Blue Spark Technologies in Westlake, Ohio, has raised $40 million in intellectual property debt to fund the growth of a wireless patch that monitors a patient's body temperature.
Ghost Tree Partners, the alternative asset manager in Irvine, California, led the funding round with support from Aon plc, the London-based insurance company, Blue Spark said in a statement.
Blue Spark will use the funding to scale its sales and marketing activities, and to advance its Bluetooth-enabled wearable patient monitoring devices.
The Westlake startup's TempTraq is a wireless, disposable patch that enables caregivers to remotely monitor patients for fever spikes for up to 72 hours, the company said.
Blue Spark is using its proprietary and patented printed battery technology to develop wearable and flexible electronics.
Hospitals can use the company's TempTraq patch to send a patient's temperature data to his or her electronic health record and to a central nurses' station, providing a secure method of storing patient health care data, Blue Spark said.
Hospitals can use the patches to improve patient care, reduce readmissions and optimize reimbursements.
"TempTraq has been clinically proven to accurately detect fevers much earlier than the current standard of care," said John Gannon, president and CEO of Blue Spark Technologies, in his company's statement.
Ghost Tree manages investments from companies such as Aon to provide alternative funding to small and middle-market borrowers. In Blue Spark's case, this funding took the form of debt that is backed by the company's intellectual property (IP).
Thirty years ago, bankers would not have considered using a company's IP as collateral for a loan, said Jason Jackson, chairman of IBS Investment Bank, in an article he wrote for Forbes magazine.
But as intellectual property plays an increasingly important role in driving innovation and economic growth, today's founders, investors and lenders are considering intangible assets as viable financing collateral, Jackson said.
"We are excited to help IP-rich, technology-driven companies like Blue Spark unlock value so they can further pursue their growth ambitions without diluting their ownership," said Lewis Lee, CEO of IP solutions at Aon, in Blue Spark's statement.
