Physician Web Site Manager Prepares $15M Second Round

Recognizing the difficulty that specialty physicians encounter in trying to remain independent, four doctors founded Salu, a Portland, Ore.-based company that uses the Internet to support independent practices.

The company is now preparing to come to market with a second round that Chief Executive Jim Steeb said could total as much as $15 million. Salu has raised $7 million to date, including $5 million from El Dorado Ventures and Atlas Venture in a first institutional round last June. The balance of the capital raised to date came from angel investors.

“We are in discussions with strategic partners that want us to build a hub in specific specialties,” Steeb said. “They are large industry players, not service providers, and we would like to wrap this up in the second quarter.”

In order to serve its audience, the company has developed Salu.net, a Web-based platform that gives these professionals superior control of the site as compared to portal-oriented sites. In short, the company enables specialty physicians-many with small practices-to create personalized hub sites.

“We laugh at the portal concept because, of the 500,000 practicing doctors, 202,000 practice with just one or two other [doctors],” Steeb said. “And the big aha’ is that specialists can operate in these areas.”

He added that these small practices typically operate on a DOS system – if there is any computer system at all – with scheduling being done in “four black books at the front of the office.” Meanwhile, patients are becoming increasingly loaded with information from the Internet. So, the company seeks to address that issue for doctors by creating a Web site for them where they can post information that is specific to the practice and control the content that is posted on the site.

Steeb has been in venture-backed health-care environs before, having worked with Access Health, which was funded by El Dorado Ventures, prior to joining Salu.

“Jim was a senior executive at Access Health, where we made 30 times our money,” said Tom Peterson, a partner at El Dorado. “When I saw [Salu], I introduced Jim, and he got very excited.”

Launched in 1997, the company initially wrote content and built sites for independent practitioners. However, Salu moved toward specialty practices after gaining several endorsements from professional associations.

“As they started to work in that direction, they noticed how specific these [specialties] were,” Steeb said. “Allergy is, conservatively, an $11 billion market, yet there are only 2,931 allergists in the country. So there is an opportunity to get all those physicians installed on the solution.”

To date, the company has struck agreements with the American College of Allergy, Asthma and Immunology, the American College of Cardiology, the American Academy of Physical Medicine and Rehabiliation, the American Society of Bariatric Physicians and the American Society for Reproductive Medicine.