Marcos Vinicio Vargas, founder and CEO of Costa Rican AI healthcare company, Ainnova Tech, gives us an insight into the entrepreneurship scene in Costa Rica as part of our Perspectives series. Marcos has been an entrepreneur since his teens, and in the article he shares more about his passion for technology, the extremely personal story behind his interest in healthcare, and his excitement regarding the booming start-up scene in Latin America.
TechLATAMAsia invited him to share his experience establishing and raising capital for his start-up, as well as his perspective on the opportunities in Asia. This article was originally written in Spanish.
What is Ainnova and how did the company begin?
Ainnova Tech is a healthtech start-up dedicated to the development of solutions for the early detection of diseases through artificial intelligence (AI). The company was chosen as one of the Top 100 start-ups in the world competition for the Entrepreneurship World Cup, which will be held in the upcoming months, in Riyadh, Saudi Arabia.
I founded the company because I was passionate about finding ways in which artificial intelligence could help improve the world. I really wanted to make a real positive impact, and I realized at that time that a lot of progress was being made in AI but that progress was not being felt in the healthcare sector, even though we could save many lives with technology. This was when I embarked on this path to discover how I could leave a legacy of touching people’s lives through a technology that I’m familiar with.
Then Rodrigo Herrera, an expert in AI and data science, joined Ainnova because he shared my vision. We set out on this journey to find solutions to different problems, such as shortening waiting lists in global health systems, and making the workflow of radiologists more efficient. We also focused on the detection of breast cancer, which is the leading cause of death of women in the world, so that we could provide patients with accurate and timely information. Thus began the next stage of the company, which was full of challenges but also great learnings. However, we ran into a problem eventually because we realized that this solution is very difficult to scale up within the public hospital sector, so we decided to save this project for the future. Subsequently, we went in search of a highly scalable business model.
And did you find it?
We found Dr. Lihteh Wu, an internationally recognized retinal ophthalmologist with significant academic and scientific achievements. Thanks to his feedback and support, we decided to explore the area of visual health, and specifically to use our previous concept of finding anomalies in medical images within this space to bring a value proposition for both patients and medical professionals. This is because through retinal images, ophthalmologists can obtain a lot of information regarding the state of a patient’s visual health, which is incredibly useful for attacking a significant problem: diabetic retinopathy.
In general, 500 million people around the globe have diabetes, with 40% of them developing diabetic retinopathy, the leading global cause of blindness in working-age adults. Given that 95% of these cases are preventable, early detection is key but in real life applications, up to 49% of these diagnoses are currently inaccurate.
Therefore, the team began work on a dataset with tens of thousands of diagnostic retinal images. With the support of Dr. Lihteh Wu, we started validating all the images, reviewing every detail, while training a deep learning model with the curated data.
But even with the deep learning algorithms ready, we had to find a way to market the product. It was essential to find a method for mass screening and given that 39% of the population visits an optometrist at least once a year, the team decided to start with opticians to help make the technology accessible en masse. We selected a pay-per-use model so that the technology would be free for the opticians themselves, with the patients paying per use. Once diabetic retinopathy is detected, these individuals will then be referred to an ophthalmologist to get professional help.
How did you resolve this problem?
We created VisionAi, a powerful AI-based web platform that can be accessed securely from anywhere in the world. It detects diabetes early, and in so doing, prevents blindness and other diseases, with high accuracy and in a matter of seconds.
We can say to a hospital, send your entire waiting list of people who need an appointment for the ocular funds (the inside, back surface of the eye) to these opticians, who are using our platform. Through the use of our AI platform, they can eliminate that list in record time, increasing the efficiency of diagnosis while referring only those who need to be referred to a specialist. The platform will be available to opticians very soon, and actually they can already request early access to a demo to be the first opticians in their country to have access to this technology.
As a start-up from Costa Rica, how was the experience of raising capital ?
We are in fact in the stage of raising our first round of capital funding with a New York firm to help us launch VisionAI as well as other solutions, so that we can eventually scale our operations to other countries. This negotiation is already advanced and we are only in the formal stages. Raising capital is very different from the point of view of a North American fund compared to a Latin American one, as different valuation methods and different financial instruments are used, mainly equity or SAFE.
