Interview with Aswin Gunasekar & Scott Pantel | Zeto - Rapid EEG Brain Monitoring

Transcription

Scott Pantel  0:00  

All right, good afternoon. I'm here today with Aswin Gunasekar, CEO of Zeto. Aswin, welcome.

Aswin Gunasekar  0:06  

Thank you, Scott. Nice to be here with you.

Scott Pantel  0:10  

So good to have you here today. You were a presenter at our meeting earlier in the year. You're one of our really exciting presenters at the meeting we'll be having in March. For those of the folks checking in today that don't know, what is Zeto? Who is Zeto? And how did you find yourself there? Give us a little background.

Aswin Gunasekar  0:29  

Yeah, so Zeto, we are transforming EEG brain monitoring for healthcare. So EEG is just like EKG, but for the brain. So it's electrical activity that's emanating from the brain. And it's an important diagnosis, procedure for various neurological conditions, as you think, from epilepsy, seizures, sleep disorders, to artists and and even has a lot of monitoring, value for stroke and so on. So it is a continuous time scan of the brain, as opposed to an MRI or CT, which is a image snapshot. So what we are doing is basically have brought in a massive process improvement for being able to access eg any healthcare facility without needing a trained technician to glue down the wires. And on the back end, we also offer a very sophisticated platform completely on the cloud. So the EEGs are recorded. And then an EEG technician can continuously monitor it by joining live, and also a neurologist that sitting remote, can read the EEGs and submit the report. We have various tools like artifact reduction, to automated seizure detection that we partner with excellent EEG analysis companies in the space. And also finally, an excellent report writer. So overall, what we're providing is a turnkey solution from EEG signal acquisition to treatment, in in combination with partners, so it's a full solution for EEG brain monitoring that we provide. And we currently in rapid EEG space.

Scott Pantel  2:24  

Really, really exciting. And, you know, I did a little research prior to our interview, and I discovered that you and I have something interesting in common. So I I studied computer science, you're a computer engineer, we both worked at a management consulting firm, you work at Price Waterhouse Coopers, I'm gonna date myself here, but I was with them when they were Coopers and Lybrand. So you see, you know that I was there many, many years ago. But now we both find ourselves in, in healthcare. How did you, how did your journey happen? How did you end up where you're at? I'm curious.

Aswin Gunasekar  3:00  

Yeah, I was in semiconductor chip design for a long time at AMD, there was a lot of depth, and I was getting deeper and deeper, was enjoyable, but I was looking for fresh breath of fresh air. So I completed my MBA while I was working at AMD, in the University of Texas at Austin. And during the final semesters is when, you know, new venture class came up, and it was done by a really excellent professor. So that culminated in, in, in a business plan competition in the in the business school. So I propose something which was probably at at that level in a very methodical and probably for healthcare, where I wanted to dig in and add some value. And I was inspired by my cousin who grew up with a severe form of epilepsy. And at that point, I didn't know how epilepsy was diagnosed, I just started looking into it. And it was electrical activity, and it was people throwing down wires. So instantly, I knew that I could do better science was not the limiting factor. But of course, business school, and my professor taught me that, go study the opportunity and and don't build it and expect they will come. So that's what that's what set the motion. And from then on. We won that competition, I moved to PwC to the Bay Area, but I knew that I wanted to start the company. So it was it was

Scott Pantel  4:31  

Such a great story. And I that's one of the things I love about our industry is often the things we end up working on are the things that touched somebody close to us and then we get to solve a problem and, and be engaged in high tech but do something good along the way. So that's outstanding. And I will note and I'll encourage people to take a look at the full the full interview and presentation. You have a very, very strong team on board as well. I want to talk a little bit about the market talking about the unmet need. Let's talk about reimbursement. How big is the how big is opportunity? How's the reimbursement? Let's talk about market market dynamics.

