Friday, August 22, 2008

Forerun finds funding from MTDC, others

By Brendan Lynch

Forerun LLC has landed nearly $1.4 million in Series B funding from the Massachusetts Technology Development Corp. and other investors.

The Waltham-based health care informatics company’s product, Forerun ED, is intended to help hospital workers manage the flow of patients through emergency rooms. In 2006, Forerun licensed the software from the Beth Israel Deaconess Medical Center in Boston, an equity partner in the company.

Forerun last received an angel round of about $750,000 in June 2007.

The company has seven employees now and plans to expand to about 25 within a year and a half for a planned commercial rollout of its product, according to CEO Ken Wolfe. The company will also use the funding to finish developing the product based on the feedback of hospitals already using Forerun ED: Beth Israel and its affiliate hospital in Needham; the Sturdy Memorial Hospital in Attleboro; the Landmark Medical Center in Woonsocket, R.I.; and the South Nassau Communities Hospital in New York. As early adopters, the Sturdy, Landmark and South Nassau hospitals pay half price for the service.

Depending on the size of the hospital, the company plans to charge about $200,000 to $250,000 per year, including installation, for its software-as-a-service product, which can be displayed on plasma TV screens and computers, Wolfe said.

The MTDC put up $500,000 of the $1.4 million investment. MTDC vice president Jerry Bird said the organization spent time at the Beth Israel emergency room and came away confident that the CIOs and CFOs wouldn’t be the sole beneficiaries of the software.

Bird said investing in companies selling software to hospitals can be tricky. Decision-makers are often difficult to identify, and large, entrenched competitors can often squeeze out newcomers, Bird said. 

In the past year, the MTDC has invested $5.1 million, Bird said.