with. Have a new way when they have a clinical issue like today they do Google or ask their friends or doing a temperature check on themselves or their child the very initial activity will be a go to title. And do the initial checks even without asking a clinician just to get initial feedback doing the basic today. The basic at most households is the temperature reading. Okay nobody is calling their physician before checking their temperature. Okay, in most cases. So the basic should be for me the basic exams of title in most households and and then you start the journey. We’re not replacing physicians and not trying to replace. Although my Ai today according to the Fda in many cases is the.

Dedi Gilad: Ability for me to diagnose specific murmurs or or let’s say wizzes or crackckle is higher than a standard pcp because we tag the data with specialists with poulmonologists with cardiologists. We’re still not trying to replace physicians. We won’t. To empower them to use our data which is highly unique in the industry. There’s no entity, not Kaiser Permanente not Mount Sinai not any insur in the war that has our data. We are the only company who actually have that kind of images video sound recording. So using that to power the the physician but not to replace them. So for me, the vision is that this is the go to solution like today if you have a pain in your belly you will do an x-ray to see that you don’t have this or that so that there’s a. Use of a standard care modality title becomes one of them.

Alejandro Cremades: Now We’re talking about the future but I want to talk about the past through the limits of reflection here if you were to go back in time into a time machine and I bring you back in time to 2012 you know the moment that you were thinking about starting something and you were able to have a sit down with that younger self. Ah, you say to that younger they one piece of advice for launching the company. What would that be and why given what you know now.

Dedi Gilad: Ah, it’s a great question I would I would say to myself 2 2 things that are opposed. You know one in the good side and this is my number one a tip. For entrepreneurs is is pick your partner the right partner and I chosen the right partner and and both offer in title. But also my wife without this support. Certainly a journey like ours is not feasible and so that’s the that’s. 1 thing that I would do exactly the same the things that that I would change I would I would say do faster it move faster to the us. Walk more with large I wasn’t really I was more optimistic than I now am now more real realistic in terms of how easy it to change and it’s sometimes Purew Luck you know so companies. Amazing companies. Can come ahead of the curve. And they miss the market because the market doesn’t catch up with them so they end up without funding and then the market comes it was in a lot of technologies even in Israel voice over I p and video and so and things like that. So so I think ah, ah, getting in front of the market.

Dedi Gilad: A faster in terms of us investors was something I would do faster that would be the 2 the 2 things and maybe from that to learn about the need for engagement. So initially, we grew very very fast. very very wide many many organization I think looking backward to go deeper with few customers and learn the next levels could have helped as well.

Alejandro Cremades: So that’s incredible, very profound. So for the people that are listening that are very inspired and that are wondering hey I would love to reach out and say hi. What is the best way for them to do so.

Dedi Gilad: Ah, to email me I can keep the email address my personal one or title and they can feel free to reach I’m not very fast responder but I like I do a lot of work with entrepreneurs trying to help. Again, our journey is still not a We’re still working and still growing. You know selling you know in Tens of millions. It’s it’s nice, but you want to grow beyond that and and but I’m always happy to support and to assist.

Alejandro Cremades: Amazing! Well hey Daddy thank you so much for being on the deal maker show today has been an honor to have you with us.

Dedi Gilad: Thank you so much Alran Bye bye.

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