Chrysalis Ventures backs NextImage Medical

Last week, NextImage Medical Inc., a provider of outpatient radiology diagnostic services, raised $5 million in a Series A round of funding from sole investor Chrysalis Ventures.

The San Diego-based company aims to use the funds to expand its digital radiology network and help launch a pain management program in 2010, says Liz Griggs, CEO of NextImage Medical.

Griggs says she does not foresee the need to do another round of funding in the future. “This is it, this should take us to the exit,” she says.

Prior to Chrysalis, Griggs says that the company raised an undisclosed amount of funding from angel investors.

Chrysalis Ventures Managing Director Koleman Karleski, who joined the board as part of the funding, says that the venture firm invested in the company because the company’s technology offered an opportunity to streamline radiology centers, which could provide cost-cutting measures to insurers, employers and the workers’ compensation services sector.

About 90% of individuals who file workers’ compensation claims receive magnetic resonance imaging or other diagnostic imaging services, Karleski says.

Prior to NextImage Medical, Griggs started One Call Medical Inc., a Parsippany, N.J.-based provider of radiology services and which was also aimed at the workers’ compensation market. TA Associates bought One Call Medical for $115 million in 2003, according to Thomson Reuters (publisher of PE Week).

The funding of NextImage Medical marks Chrysalis’ sixth investment this year and its 12th investment overall from its $175 million third fund that it raised in 2006, Karleski says. —Martha Sanchez-Avila