Sandeep Akkaraju On Raising $100 Million To Take Medical Imaging Everywhere

Sandeep Akkaraju is the cofounder and CEO of Exo which is a medical device startup which develops handheld ultrasound devices and AI for imaging and therapeutic applications. The company has raised $100 million from top tier investors such as Intel Capital, Applied Ventures, Sony Innovation fund, Rising Tide, Bold Capital Partners, Creative Ventures, Raimagined Ventures, and OSF Ventures to name a few. Prior to this he built and sold IntelliSense for around $750 million.

In this episode you will learn:

• Choosing your investors wisely
• How big Exo is today
• Why Sandeep says he would tell his younger self to go even bigger, earlier
• How to go about an acquisition for your business

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Remember to unlock for free the pitch deck template that is being used by founders around the world to raise millions below.

About Sandeep Akkaraju:

Connect with Sandeep Akkaraju:

• Linkedin
• Crunchbase
• Twitter

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FULL TRANSCRIPTION OF THE INTERVIEW:

Alejandro: Alrighty. Hello everyone, and welcome to the DealMakers show. Today we have a founder, and he has quite an interesting story to tell. He’s built several companies. He’d grow them, exited them, and you name it. I think we’re going learn a lot, as well, because he actually got involved as an entrepreneur before even startups were fashionable. So, without further ado, I’d like to welcome our guest today, and I don’t want to make anyone else wait any longer, so let’s welcome our guest today. Sandeep Akkaraju, welcome to the show.

Sandeep Akkaraju: Alejandro, thank you so much for having me. I really appreciate this opportunity.

Alejandro: Originally, you were born and raised in India, but I know that you grew up there in different spots, so how was life growing up there?

Sandeep Akkaraju: India in the ‘70s and ‘80s was definitely a very fascinating place. Back in those times, I wanted to be a musician. My dad was an entrepreneur; my grandfather and grandmother were entrepreneurs, as well. My grandparents are in the health sector rebuilding the country’s infrastructure in the post-colonial era. Similarly, my dad is in the tech space back in the ‘80s. A lot of playing cricket, a lot of playing music, and being in bands, and wearing your hair long, and doing the rebellious thing back in the ‘70s and ‘80s.

Alejandro: That’s amazing. From seeing your family, having that entrepreneurial drive, what did you learn? What kind of influence did you get or some insights that you knew one day you would apply?

Sandeep Akkaraju: I think, clearly, with my grandparents – this is post-colonial India. The British had left the country in shambles, and there was a big drive to rebuild the country. I think my grandmother was a Freedom Fighter, and both of them were really involved in setting up a hospital. She was a nurse, and he was a doctor. They wanted to help the underserved and the poor, and they dedicated their lives to that cause. My father was involved in the early space programs in India. He actually worked with satellite launchers, and then he went on to do his own company. I think the key takeaway here is about building something that serves people. That was drilled into me – those who had given a lot; there’s a lot expected. That was the ethos that I was brought up with. As a child, I wanted to be a musician. It’s, clearly, that creativity out there and the act of creating was an important aspect of my youth growing up, and I think it still plays an important influence in my life.

Alejandro: So, engineering was the influence and the passion that got you into cutting your hair and putting your guitar aside, so how did you develop the love for engineering, Sandeep?

Sandeep Akkaraju: You know, I think I was more of an accidental engineer. Part of it is clearly creativity is one thing, but I think lack of talent is sometimes what you need to know when to fold your cards, and I think my background was in engineering and took forefront quite late in my life. I think of myself as an accidental engineer.

Alejandro: How do you end up in Boston? Tell us, how do you go all the way from India? You got your MBA later from INSEAD, and you also studied in Louisiana, but how did you land in Boston?

Sandeep Akkaraju: I ended up in Louisiana at that point because I wanted to be close to music. It’s the place for Jazz, Blues, and I wanted to be out there. That’s where I ended up with my Master’s. I moved to Boston at that point to join, literally, a garage startup in the early ‘90s. This is as I said, this was before startups were fashionable. Then, this was an MIT startup that I got involved with, and a very big thing and helped grow that company. That’s a little bit about my background. It seemed like an interesting gig. I think I’m one of those guys who is kind of all about pulling the strings and seeing how far the journey goes. It was on a whim that I ended up in Boston. Sometimes, it’s also meeting the right people and making the right connections. So, I haven’t looked back.

