Prepstep

Prepstep’s smart insole and companion app offer a new experience to recover from gait impairments. 14 million elderly people (age 65+) suffer from gait impairments like sensory gait (caused by lack of feedback on positioning of feet), myopathic gait (caused by hip girdle muscle weakness) and other variations like diplegic gait (Caused by tightness of hip adductors) in the US alone. Gait impairments greatly affect quality of life, personal independence and are a precursor of falls, which are the most common cause of severe injuries in the elderly. The current recovery method involves frequent visits to physical therapists and doing the recommended exercises after being diagnosed either visually or through expensive and hard to set-up equipment. Unlike other smart insoles present in the market, which show the metrics to the user to improve performance, Prepstep smart insoles monitor the gait of patients and, based on comparison with a healthy gait pattern, deliver a physician validated, customized recovery plan through the Prepstep app. The insoles are priced at $1000 per pair, bundled with 6 months of app subscription (app priced at $15/month after that). The recovery experience with Prepstep begins when the patients are first diagnosed with gait impairments and the physical therapist prescribes Prepstep insoles, billing their insurance and the patient (insurance is projected to pay 80%, with a 20% patient copay) (U.S. Centers for Medicare & Medicaid Services, 2020). The patients can then follow the recovery plan through the Prepstep app to recover more efficiently (Hullfish, T. J., & Baxter, J. R., 2020), along with timely consulting the doctor if needed.

Our main focus in the first three years will be to raise seed funding, establish a viable product, and complete the FDA approval process by the end of 2023, in preparation for launch in 2024. We aim to raise $2MM in seed funding in 2021 in addition to applying for a $1.25MM NSF grant for non-dilutive funding. R&D will be kept in-house in order to develop and maintain technological leadership and IP privacy. However, once the production-scale manufacturing stage is reached, we plan to outsource manufacturing and assembly activities. FDA approvals will take us almost 2 years since the PrepStep insoles are a class 1 FDA device while the app falls in class 2 category. Towards the end of 2023, we will begin implementing our sales strategy which is directed towards doctors. We aim to partner with third party marketing agencies focused on medical devices for accomplishing the task of making the doctors aware of the benefits of Prepstep through their sales representatives. Teleflex is the agency that we chose for this purpose. A strategic partnership with them, through sale of equity, will enable our pilot product R&D and facilitate our marketing plan through their connections in the medical wearable industry.In order to build a network of doctors who prescribe Prepstep insoles to the patients, we will also market PrepStep at large medical conferences. This will help us reach our 2024 projections, selling 2000 units and generating $2M in revenue with $300K in net profit. 2024 also marks the year when we aim to raise $4M in series A funding to fuel our scaling plans after 2025. During 2025, as we grow in popularity and invest heavily in our marketing campaigns, we anticipate a projected growth of 5 times and we aim to sell 10K units, thus incurring $5.5M in net profits. This will make the valuation of Prepstep $227M at the end of 2025 (If exit options are to be considered at the end of 2025, ROI will be 70% for the seed investors and 50% for the series A investors).

Our team of 6 co-founders occupying the C-suite roles, has a diverse skill set. CEO, Riley Larson is a Bioengineer, CTO’s Shivam Dehinwal and Jesse Xu are Product design engineer and computer engineers respectively. CMO, Yin Yin, COO, Peter Chou and CFO, Jason Wang are engineers with expertise in Marketing, Operations and Financing respectively. Our team is on a mission to develop data driven technology to create simple systems that help people connect with their bodies and live healthier lives. PrepStep insoles are the first stepping stone. As we scale, we aim to tweak the prepstep insoles to target new segments like athletes and offer value propositions like improving athletic performance as an example. As the company matures, we will bring in Industry experts on the advisory board to help us strive in the Medical wearables industry. Professor Jason Moore (Head of the PennAI artificial intelligence platform) and Professor Jeffery Babin (Associate director of the Engineering Entrepreneurship program at the University of Pennsylvania) will act as our principal advisors while Dr. Anthony Manning (Chief Scientific Officer of Momenta Pharmaceuticals), James Park (current CEO and a co-founder of Fitbit) and Ted Schlein (General partner at Kleiner Perkins) will be the key members of our Board of Directors.

Prepstep’s mission to create data driven, simple healthcare technologies helps its customers live healthier lives while creating growth opportunities for its team members and high returns for its investors. Our technology leadership makes us a desired Merger and acquisition candidate. We plan an M&A exit option at the end of 2025 to provide our investors a high return exit opportunity (ROI in range of 50-70%) while giving ourselves an option to make alliances that help us achieve our scaling goals after 2025. These strategic alliances will help us enter bigger segments and apply our core strength of developing data driven healthcare technologies in domains other than gait impairment recovery.