MetaOptima Technology is raising USD 4M through a Simple Agreement for Future Equity (“SAFE”) Convertible Security Offering.
Total Round Size: USD 4,000,000
Raise Description: Post Series A
Security Type: SAFE
Valuation Cap: USD 25,000,000
FY2022 YoY Revenue Growth: 76%
Vancouver, British Columbia, Canada (HQ)
Sydney, NSW, Australia (Office)
Founded in 2012, MetaOptima Technology Inc., is a health technology company incorporated in British Columbia focused on development and commercialization of software, hardware, and Artificial Intelligence (AI) products for dermatology, skin cancer diagnostics, and clinical support. The company serves more than 2.0M patients, 3,000 paying providers, and 1,600 paying clinics world-wide.
1st, 2nd, 3rd Place Winners of The International Skin Imaging Collaboration (ISIC) Disease Classification Competition among 139 algorithms created by 77 machine-learning labs.1
Their technology resulted in 87.3% accuracy, outperforming board-certified dermatologists, general practitioners, human experts with more than 10 years of experience, and dermatology residents who collectively achieved an accuracy of 62.6%.1
Trusted by qualified medical professionals in Australia, Canada, Europe, and the United States of America (e.g.: dermatologists, general practitioners, skin cancer specialists, surgery and treatment centers).
Tax Credit Eligibility: 30% investment tax credit (available to BC resident investors subject to the Small Business Venture). Restrictions apply.
MetaOptima is an intelligent dermatology and skin analytics company. Its product is a skin imaging and analytics SaaS platform that has world leading skin cancer AI detection accuracy and sells to integrated health systems, hospitals, telemedicine companies and skin clinics globally. MetaOptima received a breakthrough designation approval from the FDA after entering the US market in 2021 and is expecting De Novo Class II approval by the end of 2022 which would expand its Total Addressable Market (“TAM”). MetaOptima raised $6.5M for series A in 2018 from Skip Capital and AirTree from Australia. Since MetaOptima’s business has shifted to North America and about half of Annual Recurring Revenue (“ARR”) earned in the USA, with the rest spread across Europe and Asia, MetaOptima is seeing good SaaS metrics (e.g., Net Revenue Retention (“NRR”) >100%) and USA ARR grew 125% YoY to Dec-21 during the pandemic. It has executed better than expected on its US pipeline and now has a solid 2022/23 US pipeline including the major US health systems and pharmacy chains.
Most Common Medical Complaint
1.9 billion people with skin problems2
Shortage of Dermatologists
Long wait times for dermatologists2
Over 65% of skin problems are seen by general practitioners (GPs)
Low Diagnostic Accuracy for GPs
The diagnostic accuracy of general practitioners has been reported to be only 24%-70%2
The solution is early diagnosis – DermEngine Diagnostic AI, which is more accurate than human experts, secure, scalable and accessible. It saves life, cost and time.
The Software as a Medical Device (“SaMD”) Market is projected to grow at a Compound Annual Growth Rate (“CAGR”) of 69.30% during the forecast period of 2019-2026. The SaMD market is projected to witness staggering growth during the forecast period owing to the rapid product launches and rising adoption of the Internet of Things (“IoT”) and connected devices in the healthcare sector. In another industry report, provided by Industry Research, the global SaMD market size is projected to reach USD 7.3651 billion by 2027, from USD 596.3 million in 2020, at a CAGR of 38.4% during 2021-2027.5
The global dermatoscopes market size was valued at USD 616.3 million in 2017. It is likely to witness a lucrative growth of 13.6% over the forecast period (2018-2025). The increasing prevalence of skin cancer is one of the primary factors driving the market. The American Academy of Dermatology (“AAD”) estimated that one in three Americans visit dermatologists and one in four are affected by skin disease every year. Hence, owing to a strong need to treat these conditions as well as minimize deaths caused by them, there is a high demand for sophisticated diagnostic techniques for chronic skin disorders.6
Prior Funding Rounds
Capital Raised to Date
USD 1.2M in 3 angel rounds
USD 6.5M in Series A
Building out DermEngine SaaS platform
Establishing Product Market Fit
Global regulatory compliance
Artificial Intelligence Capabilities
Database of 7.3M skin cancer images with quality diagnostic labels.