Alejandro: Let’s talk about your first baby, IntelliSense. All of these experiences, and let’s say this opportunity of working at a startup, I’m sure that it gave you the idea or the roadmap to understand that this is something that you could also do yourself. So tell us about how you came up with the idea of IntelliSense and how you went about bringing it to life.

Sandeep Akkaraju: At IntelliSense, I joined up with Farīborz, who is a brilliant guy. He had these really crazy ideas in terms of nanotechnology and microtechnology and doing mechanical objects and engines on a chip and electronics on a chip. I found that fascinating, and in the early days, this was all about writing Doppler proposals and NSF proposals to get funded. This was a bootstrap venture where there was no venture capital in the company in the early ‘90s, and we really had to work at it one step at a time. It’s a lot of hard work that goes into it and a lot of dedication and passion. We ended up building that company step-by-step. One of the pivotal things I remember in ’95 and ’96, digital equipment in the Boston area was going bankrupt, and we ended up buying a lot of equipment of digital at that point and setting up our own foundry to make our circuits and devices. We saw the whole internet thing coming, and we said, “This internet thing is going to be big one day.” That was the viewpoint back in the ‘90s. We focused the company on optical switching and creating devices for the backbone of the internet that allows communications. The company grew from there and was eventually acquired by Corning. Corning, at that point, had a monopoly in all of the optical fiber, and this was the next play for them to get into the switching as well. That was a good exit. IntelliSense was acquired for about $750 million by Corning. I think what was fascinating is the company going from a handful of people to a major acquisition. It happened over a number of years, and we had to methodically build it step-by-step – a lot of patience, a lot of hard work. But there’s one thing, those are both things that I would say are things I am accustomed to. I feel like projects that I end up taking up are not about quick exits or quick turnarounds but focusing on tools that can push humanity forward. That’s what I learned at IntelliSense.

Alejandro: The journey at IntelliSense was interesting because, as you were pointing to it, Corning acquired the business with a deal worth $750 million, so quite a great outcome for being the first business that you were building. Something interesting happened there. Literally about a year and so into transitioning into your role with the acquiring company, Corning, then you decide to reacquire IntelliSense. So tell us about this.

Sandeep Akkaraju: Sure. It was actually a couple of years later. I have taken some time off. One of my childhood dreams of spending time backpacking, so I spent a couple of years backpacking, and I was looking to do something else. It was an opportunity of reacquiring the business from Corning. We acquired some of the assets, but not all of them. That was in the 2003 timeframe that we reacquired some of the assets of the business from Corning. So I ran that for a few years. I think the interesting part of IntelliSense was that we felt that in anything that you do or at least anything that I felt that I needed to do, you needed to own the fundamental platforms of fundamental technologies behind it, which was something key to that acquisition. But also, I think one of the things that I realize sometimes is – while I ended up buying that business back and running that, I think the energy and the passion that I had disappeared a little bit in doing the same thing all over again. Sometimes, you have to realize that – someone pointed out to me – trying that same playbook all over again didn’t make sense. I personally need novelty, and I need that excitement. I ended up putting other ideas in parallel with IntelliSense and doing other things out there. It was a fun and interesting detour to the journey out there.

Alejandro: In terms of the journey, you did a bunch of tests, you see what could be the next chapter. Eventually, the next chapter became Jyve, so tell us about Jyve.

Sandeep Akkaraju: Sure. Prior to Jyve, I had tried to do another company, but after a year, we realized that the fundamental technology was flawed. It’s an important lesson to know when to, as an entrepreneur, it’s not all about hits, and you also need to know when not to play your cards. The ideas around Jyve were clear. We saw the whole mobile phone revolution coming down the pipeline. This was before the original iPhone had come down. You had these early devices like Nintendo Wii, which had come out, which was using motion-sensing to play games. You had early GPS devices that had come out at that point and devices from Nokia and BlackBerry. I’m dating myself a little bit. But it became clear that motion was going to be a fundamental part of the digital experiences that we were going to have. Jyve was about creating the fundamental sense of technologies around motion and motion capture. What was interesting out there about that is if you look at the early gyroscopes and accelerometers and all these motion-sensing devices back in the early 2000s, these were all several thousand dollars and would weigh a few pounds. What we were able to achieve was miniaturizing all of that and putting it into chipsets that go into everything from watches to augmented reality devices that those chips are now going into. The idea was, how do you take motion and make that widely available to billions of people? Everything from exercising or augmenting experiences for the disabled. The application space now in terms of where motion-sensing is going is incredible. I think that entire set of technology has now become a fundamental civilizational layer – think twice about it. When you got your first iPhone, it was novel that it could switch between a portrait mode and a landscape mode. Now, you don’t even think about those kinds of things. Or things that you had on Wii are now on every iPad and every phone. That’s what I think about as technology disappearing and becoming a civilizational layer. That’s what we are also intending to do.

