Scanadu gets the #SCAMadu Rage of the Crowd, misses XPRIZE finals, raises $6.5 million

click to enlargeUPDATED December has been a mense horribilis for Scanadu, what with bricking the Scanadu Scout next year, missing the Qualcomm XPRIZE finals and a low equity raise.

Scanadu Scout heading to Doorstop and Paperweight-ville. This all-in-one diagnostic device, which promoted itself as a tricorder worthy of Star Trek‘s Bones, announced on 13 December that on 15 May next year, it will deactivate all units. (What Bones would say: “It’s dead, Jim!”) Users of this admittedly investigational device who purchased it for $200 starting in 2014, glitches and all, [TTA 5 Apr 14], are facing not only that it will ‘cease to function’ but also presumably the loss of access to their data as well. A Scanadu spokesperson to TechCrunch last week (13 Dec) attributed the action as necessary to comply with FDA regulations requiring investigational use devices to be deactivated at the end of the study.

Scanadu also failed to make the Qualcomm Tricorder XPRIZE Final Two, also announced on the same day. They had already teamed with Intelesens of Northern Ireland. (More below)

Mobihealthnews reported on Sunday 18 December that Scanadu completed an additional $6.5 million equity funding, according to a SEC filing. Investors are not disclosed. The funding dated 7 December is considerably less than their $35 million Series B raise, primarily from Chinese VC investors, back in April 2015 which is the bulk of their now $56.1 million funding to date (CrunchBase). It is hard to interpret this one way or another, but MHN’s Jonah Comstock doesn’t hesitate to relate it to both the Scout bricking and the XPRIZE loss. To this Editor, it’s either conservative or like a line of credit, but why now, and not what you expect after a healthy Series B.

Returning to the soon-to-be bricked Scouts, there is no mention of current customer compensation, swap or discounting on future purchases of other Scanadu products, such as Vitals, the successor to the Scout, or Urine for urine testing. At the time of sale via the wildly successful Indiegogo crowdfunding site or later, Scout customers received a notice that “You will be in the study for a minimum of 12 months and the study will remain open for 18 months or until FDA clearance of Scanadu Scout. After the 18-month survey, your continued participation in the study will be purely passive, meaning you will not be asked to do anything and only your usage data of the Scanadu Scout will continue to be collected” which implied continued functioning.

Presumably Scanadu management didn’t think customers would be a little aggrieved? The social media reaction was dramatic, upset with losing the use of the units, and more extremely, calling out Scanadu as a fraud, even suggesting that FDA was shutting them down. Purchasers sent nasty tweets to founder/former CEO Walter De Brouwer, who had stepped away in April and is now CEO of a below-the-radar startup, doc.ai. Some on Twitter suggested that they be able to brick their personal data, which is being used by Scripps Translational Science Institute for a study with projected release in May 2017. The irony is that the crowd that enthusiastically funded Scanadu’s initial success, is now turning on the company. MedCityNews, STAT

Another coming up short for Scanadu was not making to the Final Two of the years-long Qualcomm Tricorder XPRIZE, after long being tipped as the lead horse. It made it through the two-year Qualification Round, last April joining with Intelesens from Northern Ireland. The Final Two are Dynamical Biomarkers Group (Zhongli City, Taiwan) and Final Frontier Medical Devices (Paoli, PA). The Intelesens-Scanadu team won a Milestone Achievement Award for performance in Lab Test Sessions and Human Test Sessions, a recognition for some in that last round.

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