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

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