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Fukuoka-based Medmain, the Japanese MedTech startup behind the PidPort telepathology solutions and the Medteria cloud for medical students, announced on Monday that it has secured 1.1 billion yen (about $10 million US) through the Special Purpose Vehicle (SPV) that Hike Ventures has set up for this round. The company has not mentioned the stage of the rounud but it’s believed as a series A round. The latest round follows the 100 million yen funding back in August 2018, and brought the total sum of funding to date up to 1.2 billion yen (about 11.3 million US).

Participating investors in this round are Fukuoka Wajiro Hospital Group, IHW Group from International University of Health and Welfare (IUHW), QTnet, Hike Ventures, Innovations and Future Creation, Deepcore, Dogan Beta as well as unnamed angel investors. Deepcore and Dogan Beta participated in the previous round.

SPVs have advantages for startups, including lowering the time and effort required to raise funds, and some of our readers may recall that Japanese HRTech startup SmartHR used this scheme for their Series B round. Medmain said it adopted the scheme this time to streamline raising a large sum of funding from multiple investors including hospital managements.

The Fukuoka Wajiro Hospital Group has 24 medical institutions and seven medical education institutions in Japan, while the IHW Group from IUHW is made of medical, educational, and welfare groups with about 60 facilities nationwide. With the participation of these groups, the company intends to accelerate product development involving the clinical environment.

Medmain is the first startup born out of Kyushu University’s officially approved club activity for encouraging entrepreneurship. PidPort, one of the startup’s flagship products, leverages deep learning and proprietary computer vision technology to enable quick and accurate pathology diagnosis.

In partnership with the Kyushu University School of Medicine and Kyushu University Hospital, the company has been using supercomputers to conduct high-speed learning for artificial intelligence (AI). Launching the alpha version back in winter in 2018 followed by the official version in February this year, it is conducting joint research with over 50 medical institutions in Japan.

Medical care and computer vision are considered to be a good match. Among many medical applications (e.g., radiological and endoscopic images), the company has chosen pathology as a focus because it believed this area was particularly behind in digitalization. In pathology, a doctor takes tissue samples from a patient’s body and a pathologist uses a microscope to check them. Medmain provides pathologists with an environment so that they can remotely complete this process by checking scanned images. In addition, the more images and learning data are collected, the more precise diagnosis the platform can provide. This may contribute to solving the delay in diagnosis due to the shortage of pathologists.

Because of the restrictions of medical-related laws, PidPort is used only on a research basis at this point in Japan, but it is used for actual medical diagnosis in other countries. In countries and regions where pathologists are scarce, pathologists in Japan have provided consultation and advice to a local doctor based on images of the latter’s patient’s tissue using the platform.

In addition, the spread of the novel coronavirus has restricted the movement people including even pathologists, but the platform allows pathologists to make diagnoses online without traveling multiple hospitals, which becomes a good opportunity to advance digital pathology.

Medmain plans to use the funds to enhance its AI algorithms, investing in image scanning equipment in addition to hiring talents for global business expansion effort. In Japan, the AI-powered diagnostic function is currently limited to research use due to legal restrictions, so the company will highlight the potential of remote pathological diagnosis leveraged by digital scanning and cloud storage functions for domestic sales.