1st 2nd 3rd Place Winners of The International Skin Imaging Collaboration (ISIC) Disease Classification Competition among 139 algorithms created by 77 machine-learning labs.6
Their technology resulted in 87.3% accuracy outperforming board-certified dermatologists, general practitioners, human experts with more than 10 years of experience, and dermatology residents who collectively achieved an accuracy of 62.6%.1 Within the 511 human readers, 283 were board-certified dermatologists, 118 were dermatology residents, 83 were general practitioners, and 27 were human experts with more than 10 years of experience.
Track Record and Addressable Markets
Trusted by qualified medical professionals in Australia, Canada, Europe, and the United
States of America (e.g.: dermatologists, general practitioners, skin cancer specialists,
surgery and treatment centers).
Serviceable Addressable Market: $525M in Annual Recurring Revenue (e.g.
Dermatologists, Family GP, Insurance, Pathology, Oncology, and Surgery).
Total Addressable Market: $3.5B in Annual Recurring Revenues (e.g. Skin Cancer
Diagnostics and Therapeutics AI, General Dermatology, Integrated Health Systems,
Public Health, Tele-Health, and EMRs).
Intellectual Property and Regulatory Approvals
8 patent listings, and 21 trademark listings in Australia, Canada, China, Europe, and U.S.
FDA Approvals: Breakthrough Device Designation.
HIPAA certified and GDPR and SOC II compliant; fully integrable with other systems
(e.g. FHIR, HL7, and APIs).
MetaOptima’s Data KPI’s
Vertical Integration of Artificial Intelligence
Note: A health maintenance organization (HMO) is a network or organization that provides health insurance coverage for a monthly or annual fee
MetaOptima Technology Inc., a private company duly incorporated and registered under the laws of British Columbia, Canada (the “Company”).
Founders and Key
Maryam Sadeghi (CEO and Co-Founder), Majid Razmara (CTO and Co-Founder), Scott Farquhar (Director), Hamed Shahbazi (Director), and Daniel Petre (Director).
Securities to be Issued
Simple Agreement for Future Equity (“SAFE”).
Up to USD 4 million; Finhaven Private Markets investors have access to USD 2 million at this time.
Each investor in the Financing (“Investor”) shall receive a SAFE, which shall represent that Investor’s respective portion of the Total Purchase Amount (for each Investor, their “Purchase Amount”).
British Columbia resident Investors “SBVCA Investors” may be eligible for a 30% investment tax credit in respect of their participation in this Financing, provided that such Investor meets the applicable eligibility criteria, and subject to the maximum credit applicable under the Small Business Venture Capital Act (the “SBVC ACT”).
Please note that certain restrictions apply in respect of future transfers of equity securities issued to Investors for which tax credits are issued, in order to maintain the Investor’s entitlement to the 30% investment tax credit. Investors should contact the BC Investment Capital Branch or consult with its own professional advisors to learn more about the restrictions on future transfers.
It is a requirement under the investment tax credit program that the SAFEs for which tax credits are issued must be “at risk”, meaning that under all Events, as described above, the SAFE converts into shares of the Company. Accordingly, the SAFEs issued in the Financing will include a waiver, applicable to all SBVCA Investors, of the right to receive any cash payment in connection with any of the Events.
1) Future Equity Financing – The SAFE entitles the holder thereof to receive such applicable number and class of shares (“Equity Securities”) issued by the Company on the closing of its next equity financing of not less than $4,000,000 (“Equity Financing”), at a price per share equal to the lesser of: (a) a 30% discount to the issue price of the Equity Securities; and (b) $25,000,000 (the “Valuation Cap”) divided by the Company Capitalization. For purposes herein, “Company Capitalization” means the sum, as of immediately prior to the Equity Financing or Maturity Date (as defined below), as applicable, of: (1) all shares of the Company (on an as-converted basis) issued and outstanding, assuming exercise or conversion of all outstanding vested and unvested options, warrants and other convertible securities, but excluding (A) all SAFEs issued under this Financing and all other SAFEs outstanding, and (B) any convertible promissory notes and/or debentures; and (2) all shares reserved and available for future grant under any equity incentive or similar plan of the Company, but excluding any equity incentive or similar plan to be created or increased in connection with the Equity Financing.
