Medtech Company Founded by UVA Darden Alumni Goes Public, Ramps Expansion Plans
By Dave Hendrick
NEOFECT, the medical technology company co-founded by two University of Virginia Darden School of Business alumni, hit a pair of significant milestones recently, opening a second U.S. office in Richmond, Virginia, and successfully debuting on the KOSDAQ, a stock exchange based in Korea.
The company raised more than $17 million in its 29 November debut on the exchange, funding the company’s plans to continue its expansion in a variety of ways, including increasing manufacturing, software development and marketing efforts around its suite of rehabilitation products.
NEOFECT USA CEO and co-founder Scott Kim (MBA ’11) said the road to an IPO began more than a year ago, as the company’s rapid growth began to make the increasingly large funding rounds it sought challenging.
“Fundraising can be fun, but it’s a lot of work,” said Kim, who founded the company with Hoyoung Ban (MBA ’11). “There’s a ton of preparation and negotiation. By going to the public, we can focus on the business and product itself. Based on the milestones we wanted to achieve, we thought it made the most sense.”
The successful IPO is the latest example of funding success for ventures started by Darden alumni, with a recent report showing fundraising spiking by roughly 83 percent in 2018.
Since launching the RAPAEL Smart Glove — a product originally created to improve stroke rehabilitation — to acclaim in 2014, NEOFECT has added additional products for use in rehabilitation from stroke and traumatic brain injury, as well as solutions that aid people with paralysis in their hands, including the company’s latest, the NeoMano, a robotic glove.
The company works with a number of clinical partners in the U.S., including Stanford Neuroscience Health Center, NewYork–Presbyterian Hospital and NYU Langone Medical Center, and it has a burgeoning direct-to-consumer market in the U.S.
The Darden Network at Work in NEOFECT Expansion
The decision to expand beyond its U.S. home office and the San Francisco Bay Area and make Richmond, Virginia, its second U.S. outpost grew out of connection from the Darden network. Ben Weimer (MBA ’60) read an article about the company’s initial steps in The Darden Report alumni magazine.
Weimer called Kim to learn more about the technology, and invited the CEO to Richmond to discuss the project and its progress.
“Going back a few years to NEOFECT’s early stages, I flew out to Richmond to meet with Ben,” Kim said. “He took me out for lunch and we had a really good conversation. He had done his homework and knew all about how the product worked.”
Weimer helped set up a meeting between NEOFECT and the president of the Sheltering Arms Foundation, the operator of a network of rehabilitation hospitals and outpatient clinics in the Central Virginia region, and Sheltering Arms became one of the company’s early clinical clients.
“Back then, we were a no-name company and were not welcomed by many places, especially in the U.S.,” Kim said. “But after that, everything happened really fast. We were able to secure hospital customers and the rest is history. It was foundational.”
As the connections in the Richmond area deepened and a Sheltering Arms occupational therapist joined the company as a clinical manager, the Virginia state capital became the obvious spot for NEOFECT’s initial expansion, Kim said.
“All of a sudden, we had a pretty good foundation and customer base in Richmond, especially compared to the size of the city,” Kim said, noting that Virginia Commonwealth University was also an early customer.
Now with the company in what Kim termed “the second phase of the growth stage,” NEOFECT is gearing up for a planned June launch of the NeoMano, deepening ties to research partners like Stanford Neuroscience Health Center and ramping up its sales infrastructure.
Kim is also immersing himself in a new level of expectations, corporate compliance and transparency in his role as head of a now publicly traded company.
The 39-year-old CEO said the responsibility of taking care of clients, employees and now shareholders can keep him up at night, but with the company hitting many of the ambitious milestones its founders hoped for and seeing real traction in the marketplace and lives of customers, the personal tradeoffs are more than worthwhile.
The University of Virginia Darden School of Business delivers the world’s best business education experience to prepare entrepreneurial, global and responsible leaders through its MBA, Ph.D., MSBA and Executive Education programs. Darden’s top-ranked faculty is renowned for teaching excellence and advances practical business knowledge through research. Darden was established in 1955 at the University of Virginia, a top public university founded by Thomas Jefferson in 1819 in Charlottesville, Virginia.
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