Based in Oulu, Finland, Optomed develops lightweight, handheld fundus cameras and software solutions with integrated artificial intelligence (AI). Founder and CEO Seppo Kopsala explains how listing on the Nasdaq Helsinki exchange will benefit the company.
Optomed is a Finnish healthcare technology company and a global leader of handheld fundus cameras and eye-screening solutions. Optomed’s cameras are used for imaging the fundus and they are used in Finland’s largest public hospitals and private clinics. Internationally, the company’s cameras are used in 60 countries. Optomed’s cameras are integrated with screening software and Aritificial Intelligence (AI), that helps to diagnose blinding eye diseases such as diabetic retinopathy.
“I believe that with the development of AI we will also be able to identify other eye diseases. Our AI strategy consists of both, in-house development and collaboration with research teams and hospitals globally. In 2018 we acquired a Finnish software company Commit; Oy and deployed its software expertise as a platform for our AI services. We will see extremely interesting advances in our product development within the next five years”, comments Kopsala.
In addition to hospitals and eye clinics, Optomed’s goal is to take fundus imaging to primary care to be able to provide this service closer to the patients. This makes screening for eye diseases more accessible, and therefore helps in preventing blindness.
Diabetic retinopathy, a disease of the retina in the eye caused by diabetes mellitus, is the most common cause of vision loss in the working age population. Diabetes is one of the most widespread diseases, so there is high worldwide demand for eye screening. The automated analysis of fundus images using AI reduces screening costs and improves screening quality.
The Commit acquisition and the application of AI have transformed Optomed from a fundus camera manufacturer into a one-stop provider of eye-screening solutions. Optomed listed its shares on the official list of Nasdaq Helsinki Ltd in December 2019. One purpose of the listing was to give more prominence to the company and its products, both in Finland and abroad.
IPO already planned at an early stage
Listing has long been an element in Optomed’s strategy for the international commercialisation of one-stop screening solutions. Healthcare markets are slow to change and require systematic R&D, which in turn requires both resources and financing.
Founded in 2004, the company has been ambitious already from the beginning, but Kopsala points out that developing the technology took longer than expected.
“Only the current, fifth-generation, cameras match up to the founders’ original ambitions. Our latest camera, the Aurora, is at such a high level in terms of both usability and image quality, that it enables real commercial breakthrough in the conservative healthcare market.”
Kopsala also reminisces about the challenges the company has faced.
“We were near to end our operations in the period of 2008–2010, when the financial crisis forced investors to scale back their financing. Fortunately, we managed to carry on and reach this point, where we’ve created a global market for handheld fundus cameras. Now we have the opportunity to do the same for one-stop screening solutions with integrated artificial intelligence,” Kopsala continues.
“In 2010 we received our first large investor. Our commercial breakthrough came in 2014 when we signed an OEM agreement with Carl Zeiss Meditec. This OEM agreement with the world’s leading fundus camera provider showcased the quality of our products,” Kopsala comments.
Growth on three fronts
The global market for handheld fundus cameras is expected to grow by an annual rate of 11% during the period of 2017–2024, and as the market leader, Optomed is in the forefront of this growth.
“Our strategy is for growth on three fronts. We have a presence in 60 countries through our various sales channels. In terms of sales, the largest areas are USA, Europe and the Asian-Pacific region. We will base our growth on opening new markets and expanding to new customer segments and focus on the global sales of our comprehensive screening solutions with integrated AI. We will also target our resources on strengthening the markets that are important to us, mainly USA and Latin America. We’ve sold our devices in the US for several years through our OEM customers and therefore under a different brand name.
When entering new markets, Optomed will look to collaborate with local ophthalmologists to ensure that the operating model is suited for the target country.
A second front is expansion into new end-user segments, such as primary care, pharmacies and emergency care units. The third front will be new products based on research projects and broader product families.
Eighteen months from decision to fruition
When the decision to list was made, Optomed set out to enhance its processes and reporting to meet the standards set by the stock exchange. The company recruited a CFO and a Group General Counsel with previous IPO experience. Around eighteen months were spent on preparations.
“Governance requirements are in a totally different class for companies with shares listed on the official list compared to those for a growth company headed by engineers. We beefed up our economic governance and created a new type of management system. We started operating in compliance with stock exchange requirements as from the beginning of 2019, and we moved to quarterly reporting even though we were still fine-tuning some processes,” Kopsala relates.
He points out that listing gave the company more than just money.
“The listing process gave us more visibility, enhanced operational efficiency, and improved both predictability and process transparency. A listed company also gains a new type of credibility, making it easier to approach retailers and corporate customers.”
“We are no longer just a manufacturer of handheld fundus cameras, but instead a listed company of renown that develops comprehensive eye screening solutions that incorporate AI for players in the health sector. The listing process also strengthened our internal communications and added more structure to our strategy, so now we are better prepared for redeeming the growth promises we made to the market. We have learned to give governance issues and communications the high priority that being a listed company requires,” concludes Kopsala.
Optomed
What it is: A medical technology company founded in 2004 and based in Oulu, Finland, that develops handheld fundus cameras and eye screening software combined with artificial intelligence. Has delivered over 10,000 fundus cameras worldwide since 2013. Founder Seppo Kopsala.
Where it is: Established in Oulu, Finland. Offices also in Espoo, Finland, and Shanghai, China. Distributors in over 55 countries. OEM (Original Equipment Manufacturer) customers include four international ophthalmic equipment manufacturers.
Personnel: 108 employees including an R&D team comprising of 58 people.
Products: Two handheld fundus cameras: the Optomed Aurora, a fifth-generation product, and the Optomed Smartscope PRO. Optomed also develops and manufactures fundus cameras for other brand owners.
Software applications: In addition to handheld fundus cameras combined with screening software and artificial intelligence for diabetic retinopathy, Optomed offers screening software for breast, cervical and colorectal cancer, as well as other software for healthcare applications.
Customers: Healthcare organisations such as hospitals, ophthalmic clinics and eyecare businesses. Also leading global medical technology companies and distributors such as Volk Optical Inc., Carl Zeiss Meditec Inc., Haag-Streit Diagnostics and Topcon Medical Systems Inc.
Patents: 55 international patents, including protection for camera optics solutions.
Owners: Ten largest owners since listing are Aura Capital, Seppo Kopsala, Mandatum, Tesi, Nordea Nordic Small Cap, Kaleva, Aktia Capital, OP-Suomi Pienyhtiöt, Aktia Nordic Micro Cap and Veritas.
Revenue: 15 million in 2019.
Web page: optomed.com
Seppo Kopsala
Who he is: Founder and CEO of Optomed.
Education: MSc in Industrial Engineering from the University of Oulu.
Earlier work experience: Previous employment includes business development positions in F-Origin, Myorigo and Head Consulting. Founder and CEO of Skillhouse 1999-2001.