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XThe Blockchain Revolutionized the Creator Economy. Can It Do the Same for Health Care?
Keerthi Vedantam is a bioscience reporter at dot.LA. She cut her teeth covering everything from cloud computing to 5G in San Francisco and Seattle. Before she covered tech, Keerthi reported on tribal lands and congressional policy in Washington, D.C. Connect with her on Twitter, Clubhouse (@keerthivedantam) or Signal at 408-470-0776.

A two-year-old Beverly Hills company, Apotheka Systems, has been quietly working with the Department of Veteran Affairs in Washington D.C. to develop a more secure system to keep health records.
A breach hit the Department's portal for making health care payments last year, exposing the data of 46,000 patients. The VA system, which serves 19 million veterans, isn't alone in their concern about security.
Large-scale health care systems have been roiled by data thefts, from Anthem's 2015 data hack to the SolarWinds hack in 2020 that left health care companies vulnerable. The online-moving health industry is increasingly looking for a solution, now that their work relies more heavily on secure, interactive networks.
Apotheka Systems thinks the answer to security lies in blockchain - a system that permanently tracks every change to a record. Last week, it was awarded a patent for a blockchain-backed patient data management product. The six-point system integrates everything from patient intake to payment processing on the blockchain, and that data can be accessed with a patient's fingerprint scan rather than an intake form, which is inherently less secure.
There's a growing market of players using blockchain to secure health data, including Irvine-based Guardtime, a blockchain security company that worked with Hungary and Estonia to establish blockchain protocols in their health care systems. Factom, based in Austin, Texas, creates blockchain platforms only health care workers can access.
The Health Care Industry's Opportunity
Blockchain has famously been used to power cryptocurrency transactions, partly because it's such a secure digital system that can properly track transactions. But the uses for blockchain go far beyond banking. The technology has been embraced by the world of art, supply chains and even voting; the U.S. Postal Service filed a patent on blockchain voting technology in 2020.
Health care could be next. The pandemic has pushed the brick-and-mortar heavy industry further online, and digitization has forced it to grapple with issues of privacy, security and accessibility.
Because of the sensitive nature of health records, strict controls are placed on who can access it and how.
Few clinics and hospitals used telehealth services because of these restrictions, but when the pandemic hit, doctors (like many people working remotely) needed to access sensitive data from their homes. The federal government began to encourage remote medicine by making it easier for Medicare patients to receive telehealth services and relaxing restrictions on where providers can practice.
Apotheka's president, Dennis Maliani, said there's been an uptick in demand for blockchain solutions since the pandemic started. While many quickly hospitals quickly adopted technology to accommodate working from home, they also became vulnerable to massive ransomware attacks during an already devastating pandemic.
"Regardless of the technologies they are implementing, they still have challenges in terms of workflows, in terms of privacy, in terms of security," Maliani said.
Why Blockchain?
Experts say the blockchain's security and interoperability capabilities are crucial in a socially distant world.
"The records can never be deleted, meaning you can always find ways to track it and trace it and have the DNA fingerprints on the record from cradle to the grave," said Nick Vyas, a blockchain expert at the USC Marshall School of Business.
There are multiple benefits to using the blockchain in the health care industry, he added. Blockchain is inherently decentralized, with patient records copied in multiple places and uses layers of scrambled code to hide identifying information. Any changes or additions to the data is kept in a consecutive record, which allows for heightened security protocols when any changes are made to the data. Altered or hacked data is easily traceable.
"And those things can really enhance the traceability of the data, legitimacy of the data and provide a much better platform," Vyas said.
Blockchain can prevent high-cost mistakes in the pipeline of patient care. While patients are often operating between clinicians, lab workers, psychiatrists and pharmacists, patient care parties don't need to manually keep track of physical records. Unique codes, sometimes in the form of fingerprints or DNA scans, are assigned to each patient, so patients with the same name don't get confused.
Diagnoses and workflow can move quicker — a doctor can send a patient's records to a lab technician or radiologist, who can add to it and immediately send it back securely.
"We have the ability to connect all the intermediary and touch points," Vyas said. "I think the more cumbersome that is, the more you can make the case [for using the blockchain]."