2) Liquidity Event – If there is a change of control of the Company or the Company’s initial public offering of common shares in its capital (a “Liquidity Event”), the Investor will automatically receive from the Company a number of Common shares in the capital of the Company equal to its Purchase Amount divided by the price per share equal to the quotient obtained by dividing the Valuation Cap by the Liquidity Capitalization as of immediately prior to the Liquidity Event. For purposes herein, “Liquidity Capitalization” means the sum, as of immediately prior to the Liquidity Event or Dissolution Event, of: (1) all shares of the Company (on an as-converted basis) issued and outstanding, assuming exercise or conversion of all outstanding vested and unvested options, warrants and other convertible securities, but excluding (A) all SAFEs issued under this Financing and all other SAFEs outstanding, (B) any convertible promissory notes and/or debentures, and (C) all shares reserved and available for future grant under any equity incentive or similar plan of the Company.
3) Dissolution Event – If there is a (i) voluntary termination of operations; (ii) a general assignment for the benefit of the Company’s creditors; or (iii) any other liquidation, dissolution or winding up of the Company (excluding a Liquidity Event), whether voluntary or involuntary (a “Dissolution Event”), the Investor will, at its option, either (i) receive a cash payment equal to the Purchase Amount (subject to the following paragraph and the liquidation priority set forth in Section 1(e) in the SAFE Agreement) (the “Cash-Out Amount”); or (ii) if the Investor fails to select the cash option within the time period specified by the Company, receive from the Company that number of Common Shares that is equal to the quotient obtained by dividing the Purchase Amount by the Liquidity Price, and such Common Shares will be issued to the Investor immediately prior to the consummation of the Dissolution Event or such earlier time as determined by the Company.
4) Maturity Date Conversion – If an Equity Financing, Liquidity Event or Dissolution Event have not occurred by the 24-month anniversary of the initial Closing Date (as defined below) (the “Maturity Date”), then on the Maturity Date the Company shall automatically issue to the Investor such number of the Company’s then-highest ranking shares as is equal to its Purchase Amount divided by the price per share equal to the quotient obtained by dividing $20,000,000 by the Company Capitalization as of immediately prior to the Maturity Date. Until the SAFE has been converted in accordance with an Equity Financing, a Liquidity Event, a Dissolution Event, or the Maturity Date, the holder of the SAFE shall not be treated as a shareholder of the Company. SAFEs do not bear interest.
The Company’s share capital as of the date of this Term Sheet is
comprised of: (i) an unlimited number of Common shares,
13,620,749 of which are issued and outstanding, (ii) an unlimited
number of Class A Preferred shares, issuable in series, an unlimited
number of Series 1 Class A Preferred Shares, 7,370,569 of which are
issued and outstanding, and (iii) 2,816,406 Common shares that
remain available for issuance upon the exercise of options under the
Company’s Stock Option Plan, of which 1,778,632 options to
purchase Common shares have been issued and are currently
outstanding, and 1,037,774 options to purchase Common shares
remain reserved for future issuance.
Pro Rata Right
Each Investor will have a right to purchase their pro rata share of the Equity Securities issued in the Equity Financing, which pro rata share will be calculated as the ratio of: (a) the number of Equity
Securities issuable to such Investor upon conversion of their SAFE in the Equity Financing to (b) the sum of (i) the Company Capitalization and (ii) the aggregate number of Equity Securities
issuable to all Investors upon conversion of all SAFEs in the Equity Financing. The Pro Rata Right shall automatically terminate upon the earlier of (A) the initial closing of the Equity Financing; (B) immediately prior to the closing of a Liquidity Event; or (C) immediately prior to the Dissolution Event.
