Healthy.io, maker of a 'medical selfie,' is part of the new generation of Israeli health-tech companies

• Israeli founders are building machine learning tools for the U.S. health-care system. 
• Israel's health-care system has been digitized for two decades, making it easier for founders to access the training data they need to build algorithms. 
• Healthy.io has turned the cellphone into a testing lab and is just one of the fast-growing companies from Tel Aviv that's making inroads in Silicon Valley. 
• The company snared a spot on CNBC's 2020 Disruptor 50 list, released Tuesday.

Israel's health-tech scene is having a bit of a moment. 

Healthy.io is just one of the start-ups headquartered in Tel Aviv and moving into the U.S. health-care market.

The company, which builds technology to make it easier for consumers to take urine analysis tests at home, already has relationships with U.S. health systems, including Geisinger. Their concept provides an alternative to the traditional methods of getting a urine test, which involves an individual taking time out of their day to go to a lab or doctor's office.

With a Healthy.io kit, a patient self-tests at home using the included FDA-approved stick, which can be dipped into a cup of urine. From there a smartphone camera scans the results. Healthy.io claims its computer vision algorithms and calibration method make accurate testing as easy as taking a selfie.

The doctor or health system decides whether the results are uploaded directly to a patient's electronic medical record so the doctor can view them immediately or if patients can have direct access and see the results right away.

Healthy.io looks for signs of early kidney disease and urinary tract infections. In Israel and the U.K they are currently using the technology to detect possible complications in pregnancy. They are currently moving toward launching this in the U.S. 

Co-founder and CEO Yonatan Adiri refers to his company as helping usher in the "era of the medical selfie." That's because of the inspiration behind the business model. Adiri and his co-founders, Roee Salomon and Shachar Mendelowitz, foresaw that smartphone cameras would get a lot more sophisticated, in part so consumers would continue taking selfies. So they started thinking they could leverage that for medical-use cases. 

Healthy.io isn't the first business that's turning a smartphone into a medical device. But the company is further along than most, given its relationships with hospitals and its regulatory clearances, which Adiri credits in part to its Israeli origins. 

Israel's entrepreneurial ecosystem

Adiri said that Israeli entrepreneurs in the space are extremely focused on machine learning technology. Unlike in the U.S., where training data is extremely challenging to access because it's stored in disparate systems, Israeli founders can tap into a wealth of structured data to train their algorithms.

"Our health-care system has been digital for 20 years," said Adiri, who previously worked as a technical advisor to former Israeli president Shimon Peres. "That creates data and structured capabilities."

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Adiri said the country has also benefited from its previous entrepreneurial successes. Its biggest home runs to date include Wix (went public in 2013), Mobileye (sold to Intel in 2017 for $15.3 billion) and Waze (sold to Google for $1 billion). According to Adiri, many of the early teams from these companies are now making their way into health care or are investing in health-tech businesses.

These days, health-tech rapidly has become one of the most attractive markets for entrepreneurs in Israel. Its start-ups, including Healthy.io, Tytocare and K Health, are attracting investment and customers in the U.S., the U.K. and in other major markets. Healthy.io has raised  $95 million since it got its start in 2013, from a mix of Israeli and U.S. investors. This year Healthy.io and K Health both made CNBC's 2020 Disruptor 50 list of the world's most innovative start-ups, released Tuesday. 

It feels like a lot of the best talent in Israel is going into health tech. Israel has a good reputation now for both the start-up mentality and for solving really hard problems.

Dr. Daniel Kraft

investor and board member, Healthy.io

Veteran med-tech investor Dr. Peter Fitzgerald said he now flies out to Israel every month to meet with local founders and offer mentorship. Fitzgerald, a co-founder of the venture firm Triventures, believes that the country is already now "the digital health hub" because of the high-quality talent. "It's the connectivity — because so many people served in the military together — and the concentration of people who are so hardworking in one place," he said. "I've never seen anything like it."

"It feels like a lot of the best talent in Israel is going into health tech," added Dr. Daniel Kraft, a Silicon Valley-based physician-scientist and investor who sits on Healthy.io's board. "Israel has a good reputation now for both the start-up mentality and for solving really hard problems." 

The Covid-19 health-tech boom

Many health-tech businesses, including Healthy.io, are poised to do well in the midst of the Covid-19 pandemic.

By using its technology, consumers don't need to go to the lab or the doctor's office to get the test done in person. All of that risks exposure to the virus. But Adiri said he's not resting on his laurels. Many companies in his space saw skyrocketing growth in the spring, but that is already starting to slow down as patients feel more comfortable seeking care in person. 

"We cannot get complacent," said Adiri. "It all climbed very fast, but I think we'll see some easing off."

For that reason, he advises start-ups to take advantage of this moment but recognize they'll still need to prove that their solutions are a viable alternative to traditional methods. To keep the momentum going, "we're going to have to work 10 times harder," he said.