WPI Venture Forum taps DataPacT as Biz Plan winner

November 13, 2007

Milford, NH-based DataPacT Systems LLC won out over two other finalists for the WPI Venture Forum’s Business Plan Contest. At the meeting, held November 13, three finalists vied for a prize worth $15,000 in cash and professional services.

The winner had a business concept to which many of us can relate - the need to compress large image files into smaller ones for easier sharing among users, without compromising image quality.

John Lai of DataPacT Systems claims that his system compresses data and images to be transmitted hundreds of times faster than current compression modes. His company uses compression techniques approved by DICOM, a medical industry standard. He’s looking to tap into subscription-based revenues. In the company’s five-year projections predict $28 million in revenues and he’s seeking Series A funding to carry it through.

Judges questioned the long-term need for the company’s product in light of the plunging cost of computer memory. With one terabyte costing $400, it’s not unreasonable to expect similar low costs for a petabyte some day, said judge Steve Rubin. To which Lai replied, "The industry is suffering and we can deliver the solution." The crux of the problem, he said, is the federal requirement to keep data for 7 years. An MRI image averaged 500 megabytes in 2004, he noted. “The cost is not just about hardware. It’s the human cost” of managing all those files, Lai said. And with the advent of medical outsourcing, technology is needed to allow data readers in Sri Lanka to create a file that U.S.-based workers can open. At present, he said, a 15 megabyte file has to be burned onto a CD because it takes so much bandwidth to transmit.

The two other competitors were two Massachusetts-based companies -- Corum Medical Inc., based in Sudbury, and Vipcort, based in Falmouth. Each of them had a defined market; Corum in health care and Vipcort in telecommunications.

Alan R. Kivnik

Corum’s Lumen1 product diagnoses anemia with an imaging system that reads hemoglobin intensity in the lower under-eyelid. Corum’s Lumen1 product analyzes blood vessels by, which, according to Corum, replaces the need for a CBC blood test, which is both invasive and costly, the company says. It projects a five year net revenue of $3,950 prt unit for a device that’s on a 510K FDA approval path. Its competition: finger stick, vein stick or a visual exam. The company is seeking $3.5 million to launch Lumen1. Founder Alan Kivnik, for whom Corum is Startup No. 4, says he’d expect the company to be cash-flow positive before the end of the fourth year.

Corum Medical is seeking $3.5 million in funding to create a for profit business, leveraging patent pending technology exclusively licensed from Brown University and Rhode Island Hospital.

In response to judges’ questions about the strength of its patent portfolio, Kivnik said there’s no way of knowing how viable it is until it is not challenged, or if challenged, the company has to defend the patent. He also explained that the ER market would need it as part of normal triage system but is historically slow to adopt it, so the product would have to launch in the general hospital market first. In response to questions on the product’s pricing, Kivnik noted that the first pulse oximeters, which measure hypoxia, came on the market at $10,000 – and are now down to $200. “Not until we become a de facto standard in health markets [would] we see a price erosion,” he said.

Kevin H. Mulvey

Kevin Mulvey of Vipcort is targeting companies with 100 to 1,000 employees which have at least 25 employees working from home, in order to integrate them into their employers’ PBX systems. The company is an integrator of VoIP wireless & wire line applications, services and hardware currently disseminated across hundreds of companies focused on niche products and services for the VoIP (Voice over Internet Protocol) market. Vipcort provides a collaborative managed-service for wireless and wire line; developers, service providers, resellers, interconnects and enterprises. Mulvey said there’s no single resource to provide services for the small to medium-sized business. He said CLECs and ILECS don’t develop new products because they don’t have the capital to do so. He sees his company as a packager for the systems that would be needed to bring outside offices into the PBX system.

Vipcort’s strategy is to bundle PBX-quality telecommunication services for home-based workers of large corporations, giving them communication parity with their office-based peers. Mulvey says Vipcort’s plan is to acquire IP Bridges LLC, a small technology company that currently has 15,000 lines under management, and which is developing leading edge integrated VoIP platforms. The company seeks $5 million in funding to accomplish its strategy.

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Last modified: Nov 20, 2007, 12:21 EST