Apotheka Systems began in 2018 to create blockchain technologies in health care spaces and began rolling out pilot programs at Pacific Stem Cells in Newport Beach and MetroHealth International, which is based in the United Kingdom.
Perhaps most notably, the company is part of an effort led by the Department of Veterans Affairs to identify retired vets who don't have access to patient care by assigning unique IDs for each veteran, so it becomes easier for the department to reach them and make sure they are getting the care they need.
"For minorities, access to care is very hard. And that is the same thing that we're seeing, especially with the VA community who are retired," Maliani said. "Some of them are disabled. Some of them have mental health problems because of PTSD during the war. So it's things of that nature whereby they see there's a need that technologies like ours can really come in and help."
The Blockchain Has Its Gaps, Too
Despite the potential benefits, the health care industry may not see the same explosion in blockchain technology that the creator world did. While NFTs have captured the imagination of moguls like Jack Dorsey and musicians like Kings of Leon, blockchain adoption in health care is more likely to be a slow burn.
Vyas said blockchain in art and finance has been largely embraced because so many players are involved in the process. With potentially millions of individuals using a financial system, for example, it can be difficult to verify transactions. Whereas, U.S. patient data changes hands in a mostly closed and already highly regulated system, Vyas said. That's because much of health care is siloed into insurance, hospital and network providers — rather than a universal health care system of hundreds millions.
Furthermore, the blockchain isn't infallible. The year 2020 saw more than a hundred Bitcoin hacks, and hackers will look for new ways to overcome blockchain-supported security in the future. Regulatory standards around blockchain inside health care still need to be addressed including making the system compliant with a 1996 federal patient protection law known as HIPAA that gives patients the right to access their records.
For years, the U.S. health care system lagged behind many industries when it came to embracing new technology and software, wary that sensitive health records could be breached. To push digitization, the federal government passed the HITECH Act in 2009 that created privacy and security regulations for digital patient records.
"It's a natural evolution that we're going through that just happened to have started 20 years later than other industries," said Chris Bergstrom, president of the tech-focused, disease management company AmalgamRx. "And that evolution is: we start with things on paper and then we digitize and collect them and then we learn how to do that [keep those records] do that on a go forward basis."
And just like the world has gotten used to sending large amounts of money online, the health care industry is similarly warming up to the way new innovations can cure inefficiencies, Vyas said.
"We're getting used to the idea of stretching our boundaries. We're comfortable with playing in this digital innovation space," he said. "The opportunities could be huge."
Keerthi Vedantam is a bioscience reporter at dot.LA. She cut her teeth covering everything from cloud computing to 5G in San Francisco and Seattle. Before she covered tech, Keerthi reported on tribal lands and congressional policy in Washington, D.C. Connect with her on Twitter, Clubhouse (@keerthivedantam) or Signal at 408-470-0776.
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Venture Firm Backstage Capital Cuts Three-Quarters of Staff
Kristin Snyder is an editorial intern for dot.la. She previously interned with Tiger Oak Media and led the arts section for UCLA's Daily Bruin.
Venture firm Backstage Capital laid off nine employees, reducing its staff to just three.
Managing partner and founder Arlan Hamilton announced the layoffs Sunday on her “Your First Million” podcast. General partners Christie Pitts and Brittany Davis, along with Hamilton, are the only remaining employees, TechCrunch reported. The move comes only three months after the Los Angeles-based firm said it would only fund existing portfolio companies.
“It’s not that I feel like there’s any sort of failure on the fund side, on the firm’s side, on Backstage’s side, it’s that this could have been avoided if…the system we work within were different,” Hamilton said during the podcast.
Hamilton founded Backstage in 2015 to highlight underrepresented founders and launched a crowdfunding campaign last year to draw in everyday investors. The company announced its plan to raise $30 million for a new fund, bringing in $1 million from Comcast. Having invested in 200 companies, Backstage announced in March that it would not be making new investments.
Hamilton said Backstage’s situation is a “purgatory kind of position,” with companies saying the fund was either too developed or not developed enough to invest in. However, in an email sent to stakeholders, she said she is “optimistic about the next 18 months.”
The firm still intends to grow its assets under management to over $100 million as Hamilton looks for backing from to the 26 funds she has invested in for backing. Hamilton said the company does not “have dry powder right now,” which points to the firm’s struggle to grow.
