Having just closed $10 million in funding, Sparrow BioAcoustics is setting its sights on building the world’s biggest databank of cardiological recordings, and helping doctors and patients understand how that can help them.

Last week, the five-year-old St. John’s medtech company announced it had closed a $13 million seed round, led by Killick Capital, Klister Credit and Pelorus Ventures. In an interview, Sparrow CEO Mark Opauszky said the company raised $3 million from these investors a few years ago, and they have invested again, now that the company has cleared several milestones. They have formed the lion’s share of a $10 million investment tranche, with the rest coming from a few family offices.

“It’s hard to celebrate funding,” said Opauszky, who became the company’s CEO in 2021. “It’s the work that’s the important thing. For us, [the funding is] great, but only because it allows us to continue to do the work.”

Continuing to do the work, he added, will involve further developing the company’s unique databank, and working to generate “market acceptance” for the Sparrow BioAcoustic technology.

The company’s main product is a smartphone app called Stethophone. It uses a combination of a device’s microphone and software processing to help medical practitioners and their patients monitor heartbeats with the help of a cellphone. It promises to offer patients a way to self-monitor and document their symptoms in detail, for later analysis by a physician. In June, Sparrow added AI features to identify common rhythmic and structural cardiac anomalies.

Stethophone won Food and Drug Administration approval in 2023 so it could be used by medical professionals in the United States. Sparrow said it was “the first-ever FDA-cleared smartphone stethoscope Software-as-a-Medical-Device.”

Legions of people have used the product, which means Sparrow has built up a databank of recordings of full “cardiac cycles” – a complete heartbeat from the beginning of one beat to the beginning of the next. The company will now build AI models that can detect tiny variations in sound that could indicate dozens of diseases, even at early stages.

"In the last 100 days, normal everyday people successfully made 30,000 medical-grade heart recordings" said Chief Product Officer Nadia Ivanova in a statement. "People use the system with a 96% success rate on their first try."

Added Opauszky: “We now have millions and millions of cardiac cycles . . . pulled from tens of thousands of pathological recordings and hundreds of thousands of recordings from [people without cardiac conditions].  . . . To build that database further and test it for accuracy is a deep endeavor. We have every indication it’s going very well.”

The regulatory aspects of this “deep endeavor” are fascinating, in part because gaining regulatory clearance for AI software that analyses a databank of cardiac recordings is uncharted territory. No one’s done it before, and regulatory approval will be needed in every country where the technology is used. Sparrow will have to establish the biological science, the AI-related science and ensure proper cybersecurity so the database isn’t corrupted.

The other priority for the recent funding is to gain “market acceptance”, said the CEO, because the company must make professionals and patients alike understand how this technology can improve healthcare.

“We have a big job ahead of us to get the public using the software but also gaining institutional acceptance as well,” he said. “You can’t have one without the other.”

The latest Sparrow BioAcoustic funding tranche is notable because it’s extremely rare for startups to close eight-figure funding rounds drawn largely from local funding sources. Killick Capital President Mark Dobbin said in an interview it’s the first time Killick has led such a large round for a tech company, though some of his aerospace investments have been larger.

Killick Capital, which is the family office for the Dobbin family of St. John’s, now has a portfolio of 20 companies, all but three of which are in Atlantic Canada. In the past two years, it has participated in mega-rounds by CoLab Software, Spellbook and Mysa (which was announced on Wednesday) as well as smaller rounds by QuickFacts and Swiftsure Innovations.  

“They’re all special,” he said of the companies in his portfolio. “But we see this one as having an opportunity to make a meaningful difference in the lives of millions of people. It is really democratizing a segment of the healthcare sector. . . . There’s such a significant portion of the world’ s population who are walking around every day with undiagnosed heart conditions and we can help them.”