Alejandro: In this case, with Jyve, what ended up happening because this is a business that you were with for about a couple of years, but then it ended up getting acquired. So why did you guys push for an acquisition here?

Read More: Benjamin Miller On Crowdfunding $1.5 Billion To Break The Status Quo In Real Estate

Sandeep Akkaraju: What became clear for us is to, at least in the mobile space, it’s really difficult for smaller players to get large design wins. Supplying for a Samsung or an Android – you need a huge amount of manufacturing infrastructure to be able to enable that. In this particular case, we felt that it was better to merge with a well-known semiconductor entity rather than going all the way alone. We were at a point where the key technology itself was fundamentally de-risked to some degree, and we wanted to make sure that we had the right vehicle to get this out into the world.

Alejandro: Got it. This deal was worth $60 million, so good stuff. After this, you started your most recent company, Exo. How did you come across this idea, and what happened? How did you go about executing on it?

Sandeep Akkaraju: The fundamental impetus behind Exo (pronounced “Echo”) was really the fact that 75% of the world had no access to any medical engine. It was a world health organization report that came out in ’14, which pointed out that ultrasound could actually become a modality to provide medical imaging to the rest of the world. Here was a modality that was non-ionizing and non-radiating. The challenge, at that point, was and still is to be able to get good quality medical imaging. The devices are tens of thousands and hundreds of thousands of dollars. The key thing for us was we had the skillsets and background to be able to focus on miniaturizing these systems. I think my background in nanotechnology and semiconductor software pointed out that there may be a path forward out here to change the economic paradigm. The idea was quite simple. It’s how do you take the high-priced equipment and provide the same image quality in a device that would actually be in your pocket. If you also look at ultrasound today, they have hundreds of buttons, a lot of knobs, really complicated devices to even use. The idea was how do you a) change the economic paradigm by making this a few hundred dollars to make and maybe a few thousand dollars at the price of a laptop, but also to fundamentally use the same technologies that allowed people to take what used to be a single-lens reflex camera with a lot of buttons and knobs, and also make that into a chip that’s now part of your smartphone. That is the fundamental modality that everybody uses to take it worldwide – billions of people use these devices without even thinking about how to operate the devices. It was the same thing. How do we fundamentally change? If you could fundamentally change the economic value proposition and the ability value proposition, you could now start putting medical imaging into the pockets of caregivers. What’s interesting is these are large substantiated markets, and you’re talking about over 100 million professionals who could use these devices. Ultimately, we continued to push this. This could be something that could get into every home, just like you use devices in your home to scan your forehead to take your temperature, we believe these kinds of devices are going to be part of your kitchen cabinet in the future. That was the original idea, and it seemed very powerful to be able to provide an on-demand window into the human body. When you look at what we’re competing against, you’ve got 150-year-old technology that allows you to listen to what’s happening inside of the human body. Why not just take a look and see what’s happening? It’s one of those visceral ideas, so a foundation for Exo.

Alejandro: For something like this, I assume that a little capital is needed, so how much capital have you guys raised to date?

Sandeep Akkaraju: Sure. It is a big idea, and we’ve raised about $100 million to date.

Alejandro: For this, you had done it a few times already, so you knew the people that you wanted to surround yourself with, so why did you end up choosing the investors that you chose for this journey?

Sandeep Akkaraju: I think what’s important to me is quality of the dollars. I think everybody talks about smart dollars, but really, for us, it was about the ecosystem to be able to build a device like this. We knew we could not build a device like this or a technology like this alone. So we needed fundamental technology from everything from fundamental material science to the compute side of things to the manufacturing side of things. Where we’ve been really lucky is having early investors like Bull Capital and Rising Tide, who took the original risk on the company that is attracted to big, bold ideas and on the deep technology side of things. Also, we’ve surrounded ourselves with other investors like Intel Capital, Applied Materials, Sony, TDK, GlaxoSmithKline. They’re all part of an ecosystem because to fundamentally change and influence medicine at large. We really believe it takes an entire ecosystem as opposed to just dollars. I think we’ve been very fortunate to have some of the biggest leaders in terms of consumer electronics, material science that are around the table helping us out.

