Kennet fund kicks off with €7M for Telemedicine Clinic

Investment

Kennet Partners has announced the first investment from its new fund, Kennet III LP, into Telemedicine Clinic, of Barcelona, Spain, a provider of online radiology services. Kennet led the €7 million round.

Telemedicine Clinic’s Teleradiology services involve the transmission of digitised diagnostic images such as X-rays, MRI and CT/PET scans to a remote location for interpretation by certified radiologists. In recent years, demand for advanced diagnostic scans has increased significantly, leading to long waiting times for patients and highlighting a shortage of specialised radiologists in many countries.

As a result, hospitals are looking to teleradiology to provide access to sub-specialty diagnostic services, and to achieve their objective of reducing patient waiting times. Telemedicine Clinic was one of the first European providers of teleradiology services and is currently the leader in the UK and Europe.

According to market analysts Frost & Sullivan, some 91 million digital radiography examinations took place in Europe in 2006, a figure that is expected to grow to 198 million by 2010, with most of the increase coming from MRI and CT/PET.

It is estimated that in the most advanced European markets for teleradiology, the UK, Spain and Scandinavia, fewer than 4 per cent of these scans are currently being interpreted remotely. Evidence from more mature markets, such as the US, indicates that up to 20 per cent of diagnostic exams will eventually be reported remotely.

Telemedicine Clinic was founded in 2001 by David Bäckström and Henrik Agrell and today, more than 80 experienced radiologists work for the company. From the company’s centralised reading facility in Barcelona, a large base of UK radiologists serve the UK market. The company also provides European hospitals with on-call overnight services from Sydney, Australia, and has pioneered the establishment of quality and control processes for remote reading centres.

“With Kennet on board, [we] will further accelerate [our] growth and presence in the UK and other geographic markets and to develop new service offerings. Our growing sub-specialty expertise with the most advanced imaging modalities, such as CT/PET, will enable us to remain a pioneering provider of telemedicine services to hospitals worldwide,” said David Bäckström of TMC.

As part of this financing, earlier investors Active Capital Partners (ACP) and Inversions en Innovació a Catalunya, F.C.R. (Invernova) achieved a partial exit for their shareholdings. Invernova was the first institutional investor in TMC in 2004.