Aswin Gunasekar  5:09  

If you look at the market, it's if you see what a screening EG market is, and I'll just talk first about the US because begin we can put our hands around it. The what we call our routine or office EEG is the screening EEG that is done in hospitals, or physician offices as a screening method. And it's typically under one hour. And they want to know, when they when you come in reporting a a dizziness or you know, a seizure, they they'd like to put it for 20 to 40 minutes or one hour in that market is at least five to 6 million procedures done in the US annually today. And these are reimbursed at a very high rate, you know, 300 plus dollars global fee, technical is a big, big chunk, and then a professional component. So we're talking about, you know, close to 700 800 million plus dollars just in this office EG space. And then you go on to continuous EEG where people are monitored longer term, either in a hospital setting or in a home setting, that those are called ambulatory EEG. That's a much larger market. And then comes the Epilepsy Monitoring units, which are the ones that are being monitored for five to seven days, getting ready for a surgery, they're trying to localize lack relax the the abnormality. So so the longer term EEG market, which is admitted in the hospital, or the ambulatory market is another 1 billion plus easily in terms of reimbursements. And they also go through, you know, DRG reimbursements. And then finally the MMU the Epilepsy Monitoring units are much higher. I'm not even touching the sleep disorder, which is a company to track. I mean, I think in a base level, if you talk about EEG brain monitoring, it's pretty massive across neurological conditions. For example, now, EEG starting to take more and more effect or precedents into, you know, looking at clinical depression, you know, just based on the signature of the brainwaves, you can know, very categorically say whether the patient is clinically depressed or not. So the awareness is growing. And as you bring a product that makes EEG acquisition and accessibility and interpretation easier, the market widens.

Scott Pantel  7:40  

Right. Great. That's great. Talk about, you know, I don't think there's been much innovation in this space for some time. In fact, I reflect on a statement you made at our recent meeting, when you talked about really no substantial innovation over the last several years, if not dozens of years. How does your product differentiated? What are the big what are the breakthrough changes in your differentiations in your technology?

Aswin Gunasekar  8:08  

Absolutely. So the conventional EEG, let's take the front end, right like the conventional EEG, you bring in a big cart, you order an EEG, you bring in a big cart, there is a computer there, there is a CPU setup. And then there is an EEG amplifier with a lot of wires coming out. And a trained EEG technician that is certified in this typically they go to school for about a year. And they should have done X number of EEG is to be satisfied EEG technician, that's the base level. And then they have different certifications for intraoperative monitoring, long term monitoring, and so on. So what they're doing is they're prepping the skin, measuring and marking electrode locations and gluing down the electrodes because they need to be at precise locations. So a lot of work is going in, and you need that operator to to get an EEG done. What we do is, you know, make that process a lot lot better, even for the trained operator. So here you have sensors that are flexible, and I can actually show you one of the sensors. So here, you you, it's a Soft Sensor, it's got a custom gel coating. And then we have sophisticated because we're not doing skin prep, we have to have sophisticated noise engineering, you know, like a Bose noise cancelling headphone. Because the signal is weak, we need to protect the signal with high fidelity and be able to digitize it, and then translate it translate to the cloud transmitted to the cloud. So that's the front end. And on the back end when everything is live with video. It provides a great advantage because now you're not limited to the neurologist being on site. So now you're able to open up this important diagnosis test to any healthcare facility.

Scott Pantel  10:10  

Very cool. It's a cool looking product as well. And let's talk about the patient adoption. I think you talked about, you know, even parents and children being the kids being more, I don't want to say eager, but interested in accepting the technology. Let's talk about the patient reaction to the technology.

Aswin Gunasekar  10:29  

Yeah, so we always score very high with patient satisfaction, because number one, the current IDI methods, especially for longer term monitoring, skin breakdown is a big problem. It's a massive problem, because collodion are, it's kind of almost superglue, it's medical superglue, it does break skin down when it's been on the skin for more than a few hours. So and then it's also very hard to wash it off, not all of them are water soluble, only new electrode pace of becoming water soluble. But that's not that's not the norm at all. So given that, it's not a great experience for a patient. And just setup time alone takes about 45-50 minutes. You know, even for an experienced technician, so it takes about 30-35 minutes. So when you add all this up, it's not a great experience. And after that, you have to clean up the patient. So in that regard, patients absolutely love, you know, putting a helmet on and you know, taking it off and just walking out. So the patient patient satisfaction is wonderful. Absolutely. For us.

Scott Pantel  11:43  

That's great. I want to I'd like to go to a clip here, if you don't mind from our recent meeting, where you talk about the Apple like platform. So let's go to that clip for a second.

Aswin Gunasekar  11:54  

To enable such a future, you need to build it with a full stack play from hardware to software. Here, everything that's in green is already out commercial from us, and it's delivering value to the customers. We start with the hardware, the Z EEG headset, the current product is out there. Our next product, the continuous EEG variable, which we'll launch next year, will be a game changing product for long term EEG. Arzeda cloud can handle up to 10,000 simultaneous uploads and downloads today. And our streaming API is already enabling about a dozen third party apps. And in machine learning and AI, we already have the most advanced Report Writer out there. And we will be delivering seizure detection in a few months. And we hope to have computers reading EEGs by 2024.

Scott Pantel  12:44  

Okay, awesome. And so I found this this area of your business quite fascinating. Talk about talking about the Apple light platform and what it means for the future and sort of growth for the company. What what could be next?