Alejandro: One thing that is for sure is that this whole COVID thing has definitely changed the way the hype was and the way the interest and the focus of many investors of how they were going about things because before, you did not have doctors and nurses on the covers and the front pages of newspapers, and now it seems that’s the daily norm. So would you say that COVID has pushed, quite a bit, the whole segment that you’re in?

Sandeep Akkaraju: I think, absolutely. It has changed everybody’s perspective in terms of what being on the frontlines means. Today, the frontline heroes are the doctors, the emergency docs and nurses, and the critical care people. Our goal is to provide these frontline heroes with tools that can allow them to look at the lungs and pneumonia, whether it’s an admit or discharge and make those decisions on the spot. That has clearly helped and will help the adoption of these technologies as well. Fundamentally, everybody is having to get used to new ways of doing things. We look at this from a company morale standpoint, and it has helped us significantly to stay focused on the end goal, which is about providing these advanced tools.

Alejandro: As we are thinking about impact, future, and trends, imagine you go to sleep tonight, Sandeep, and you wake up five years later. Imagine – a tremendous snooze. And you wake up in a world where the vision of Exo is fully realized. What does that vision or that world look like?

Sandeep Akkaraju: That’s a really interesting question. Our north star is pretty clear. We want every caregiver and every clinician worldwide to have one of our devices in their pockets. This is a replacement for the stethoscope at large. I think in the future, we want to make sure that every patient has one, and every parent has one in their kitchen cabinet. I think the world that is transformed is the world that looks at stethoscopes as being antiquated. When you think, Alejandro, today of what a doctor looks like – you look at a doctor on your phone, it’s somebody with a stethoscope. Hopefully, that picture is going to be everybody with a device that allows them to look into the human body. I think that’s coming on where we’d like to be able to take that. That is fundamentally giving people tools that give you an unprecedented detail into what’s happening inside the body.

Alejandro: That’s very cool. In this case, with Exo, as we’re thinking now about, for example, the future that we’re living into and being able to do this, what are your thoughts, for example, if you had the opportunity to go back in time and ask yourself or perhaps give yourself one piece of business advice, especially knowing what you know now and having done all these different businesses, what would be that one piece of business advice that you would give to your younger self before launching a business and why?

Sandeep Akkaraju: Wow, Alejandro. You’re beginning to time travel, huh? I think it would be simple. For me, it’s about having the courage to go after big ideas. I think as I get older I realize life’s shot, and we have a limited number of hours on this planet. It’s about going after big ideas that really push humanity forward, not in a small way. I think we shouldn’t be afraid of taking these big leaps. It was Steve Jobs who wrote the ad copy for the Think Different ad where they say, “Those who are crazy enough to think they can change the world are the ones who do.” I think part of it is about going after big ideas and being patient while pursuing those ideas. Startups, to me, are places where you can’t necessarily pursue incrementalism. That’s what big companies are for. If you want to do things incrementally, go work for a big company. Startups, to me, have to pursue big ideas. That’s what they’re for is to push yourself. For me, if somebody had told me 20 years ago that we’d be working on devices that allow you to see into the human body and put it into people’s pockets, I would have said it would be crazy, but here I am doing that. I think you make your own luck. I think that would be the big takeaway for me is, go work on big things and go after big ideas that push mankind forward.

Alejandro: I love it. Very profound. Lastly, Sandeep, for getting a sense on how big Exo is, anything you can share on the number of employees or anything else that you think is relevant?

Sandeep Akkaraju: Sure. We’re closer to the 100-mark in terms of how many full-time people. We’re at a point where there’s significant wind behind our sales, and we are commencing on the next part of the journey where we can’t wait to get these devices into the pockets starting next year.

Alejandro: That’s amazing. I look forward to continuing to track your progress, Sandeep. I will be rooting for you all, and thank you so, so much for being on the DealMakers show today.

Sandeep Akkaraju: Hey, Alejandro, thank you so much for taking time, and thank you to all the listeners. I really appreciate this opportunity.

 

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