In addition, we are in negotiations with a top hospital in the region specifically regarding collaboration in R&D of new solutions, to which they can contribute their specialized medical resources.
Was it more or less difficult than expected?
Very difficult. For a biotech or health tech company, it is more difficult to raise capital at the beginning, since their traction and metrics are less conventional and their solutions or products are not ‘fast-to-market’. For example, an e-commerce start-up easily obtains sales, which is also something you can measure. On the contrary, for us, you have to measure the value of your intellectual property and its innovation potential with regard to a big problem in the market, and not all venture capital or investment funds have experience in this field – or the right vision. As they say: “the strongest trees first put down root”.
Now, we are receiving interest from a group with extensive experience in this sector, which opens a giant door for us and gives us possibilities for further global growth, which would facilitate entry into the US market in our next phase.
Any tips for other Latin American start-ups?
Don’t just focus on the solutions, but the biggest pressing issues facing the world and foster a passion to solve them. Keep on the path and don’t give up.
To help drive you forward, it is essential to have a strong purpose. This is a tough job, and it is not for everyone. Having a purpose gives you the strength to carry on despite the challenges that you will face, and to fulfill your goal. We work on Sundays, we work early, we work late, and we do all this without rest. You will notice that it gets easier overtime – the first years are the hardest, but if you pull through, you’ll be fine.
How do you think the entrepreneurship space in Costa Rica and Latin America in general has changed in the last five years?
A few years ago, hearing about start-ups in Costa Rica or Latin America was not a common topic. Innovation came only from top universities like MIT or Silicon Valley. But this has changed drastically. For example, Costa Rica is now a leader not only in environmental issues, but we are also the country with the most medical device companies per capita in the world. Costa Rica is actually one of the biggest innovators in medical technology. We have a lot of talent, very good education, and brilliant people who, thanks to this new era of digital transformation, are exploring and undertaking new ideas. Incubators, accelerators, investment funds for seed capital, and so on, have all emerged recently.
In fact, few people know that Costa Rica has our own astronaut: Franklin Chang Díaz, who has been to space 7 times and is a member of the NASA (the US National Aeronautics and Space Administration) Hall of Fame. He founded the company, Ad Astra Rocket Company, and brought it to Costa Rica with highly ambitious technological projects, which has inspired us all. He taught us to transcend our mental limits.
Now that there are more unicorn start-ups, more investors and more capital, would it be easier to create a start-up now?
Totally. This is the perfect time to start a company, especially since the region is in a phase of transition towards a new age of technology, and we are at a point of inflection with a lot of room for innovation.
2022 is going to be a boom year for investment and disruption in Latin America. We will probably see many successful IPOs on Nasdaq as well as successful private placements in the next few years, all with the aim of helping Latin American start-ups to expand and conquer the world. No one wants to lose this opportunity.
How do you see the Asian market? Do you have plans to enter it? Do you know that region a little?
Asia is always a very interesting market. We have plans to enter it but only in the long term to take advantage of our geographic positioning and the current windows of opportunity that exist here today. Currently, we will continue to focus on Latin America, with plans to enter the US and Europe, but after that, we will look at Asia, Middle East and North Africa and then the larger African continent, where we believe huge opportunities do exist, though we will certainly require a strategic partner.
Changing the subject, where did your interest in AI for the healthcare sector come from?
If I do a little introspection, it all originated when my oldest son developed a strange disease at only 4 months old that had the potential to adversely affect his heart. None of the doctors had any answers and I had to search desperately for other solutions and sources of information. Dealing with the stress and anguish of the diagnosis, the uncertainty, the sense of helplessness, and the impotency I felt – all of that became a triggering experience for me. During those dark times, I investigated a lot about the medical sector as well as spoke to many healthcare professionals in many parts of the world.
Thankfully, with the grace of God, everything turned out well for my son. He is today a healthy, active and extremely bright boy. But my interest in medical technology persisted because I could see the important role that technology played in the diagnosis and treatment of diseases, and more significantly, the importance of access to that technology for patients and their families. Though it took a while before I became fully involved in this sector, now as part of Ainnova, this background and experience was instrumental in my journey to today. I think if we are prepared, remain curious and stay actively engaged, the right moment will eventually arrive for us to put our plans into action.