Use of Proceeds
Sales expansion and growth with a focus on the US market. Leadership
team expansion. DermEngine diagnostic AI clinical trials, regulatory
approvals, and commercialization.
Private placement securities carry risk and, if you invest, you will be asked to confirm that you understand you could lose all your money. If you need to redeem your investment before its term expires, you may incur additional costs and you may not be able to redeem at all. There is no secondary market where you can sell these securities.
Maryam Sadeghi, PhD
CEO and Co-founder
Maryam Sadeghi, the CEO and Co-Founder of MetaOptima Technology, completed her PhD in Computing Science at Simon Fraser University in the Medical Image Analysis lab.
In 2012, she co-founded MetaOptima Technology in Vancouver, Canada, where MoleScope and DermEngine were developed for intelligent skin analytics, imaging, and management. The company was one of ten that were shortlisted for the 2013 BCIC New Ventures Competition, and won a $40,000 Wavefront Wireless prize package. In 2014, Dr. Sadeghi also won the Venture Prize from Coast Capital Savings.
From 2013-2015, Dr. Sadeghi was director of the Digital Health Hub (Innovation Boulevard), where she was actively involved in R&D and commercialization activities. She also worked closely with the Gerontology Research Center (GRC) at SFU on innovative health solutions for senior care and independent living.
In 2016, Dr. Sadeghi made the Business In Vancouver’s Forty Under 40 Awards List for her innovative work and successful commercialization of DermEngine (an intelligent dermatology platform) and MoleScope (a mobile dermoscope).
Recently, Maryam was appointed as a MITACS Research Council member, was credited as one of BC’s most influential women in BC Business Magazine, and her company was listed as a “Ready To Rocket” business in the area of digital health.
Since its development, MetaOptima has become one of the fastest growing digital health technology companies in Canada, and continues to strive to empower physicians and patients for better care outcomes.
Majid Razmara, PhD
CTO and Co-founder
Majid Razmara, the CTO and co-founder of MetaOptima, received his PhD in Computing
Science from Simon Fraser University. Coming from an extensive background in artificial
intelligence (AI) and big data, he has worked in dermatology imaging and AI for diagnostics and
therapeutics as well as natural language processing.
Majid has several publications in these areas in major journals, and has worked closely with
some of the top centers of excellence in designing and implementing effective AI solutions for
Currently, Majid manages the technical team, including Hardware, R&D, Data and the Dev team
at MetaOptima. In 2019, he received the inaugural BC CTO award in Product Breakthrough of
the Year. Additionally, MetaOptima was the winner of the ITAC Ingenious Award under Majid’s
leadership for the DermEngine platform as the future of intelligent dermatology and skin cancer
Scott Farquhar, Co-Founder & Co-CEO of Atlassian, a global software company which builds tools to help teams unleash their potential. He and co-CEO Mike Cannon-Brookes started the company soon after graduating from college, funding it with credit cards. Atlassian, which doesn’t have a traditional sales team, boasts NASA, Tesla and SpaceX as customers. Scott Farquhar is cofounder of Pledge 1%, which urges companies to donate at least 1% of equity, employee time or products to charity.
Hamed Shahbazi, is the CEO and Founder of Well Health Technologies Corp. Mr. Shahbazi is a technology focused operator and investor with more than 20 years of experience. He founded TIO Networks Corp., a TSX-V listed company, which was acquired by PayPal Holdings, Inc. in 2017. Mr. Shahbazi served as the CEO and Chairman of TIO Networks Corp. from its inception in August 1997 until its acquisition in 2017.
Daniel Petre, Partner/Co-Founder at AirTree Ventures, is the father of three girls, Philanthropic internet entrepreneur Daniel Petre is also one of Australia’s most successful technology and media executives. A former lieutenant to Microsoft billionaire Bill Gates, he was the Managing Director of Microsoft Australia. In 2001 Daniel and his wife Carolyn founded the Petre Foundation, in which they have given thirty-five percent of their net wealth to Australian charities and organisations.