Aswin Gunasekar  12:58  

Absolutely, yes, as we were developing the product, we in the earlier days, we were thinking, Okay, how, what kind of a step function, do we want to make the first gen product, and we were literally considering whether we want to make a local version of it, our you know, a cloud based version of it based on Wi Fi. So that was the initial thought process. By an Apple like platform, what we mean is more about a How can we bring a full ecosystem in place. So we were not just thinking hardware, we were actually thinking about hardware, and on top of that are cloud based software that can do 1000s of simultaneous uploads and downloads across the world across the United States. And then on top of that, apps, that we can open up our infrastructure to other smart neuroscientists where they can actually build great applications for different conditions such as stroke, post, drug rehab, autism, Alzheimer's detection, what whatever, right like, so that opens up another window. And then finally, being able to build applications of our own and integrating other excellent, EG service providers applications for the existing markets. So that is how we planned this ecosystem. And that is how we built it from scratch. It's hard to kind of change it later in the game, if you built it on a different kind of framework. So that is what I meant by an apple like ecosystem, and it has paid really good dividends for us. 

Scott Pantel  14:48  

That's great. And this also reminds me of I think another element to what you're working on is that it's not just about the capturing of the data, but it's the interpretation of the data, in fact, you referenced that in your presentation? And it seems like because of your model, a potential exit down the road may open up beyond just the traditional health care companies, or is there any consideration that? I don't know. And IT giant or a tech player may be interested in partnering up with Zeto? At some point?

Aswin Gunasekar  15:20  

Absolutely. So for us, the collecting a lot of brainwave data. And it's time it's time based data. And it's a lot of information that is coming in, are tagged with excellent events, you know, buy healthcare facilities, right. So for the ones that give us access to, you know, analyzing them, and extracting value and giving that value back to our customers, there is tremendous value with respect to machine learning and AI. And that's where tech companies play a role. So what they're looking at is, hey, you know, Can I can I apply my tensor flow algorithms, and see if I can extract a lot of value from a database that is across a large patient set, and, you know, has information across various indications, right. So when you see that, you know, tech companies see a C major value to just acquiring such a company. And then building on top of it, we're talking about companies like IBM, or barely or Qualcomm, they're all playing, and they're all very, very excited about entering healthcare. And in what form will depend, we will also need to see and evolve how much of a database we have and what kind of value we can provide. But that's that's kind of the the tech play. It is it is kind of a distance shot, but there is serious potential there. 

Scott Pantel  16:59  

Yeah, that's great. Let's talk about your current capital situation. Are you raising capital is is an opportunity open for folks to jump in with you talk maybe a little bit about current capital situation and plans for 2023?

Aswin Gunasekar  17:16  

Yes, we are in the process of raising our next round. It's a Series B by plank, mainly to accelerate commercialization, we have excellent commercial traction with a lot of our customer segments, ranging from hospitals, to physician offices, to to pharma clinical trials. So right now we want to build out, we have a product market fit, we have our messaging, we have our sell story, we want to actually take it to the next level, to accelerate ourselves and and get to profitability with the with the next round, we see a clear path to profitability, and cashflow, positive, positive state with this next round. And yes, we are raising money, do just that. And always open to talking to investors or you know, someone like me, is always open to talking to investors.

Scott Pantel  18:15  

That's great. Let's talk about use of proceeds, generally, Aswin, and where will those buckets go in terms of dispersing the capital?

Aswin Gunasekar  18:25  

Gotcha. Yeah, that's a great question, Scott. For us, with respect to how we're going to use the capital, we are the predominantly the main one is going to be towards commercialization. And that is a good percentage. And B, we have excellent unit level metrics that we want to scale up. From a salesperson productivity standpoint, we have achieved those good numbers, and we want to scale that up. The second piece is r&d. We have two really good next generation products that we're working on. And we will be getting those ready to market. So a lot of that, which will also start up another market axis curb and improve our enterprise value by a tremendous amount. So that's the other piece that we're building. And then also finally, to build out our executive team, in in, in having a top level leadership, proven top level leadership from other companies that we can quickly get in and scale the company out. So that's pretty much three benefits.

Scott Pantel  19:36  

You have an exciting future indeed. Zeto is the solution the EEG solution of the future and I want to thank you for your time. I love what you're doing with your company. You have a tremendous team. Huge support from LSI and we look forward to seeing what 2023 and beyond brings for you. Thank you very much.

Aswin Gunasekar  19:57  

Thank you. I'm a big fan of LSI and enjoy your conference is one of the best for medical technology absolutely so looking forward to being there in California in Southern California again with you in in 2023. Thank you

Scott Pantel  19:57  

Thank you, Aswin.