A Young VC Resurfaces with His Year-Old Startup: Spruce

RayBradfordEvery month, a few startups that enable patients to consult with doctors without visiting their offices seem to emerge from nowhere. It’s no wonder. According to the research firm IHS, revenue from these so-called telemedicine companies could hit $1.9 billion in 2018, up from $240 million last year. That shift owes largely to the Affordable Care Act, which is pressuring doctors to help drive down costs, but it’s also easy to imagine that a growing number of doctors likes the prospect of practicing medicine from anywhere, at any time.

Some companies, like Teladoc — which just raised $100 million from investors — have begun partnering with insurance companies like Aetna and Blue Shield of California to offer subscribers telemedicine services as an added benefit in their coverage. Others like venture-backed HealthTap and Doctor on Demand, both of which offer live videoconferences with doctors, are going straight to consumers.

A year-old company, Spruce — founded by former Kleiner Perkins Caufield & Byers partner Ray Bradford and launching publicly today — has a slight twist on the latter model. The 11-person, San Francisco-based company is debuting a mobile app that enables patients to pay $40 to consult with doctor but doesn’t give them instant care. Instead, users log on to the app, provide details about their specific condition, and receive a response from a board-certified physician within a day. (If a prescription is required, that information gets forwarded on to the pharmacy of the user’s choice.)

It doesn’t sound terribly revolutionary, but as Bradford explains it, the market opportunity makes up for a lot. “The majority of healthcare will be tech enabled and delivered via mobile devices. If you think about size of market and volume of doctors, you start to appreciate what a massive shift this will be, and we think the trend is just getting started.”

Earlier this week, we chatted briefly about Spruce, which is first targeting patients with acne problems but plans to expand into other ailments once it nails down its act.

Why acne first?

Fifty million Americans have acne. It’s not just a teenage problem. Most doctors visits are by adults. Meanwhile, the average wait time to see a dermatologist in the U.S. is 30 days, so the majority of people settle for over-the-counter solutions.

Why not employ videoconferencing, as are many other telemedicine startups?

It’s more convenient. Both the patient and doctor are doing things on their own time. If you’re on the clock with a doctor [Doctor on Demand customers pay $40 for 10 minutes or so with a physician, for example], maybe I can’t share everything I want to share. Likewise, the [offline] doctor is answering my questions, rather than going through the motions of collecting information in a rote way.

You left Kleiner to start this company in August of 2013. How much have you raised and will you be in the market again soon?

We raised $2 million in seed funding from Kleiner, with participation from Baseline Ventures and Cowboy Ventures. We raised it later last year [so we’re not raising again just yet].

You spent a couple of years as a VC and you worked previously in product development at Amazon Web Services. How do those experiences inform what you’re doing now?

The biggest way is seeing the importance of picking a big market, and you don’t get a much bigger market than healthcare.

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