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Mergers & Acquisitions

IDx rebrands to ‘Digital Diagnostics’, acquires AI company 3Derm Systems

August 20, 2020

Coralville based-company Digital Diagnostics, formerly known as IDx, announced this week that it has purchased 3Derm Systems, a move to expand its AI technology to detect more illnesses.

The acquisition comes as the company rebrands its name to Digital Diagnostics, part of a plan to continue to expand into medical specialties beyond its initial focus on eye care. The company is seeking to build a broader portfolio of autonomous diagnostic products.

In 2018, Digital Diagnostics received FDA approval for its medical device that uses AI to detect diabetic retinopathy without input from a doctor. It was the first such device with that approval. Now, the company hopes to develop 3Derm’s AI system, which detects skin cancer.

As part of the acquisition, Digital Diagnostics will take on 3Derm’s employees, according to Dr. Michael Abramoff, founder and executive chairman of Digital Diagnostics.

Since founding in 2010, Digital Diagnostics has grown rapidly. In Sept. 2018, the company raised a $33 million Series A financing round. According to Clay & Milk findings, this was the largest investment round raised by an Iowa company in all of 2018. The company filed paperwork in June of this year indicating it had raised an additional $12.5 million in funding.

Previous coverage

IDx files paperwork showing $12.5 million raise -June 17, 2020

Middle Bit: IDx’s AI diagnostics system launches in Retail Clinics -Dec. 26, 2019

IDx raises $33 million in Series A financing round -Sept. 27, 2018

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IDx rebrands to 'Digital Diagnostics', acquires AI company 3Derm Systems | Clay & Milk
A central Iowa ag-tech accelerator has secured more backers and finally has a name. The Greater Des Moines Partnership first announced the accelerator last year, naming four initial investors. On Monday, the Partnership said the program will be called the "Iowa AgriTech Accelerator" and named three new investors. The new investors include Grinnell Mutual, Kent Corp. and Sukup Manufacturing, all Iowa companies. They join investors Deere & Co., Peoples Co., Farmers Mutual Hail Insurance Co. and DuPont Pioneer. Each investor has agreed to put up $100,000 for the first year of the accelerator. Startups entering the program will receive $40,000 in seed funding in exchange for 6 percent equity. Tej Dhawan, an angel investor and local startup mentor, is serving as interim director until the AgriTech Accelerator names a permanent leader. Dhawan held a similar role with the GIA before Brian Hemesath was named as managing director. As interim director, Dhawan said his main job includes hiring the accelerator's executive director, establishing a business structure and initial recruiting for the first cohort. The accelerator will place few filters, such as location and product, on the applicant pool, Dhawan said. "When you’re seeking innovation, innovation can come from every corner of the world so why restrict ourselves," he said. One area the the AgriTech Accelerator won't recruit from is biotech. For its first cohort, the AgriTech Accelerator will work out of the GIA's space in Des Moines' East Village, Dhawan said. A future, permanent home is still to be decided. The accelerator's program will host startups from mid-July through mid-October, ending with an event connected to the annual World Food Prize. The GIA, which the AgriTech Accelerator is based on, also ends with presentations at an industry event. The accelerator has also started lining up a mentor pool. The Iowa Corn Growers Association, Iowa Soybean Association and the Iowa Pork Producers Association have agreed to provide mentors, as has Iowa State University. While the AgriTech Accelerator is loosely based off of the GIA, it will differ in its business structure, Dhawan said. The GIA runs through a for-profit model for both operations and its investment fund. The AgriTech Accelerator will have a nonprofit model for its operations and a for-profit setup for its fund. Dhawan said the nonprofit model is being used so the accelerator can better work with other nonprofit partners, such as trade associations. "These are all organizations that are nonprofits and can be amazing stakeholders without ever having to be investors in the accelerator," he said. "It becomes easier to work with trade associations in their nonprofit role when we are also a nonprofit." When it's up and running, the AgriTech Accelerator would be one of a handful of ag-focused startup development programs in Iowa. Others include the Ag Startup Engine out of Iowa State University and the Rural Ventures Alliance from Iowa MicroLoan. Matthew Patane is the managing editor and co-founder of Clay & Milk. Send him an email at mpatane@clayandmilk.com.
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