TrueVault secures $2.5M in seed funding round
Newly-launched healthcare app data security firm TrueVault has raised $2.5 million for its seed funding round, TechCrunch reported.
A product of the recent Y Combinator class, the other backers of TrueVault are FundersClub, Paul Buchheit, ScoreBig Founder Joel Milne, a group that includes Andreessen Horowitz, General Catalyst, Maverick, and Khosla Ventures and Immunity Project Founders Reid Rubsamen, Naveen Jain, and Ian Cinnamon. Proceeds from the round will be deployed towards the development of the "database as a service" feature of TrueVault which gives healthcare apps a secure API when putting sensitive patient data to storage, the report said.
The kind of data protection that TrueVault gives is needed by startups in the healthcare space so that they will be able to comply with the patient privacy regulations of the Health Insurance Portability and Accountability Act or HIPAA. TrueVault now has more than 300 clients and earns a fee of $0.01 per API call, the report said.
TechCrunch reported that the company's solution became so successful at the Y Combinator Demo Day they were able fully obtain the $2 million of the total $2.5 million seed fund right then. The $500,000 financing had already been previously pledged. TrueVault Co-Founder Trey Swann said the Handshake Deal Protocol which was suggested by Paul Graham, the Founder of Y Combinator, in March last year was one of the major reasons why they were able to get their seed funding, the report said.
According to a March 14, 2013 TechCrunch report on the matter, the Handshake Deal Protocol is a four-step process which begins with the investor saying the amount he is in for. The second step is the startup confirming the backer's investment by saying "Ok, you're in for (amount). The third step involves the startup sending the investor a message either by text or email which says, "This is to confirm you're in for (amount)." The final step involves the investor replying affirmatively to the startup's email.