The news comes during a wave of layoffs across Los Angeles, with companies like Voyage SMS, Albert and Bird letting go of employees.
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Kristin Snyder is an editorial intern for dot.la. She previously interned with Tiger Oak Media and led the arts section for UCLA's Daily Bruin.
A New Tide of LA Startups Is Tackling the National Childcare Crisis
Keerthi Vedantam is a bioscience reporter at dot.LA. She cut her teeth covering everything from cloud computing to 5G in San Francisco and Seattle. Before she covered tech, Keerthi reported on tribal lands and congressional policy in Washington, D.C. Connect with her on Twitter, Clubhouse (@keerthivedantam) or Signal at 408-470-0776.
The pandemic exacerbated a problem that has been long bubbling in the U.S.: the childcare crisis.
According to a survey of people in science, technology, engineering and mathematics (STEM) careers conducted by the city’s WiSTEM Los Angeles program and shared exclusively with dot.LA, the pandemic exposed a slew of challenges across STEM fields. The survey—which consisted of 181 respondents from L.A.County and was conducted between March 2021 and 2022— involved respondents across medical fields, technical professions and science industries who shared the pandemic’s effects on their professional or education careers.
The survey found 60% of the respondents, primarily women, were balancing increased caretaking roles with work or school responsibilities. And while caretaking responsibilities grew, 49% of respondents said their workload also increased during the pandemic.
“The pandemic threw a wrench into lots of folks' experiences both professionally and academically,” said Kathryne Cooper, a health tech investor who sits on the advisory board of WiSTEM. “So we need to acknowledge that.”
In the L.A. area, an increasing number of childcare startups are aiming to address this massive challenge that is a growing national crisis. The U.S. has long dealt with a crippling childcare infrastructure plagued by low wages and a labor shortage in preschools and daycares, but the COVID-19 crisis made it worse. During the pandemic, women left the workforce due to the lack of childcare and caretaking resources. By 2021, women made up the lowest percentage of the workforce since 1988, according to the National Women’s Law Center. Despite the pandemic forcing everyone indoors, caretaking duties fell disproportionately on women.
“I almost actually left my job because everything that I looked at was either waitlisted or the costs were so astronomical that it probably made sense for me to stay at home rather than pay someone to actually look after my child,” said Jessica Chang, the CEO of childcare startup WeeCare.
Brella's Playa Vista-based childcare center lobby.Photo courtesy of Brella
The Marina del Rey-based WeeCare, one of the startups that helps people open their own childcare facilities, announced it raised $12 million in April (to go along with an additional $5 million in bridge funding raised during the pandemic). The company helps people build daycare centers and works with employers to provide access to WeeCare centers and construct child care benefits programs.
Some of these startups strive to boost the number of daycare centers by helping operators with financial costs, licensing fees and scheduling. Wonderschool, a San Francisco-based child care startup, raised $25 million in January and assisted with hundreds of childcare facilities in L.A.-based Playground, which raised $3 million in seed funding last year per PitchBook. Playground acts as an in-house platform for childcare providers to communicate with staff and parents, track attendance, report student behavior and provide automatic invoicing services.
L.A.-based Brella, which launched in 2019, raised $5 million in seed funding in January to create a tech-enabled daycare scheduling platform that could meet the demand of flexible childcare as parents navigate a hybrid work environment, and recently opened a new location in Hollywood. The startup aims to address the labor shortage among childcare workers by paying its workers roughly $25 an hour and offering mental health benefits and career development opportunities for its educators.
“It's this huge disconnect in our society because these are really important people who are doing arguably one of the most important educational jobs,” said Melanie Wolff, co-founder of childcare startup Brella. “They often don't get benefits. They don't have a lot of job security.”
Venture capital funding has poured into the relatively new childcare sector. A slew of parent-tech companies aimed at finding flexible child care and monitoring children saw $1.4 billion worth of venture investments in 2021, according to PitchBook, largely to meet the demands of parents in a pandemic era who have more flexible work commutes and require more tech-enabled solutions.
