In­no­va­tion: A Band-aid-like dis­pos­able vi­tal signs mon­i­tor

Next Steps On March 3, U.S. Food and Drug Ad­min­is­tra­tion-ap­proved Vi­tal­patch launched as a pre­scrip­tion med­i­cal de­vice, dis­trib­uted un­der the Vi­tal Con­nect brand as well as those of part­ners in­clud­ing Philips. Nazari says the com­pany is rais­ing an ad­di­tio

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come through part­ner restau­rants, Post­mates says.

To help cover de­liv­ery costs, In­stacart looked to re­tail­ers such as Whole Foods Mar­ket, Costco, and Tar­get. Once stores part­ner with In­stacart, the for­mula shifts. Most part­ners choose to list items for the same price on­line as in stores. To com­pen­sate In­stacart for the in­creased sales vol­ume the site drives to them, the stores pay the e- com­merce com­pany a com­mis­sion on ev­ery item sold through its site. In­stacart de­clined to say how much or what per­cent­age of rev­enue those fees ac­count for.

The com­pany counts at least 100 re­tail­ers as part­ners, up from 30 a year ago. The “vast ma­jor­ity” of In­stacart’s sales are through part­ner stores, says Vishwa Chan­dra, vice pres­i­dent for retail ac­counts. One part­ner has been par­tic­u­larly ea­ger to do busi­ness with In­stacart: Whole Foods plans to in­vest in the de­liv­ery startup and sign a five-year agree­ment, Re/code re­ported last month. In­stacart de­clined to com­ment on the deal.

The com­pany says the newer busi­ness ar­range­ments are help­ing it bol­ster profit mar­gins. De­liv­ery fees paid by cus­tomers now make up less than half of to­tal rev­enue, which grew five­fold in the past year. In­stacart says it’s “prof­itable” in four cities, in­clud­ing its two big­gest, San Fran­cisco and Chicago, and that 40 per­cent of its vol­ume is prof­itable— mean­ing most or­ders lose money. It also says it will be prof­itable over­all by sum­mer. That comes with a ma­jor caveat: Its cal­cu­la­tion for prof­itabil­ity doesn’t in­clude the cost of of­fice space, ex­ec­u­tive salaries, and some ad­di­tional staff ex­penses.

In­stacart has raised $275 mil­lion from in­vestors since its de­but in 2012 and was val­ued at $2 bil­lion by in­vestors at the time of its most re­cent fundrais­ing late last year. The com­pany is con­fi­dent it can grow into a sus­tain­able busi­ness—so much so that CEO Me­hta says he doesn’t plan to raise ven­ture cap­i­tal again.

Form and func­tion

The dis­pos­able Vi­tal­patch from Sil­i­con Val­ley startup Vi­tal Con­nect com­bines a tem­per­a­ture sen­sor, sin­gle-lead elec­tro­car­dio­gram, ac­celerom­e­ter, and pro­ces­sor in a Band-aid-like mon­i­tor for pa­tients at home or else­where.

The zinc-bat­tery­pow­ered pro­ces­sor records EKG, heart and res­pi­ra­tory rate, skin tem­per­a­ture, and step count for up to four days. (It can also de­tect falls.) Via Blue­tooth, the patch sends data to a doc­tor’s or care­taker’s mo­bile de­vice. In­no­va­tor Nersi Nazari Age Ti­tle Chief ex­ec­u­tive of­fi­cer and co-founder of the 80-per­son com­pany based in Camp­bell, Calif. Ori­gin Nazari, a vet­eran chip­mak­ing ex­ec­u­tive, founded Vi­tal Con­nect in 2011 with fel­low chip­maker Steve Zadig, who brought him the idea of a dis­pos­able vi­tal signs mon­i­tor.

The com­pany has re­ceived about $50 mil­lion from in­vestors and one of its sup­pli­ers it wouldn’t name.

Berg Ins In­sight es­ti­mates that 36 mil­lion patien pa­tients will use In­ter­net­con­nected home med­i­cal mon­i­tor mon­i­tor­ing by 2020, up from 5 mil­lion last yea year.

Price Vi­tal Con­nect says it can make its pro­pri­etary chip for about $1. It ex­pects to charge less than $100 for the com­plete de­vice. The bot­tom line To off­set the cost of de­liv­ery, In­stacart is seek­ing a sales com­mis­sion from part­ner re­tail­ers.

Edited by Jeff Muskus Bloomberg.com

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