A BCIC New Ventures Competition Winner
Plug and Play Startup Showdown Winner
BCIP Innovation Challenge Award Winner
Coast Capital Savings Venture Prize Winner
A Ready To Rocket Winner 2018 & 2019
Winner of ISIC Disease Classification AI Competition 2018
Member of Canada’s Digital Technology Supercluster
Winner of ITAC Ingenious of the Year Awards, 2019
BC Export Awards Winner for Advancing Technology and Innovation, 2021
The following documents are available in the data room:
Audited Financial Statements
Confidential Company Deck
Certificates of Incorporation
Product and Service Offerings and Pricing Information
Government Grant Information
Detailed Team Awards and Accomplishments
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Lancet Oncology June 2019 Report
In an independent reader study (June 2019), MetaOptima Technology Inc.’s technology resulted in 87.3% accuracy, outperforming board-certified dermatologists, general practitioners, human experts with more than 10 years of experience, and dermatology residents who collectively achieved an accuracy of 62.6%1
Click here to access the full Lancet Oncology June 2019 Report
The main product we have is DermEngine, a cloud-based intelligent dermatology platform used by over 3000 providers treating over 2 million patients for imaging, analyzing, documenting and coordinating care for skin cancers and other dermatologic concerns. The revenue model for DermEngine is on a SaaS basis where customers are provided with annual subscription services with ability to renew annually. Some enterprise customers would enter into multi year subscription contracts.
MoleScope, our affordable mobile dermatoscopes, are offered at a fixed price per product.
In addition to the two products we sell, we also offer implementation services for large enterprises on system integration and data migration. The services are offered based on an hourly rate.
We have previously raised Series A of USD 6.5M in 2018 to focus on development of the DermEngine. Since we have seen great tractions especially in the U.S. and have made good progress on the U.S. Food and Drug (“FDA”) journey of our Diagnostic AI tool – DermDx, we are now raising a Simple Agreement for Future Equity (“SAFE”)/Convertible Security round of USD 4M to accelerate the market expansion in the U.S. as well as supporting the FDA approval. Other focuses with the SAFE/Convert proceeds include leadership expansion (Chief Revenue Officer, Chief Medical Officer, Marketing Director), Dermengine AI commercialization and development on general dermatology AI. We have received the breakthrough designation from FDA in 2021, and are aiming to complete the process by the end of 2022.
We have identified a TAM of USD 3.5 billion as annual recurring revenue (“ARR”) which provides skin cancer diagnostics and therapeutics AI for general dermatology, integrated health systems, public health, tele-health and Electronic Medical Records (“EMR”s). We have also identified a Potential Available Market (“PAM”) of USD 10+ billion in ARR that covers skin care and cosmetics. The Total Addressable Market (“TAM”) for the U.S. market by itself is USD 2 billion ARR.
Penetration of the US market was the number one priority of MetaOptima’s strategic plan for 2020/2021. Based on the success of this strategy in 2020/2021, we have decided to continue this strategy in 2022/2023 as well. The U.S. is the biggest healthcare market in the world and entering this market has opened up great opportunities for us, as a Canadian company. We have started and will continue to target the market segments of integrated health systems, cancer centers/Universities, tele-health and retail health in the next few years.
In parallel to the Simple Agreement for Future Equity (“SAFE”)/Convertible Security, we are raising Series B to continue to support the U.S. market expansion, the commercialization of the diagnostic Artificial Intelligence (“AI”) tool – DermDx and the development of the general dermatology AIs. The Series B will be in the range of USD 15-25M and will support for the next following 3 years. We are open to Initial Public Offering (“IPO”) or Mergers and Acquisitions (“M&A”) following the Series B as we believe the success in rolling out the diagnostic AI tool will add great value to not only the business but also the dermatology field.
The SAFE investment allows BC based investors to receive the 30% eligible business corporation (EBC) tax credits. Individual investors are entitled to a 30% refundable tax credit with up to an annual maximum tax credit of CAD 120,000, whereas corporation investors are entitled to a 30% non-refundable tax credit but there is no annual tax credit limit. (Restrictions Apply)
The valuation on the SAFE is close to our Series A valuation as we would like to make the process easy for all the investors.