“I think a lot of it has to do with what employers expect for workers,” said Darby Saxbe, an associate professor of psychology and family relationships expert at USC. “There's still a lot more stigma for men to build their work around caregiving responsibilities–there's a lot of evidence that men are often discouraged from taking paternity leave, even if it's available.”
WeeCare is one of several startups updating the childcare space with technology and flexibility.
Photo courtesy of WeeCare
Childcare benefits are also becoming a more attractive incentive as workers grapple with unorthodox work schedules in a hybrid setting.
“Employers, because of COVID, were having a hard time retaining and recruiting employees,” said Chang. “And they were actually incentivized to actually find a solution to help the employees.”
WeeCare primarily partners with employers of essential workers, like schools, hospitals and grocery stores, and the benefits programs account for the majority of WeeCare’s revenue.
Childcare works are part of a massive labor shortage in caretaker roles that also include nurses, and health aids for the eldery. These workers, which allow women to maintain careers in STEM and other high-paying industries, are vital, according to Saxbe.
“Women can advance in the workplace,” Saxbe said. “But if there's no support at home and there is no one who is helping take care of kids and elderly people, women can't just advance in a vacuum.”
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Keerthi Vedantam is a bioscience reporter at dot.LA. She cut her teeth covering everything from cloud computing to 5G in San Francisco and Seattle. Before she covered tech, Keerthi reported on tribal lands and congressional policy in Washington, D.C. Connect with her on Twitter, Clubhouse (@keerthivedantam) or Signal at 408-470-0776.
MaC Venture Capital Raises $203M for Its Second Fund
Decerry Donato is dot.LA's Editorial Fellow. Prior to that, she was an editorial intern at the company. Decerry received her bachelor's degree in literary journalism from the University of California, Irvine. She continues to write stories to inform the community about issues or events that take place in the L.A. area. On the weekends, she can be found hiking in the Angeles National forest or sifting through racks at your local thrift store.
While venture capital funding has taken a hit this year, that hasn’t stopped MaC Venture Capital from raising $203 million for its second fund.
The Los Angeles-based, Black-led VC firm said Monday that it had surpassed its initial $200 million goal for the fund, which dot.LA reported in January, over the span of seven months. MaC said it expects to invest the capital in up to 50 mostly seed-stage startups while remaining “sector-agnostic.”
“We love seed-stage companies because that’s where most of the value is created,” MaC managing general partner Marlon Nichols told dot.LA. While the firm has invested in local ventures like NFT gaming platform Artie, space startup Epsilon3 and autonomous sensor company Spartan Radar, Nichols said MaC—whose portfolio companies span from Seattle to Nairobi—would continue to eye ventures across the rest of the country and world.
“Talent is ubiquitous; access to capital is not,” Nichols noted. “What they’re building needs to matter; we’ve got to believe that this group of founders is the best team building in the space, period.”
Launched in 2019, MaC is led by four founding partners: VC veteran Nichols, former Washington, D.C. mayor Adrian Fenty, and former William Morris Endeavor talent agents Charles D. King and Michael Palank. Nichols described the team’s collective background in government, consulting, media, entertainment and talent management as its “superpower.”
In a venture capital industry where few people of color are decision-makers, MaC Venture Capital has looked to wield its influence to provide opportunities for founders of color. The firm says 69% of its portfolio companies were started by BIPOC founders and 36% are led by women, while MaC has also diversified its own ranks by adding female partners Zhenni Liu and Haley Farnsworth.
MaC’s second investment fund nearly doubled the size of the firm’s $110 million first fund, which it closed in March 2021. The new fund’s repeat institutional investors include Goldman Sachs, ICG Advisors, StepStone, the University of Michigan, the George Kaiser Family Foundation and the MacArthur Foundation, while the likes of Illumen Capital and the Teachers’ Retirement System of the State of Illinois also pitched in as new investors.
“It’s a great combination of having affirmation from people who have been with us from the beginning and new people coming in that want to be a part of it,” Fenty told dot.LA.
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Decerry Donato is dot.LA's Editorial Fellow. Prior to that, she was an editorial intern at the company. Decerry received her bachelor's degree in literary journalism from the University of California, Irvine. She continues to write stories to inform the community about issues or events that take place in the L.A. area. On the weekends, she can be found hiking in the Angeles National forest or sifting through racks at your local thrift store.